Motives for establishing shared service centers in public administrations

Shared service centers (SSCs) have gained the interest of politicians and public administrations to improve efficiency. By unbundling and centralizing activities, the basic premise for SSCs seems to be that services provided by one local department can be provided to others with relatively few efforts. The introduction of a SSC is a major decision having a long-term impact on all the participants and is often competing with outsourcing arrangements. As such it is of essential importance to get a better understanding of the motives for introducing SSCs. The motives for introducing a SSC in public administration are presented and discussed in this paper. First, by means of investigating an existing SSC in time, the initial motives for introducing a SSC have been compared with the accomplished benefits after realizing the SSC. The introduction of a SSC was driven by a series of complex, interrelated motives. Second, because SSCs can be regarded as a specific kind of sourcing arrangement, the motives for establishing a SSC have been compared with the motives associated with outsourcing as found in literature. This should help decision-makers in making a tradeoff between SSCs and other sourcing arrangements. (c) 2005 Elsevier Ltd. All rights reserved.