The Role of Intermediaries in Multi-Channel Service Delivery Strategies

Abstract

The advent of e-government and the use of the Internet to connect governments to citizens and businesses have resulted into direct contact between government agencies and their customers. This development confirms the prediction of the transaction cost theory, which predicts a more direct interaction and the resulting bypassing of intermediaries. In this article, the authors explore intermediation theory and analyze two case studies which counter the argument of the bypassing of intermediaries. It is possible to adopt a reintermediation strategy in which intermediaries are used as a value-adding service delivery channel. The case studies show that intermediaries can be employed to reduce cost and improve information quality, while at the same time make government more demand-driven by employing channels that are closer to the natural interaction patterns of their customers than direct interaction. For governments, this implies that only adopting a disintermediation strategy, which is often motivated by a desire to reduce transaction costs, is too narrow an approach and needs to be complimented by a reintermediation strategy in order to advance towards a demand-driven government.