Preventing the Gradual Decline of Shared Service Centers

Abstract

Numerous papers have been written extolling the virtues of shared services and providing examples of over the last decades. Cost reduction and quality improvement are amongst the main motives for public-sector organizations to form shared service centers. Process standardization plays a prominent role in strategies to deliver those benefits. This paper reviews previous research on process standardization and shared services to predict how unbalanced process standardization causes shared service centers to transition into less effective adapted service delivery modes. Depending on the levels of service consolidation and external service receivers, this transition is likely to follow one of four distinct trajectories: (1) centralized shared services, (2) outsourced shared services, (3) collaborative shared services, and (4) decentralized shared services. Each of these trajectories negatively impacts on an organization’s ability to achieve its original goals. Hence, shared service centers moving toward these trajectories lose momentum and gradually decline. In this paper, four propositions are developed to prevent this from happening.

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