Shared service relationship in the operational phase – examining benefits, challenges and risk mitigation
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School of Business |
Master's thesis
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Date
2020
Department
Major/Subject
Mcode
Degree programme
Information and Service Management (ISM)
Language
en
Pages
73 + 2
Series
Abstract
Increasing competition push companies to find always new ways to improve the efficiency of their operations. Shared service center (SSC) is an organizational concept which aims at enhanced efficiency, cost reductions and better quality by concentrating support processes under a separate organizational unit. However, achieving these benefits is not simple as shared service arrangements involve a lot of complexity and managing them is not an easy task. The factors for successful SSC implementation have been studied extensively, while the academics have devoted less attention for investigating the successful managing of SSCs after the implementation – in the operational maturity phase. The objective of this study is to gain a deeper understanding of shared services in their operational maturity phase in order to help companies to manage their shared service arrangements better and consequently, enable them to reap the wanted benefits. The research was conducted by examining a single case company, which is a Finnish business unit of a global group of companies. The case company has been moving its activities from different organizational functions to the group’s captive SSC for a few years now and some of the activities have been moved successfully whereas others have proven to be more complicated. The data was collected through nine semi-structured interviews with the case company employees from three different functions. More specifically, the interviewees were 1) team leaders and 2) operative employees who work in a daily collaboration with the company SSC. Thus, this research is focused on the perspective of shared service customers. The empirical data was analyzed using a research framework, which was synthesized from prior academic literature concerning SSC motives, challenges and risk mitigation mechanisms. The results indicate that there are several factors that may have contributed to the case company’s varying success of moving activities to the SSC. These factors include different nature and scope of activities, employee resistance, and poor change management. Moreover, the results suggest that in order to manage employee resistance and engage employees in moving activities to the SSC, the case company should 1) make the value of SSC explicit for operative employees concerning their daily work, 2) involve operative employees in the process of choosing the activities to be moved to the SSC, and 3) move activities gradually instead of moving many activities at once.Description
Thesis advisor
Kuula, MarkkuKeywords
shared service center, shared services, outsourcing, transaction cost economics