Governance of shared service centers in public administration: dilemmas and trade-offs

Governments are seeking ways to improve the service provisioning to their citizens by using the Internet, whilst at the same time reducing the operational costs in their back-office and IT. The implementation of shared service centers is claimed to be a valuable organizational redesign that will lead to less redundancy in operations, less staff and more concentrated knowledge accumulation. However, the decision making and subsequent implementation is a complex task full of risks on failure. This is partly due to migration of legacy IT systems, but diverse expectations and interests among the actors involved appear to be most decisive. Triggered by the failure of P-Direct, a major shared service center for HRM within the Dutch central government, this paper discusses the risks involved and the dilemma's one faces in design and implementation of shared service centers. There are various scenarios one can think of for decision-making and implementation, that lie in the spectrum from central top-down steering to bottom-up emergent process growth. The authors propose a framework for strategic choice that may guide in the search for a successful implementation strategy, and that may help future empirical research in developing "best practices".