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TopIntroduction And Background
Organizations constantly face challenges to innovate their customer offering, improve the quality of their business processes and operate at lower cost. The current global financial crisis has amplified this need. Managers are looking to ‘Shared Services’ as one means of improving organizational performance (Wagenaar, 2006). While the notion of Shared Services is still under debate, it is broadly referred to as “the concentration of company resources performing like activities, typically spread across the organization, in order to service multiple internal partners at lower cost and with higher service levels, with the common goal of delighting external customers and enhancing corporate value” (Schulman et al., 1999). Shared Services has become increasingly popular within both public and private sector organizations1 (Bergeron, 2003; Borman, 2008; Janssen & Joha, 2006b; Wagenaar, 2006), where it is mostly deployed in large organizations, with a predominant focus on support processes (Ulbrich, 2006). “Since the late-1990s, the fast-spreading shared service concept has increasingly become popular as an organizational change approach, focusing on the theoretical potential for extensive improvements in support processes” (Kagelmann, 2000; Schulman et al., 1999, cited in Ulbrich, 2006, p. 191).
Potential benefits of Shared Services have been extensively discussed in the commercial press e.g., “promote efficiency, value generation, costs savings and improved service for the internal customers of the parent corporation” (Bergeron, 2003). Cecil (2000), reports that 16 of the top 20 Fortune 500 companies have Shared Services Centres. Shared Services success stories such as General Electric (Lacity & Fox, 2008), DEC (Lacity & Fox, 2008), Reuters Asia (Lacity & Fox, 2008; Businessintelligence, 2005), Allianz (Lodestone, n. d), and Queensland Government (Queensland-Government, 2008), are many. Leading research firms such as Gartner provide a range of reports that describe the application of Shared Services in different industries, stating that “Many enterprises are looking to shared services to support efficiency goals and to enhance business integration and agility” (Gartner, 2008, p. 2).
Shared Services is considered most appropriate for support functions, and is widely adopted in Human Resource Management, Finance and Accounting (Cooke, 2006; King, 1998; McIvor et al., 2002; Peters & Silver, 2005; Webster, 2007). More recently Shared Services is being employed for the Information Systems (IS) function, and although not adopted as widely as by other functions, recent reports (Lacity & Fox, 2008; Peters & Silver, 2005) indicate that IS Shared Services is growing at a fast rate.