Types of shared services business models in public administration

Abstract

Shared Services Centers (SSCs) are often viewed as one, homogenous type, of business model in which services are concentrated and provided to more than one user. However, reality is more subtle, as shared services can be organized in different manners. Using the unified business model conceptual framework, three case studies are investigated. The framework was found to be appropriate for analyzing our case studies, but several modifications and additions were made to fit the model to shared services and to the public domain. Using this framework, dedicated SSC business model framework was created. At the heart of this framework are four discriminating dimensions: (1) the governance structure of the SSC, (2) the strategic rationale behind the SSC, (3) the nature of the SSC services and (4) the customer orientation of the SSC. Different variables underlie these four dimensions and these should be taken into account when defining and designing shared services business model. Based on these four dimensions new definition for SSC business model is proposed; a concept that is based on separate and accountable semi-autonomous unit within an (inter)organizational entity that provides pre-defined services to internal and/or external customers, on the basis of agreed conditions and balanced governance structure in order to create value in terms of financial or non-financial benefits. Our research shows that SSCs should not be viewed as single type of business model. We plea for applying the generic business model to specific situations.