Shared services have been increasing in prominence in a range of functional areas in both the private and public sectors. Increasing environmental pressures and shrinking public sector budgets have promoted the use of shared services. The purported benefits of improved efficiency and service provision coupled with cost reductions and enhanced performance has rendered this model attractive to many organisations.
This thesis investigates shared services across three functional areas within a public sector context. Given the increased uptake of this model in practice, this study is highly relevant and timely. Where much of the existing literature focuses on specific functions, this research investigates shared services across a number of functional areas. Using multiple functional areas, this research sought to investigate, identify and understand the key factors that inform the planning, implementation and management of shared services.
A conceptual framework was developed that could be employed to understand how shared services should be implemented and managed. The conceptual framework was developed from the shared services literature and organisational change theory and was used to inform the analysis of the findings. Organisational change theory is particularly relevant to shared services due to the structural reconfiguration and behavioural changes that occur as a result of adopting a shared services arrangement. It is therefore, a significant theory in understanding shared services.
The findings of this study are based upon qualitative data obtained from three shared services case studies in the functional areas of Human Resources (HR), Finance and Accounting (F&A), and Information and Communications Technology (ICT). In employing a multi-functional approach to shared services research, this study makes an important contribution to the knowledge base. The research draws comparisons and distinctions in how each of the functional areas developed the purpose of the shared services, dealt with the processes surrounding implementation and xi management, and considered how the people associated with each functional area - both user and provider - were managed in order to fulfil the overall purpose.
The main findings from this study indicate that there are a number of key factors, regardless of functional areas, that should be considered. Firstly, the involvement and engagement of key stakeholders is paramount at the juncture of initial discussions, early negotiations and strategy development. Involving stakeholders ensures that the expertise of those responsible for developing and operating the new delivery model is captured and acted upon. Furthermore, involving stakeholders creates the buy-in necessary for acceptance and reduced resistance to change. This finding also supports the importance of employing organisational change theory to shared services.
Secondly, standardisation is fundamental when the overall purpose is to generate efficiencies, improve service quality and reduce costs. Standardisation permeates numerous areas such as unbundling core from non-core activities and the subsequent design of new structures – both shared service centres and retained functions. The reticence to fully extend a standard approach impacts the retained function, and this leads to the third finding. Contrary to much of the existing literature that has shown the retained function can adopt a strategic role, this research reveals that departments often continued to provide administrative duties. Therefore, in relation to the retained function, this study contributes important insights into this underrepresented area. Finally, this study confirms that both insourcing and outsourcing are viable delivery methods that can be used in a shared services arrangement, and it also highlights the benefits and challenges associated with the various sourcing arrangements.