Improving Government service delivery with private sector intermediaries

Government organizations operate a variety of channels to interact with citizens and businesses. Advances in information and communication technology enabled an online presence and more direct interactions. A focus on efficiency makes organizations encourage the use of electronic channels over traditional channels. Also, intermediaries in the service delivery chain are cut out in favor of direct interactions. This strategy of disintermediation finds its rationale in the transaction costs theory. In this paper we investigate dis- and re-intermediation strategies in the multi-channel management (MCM) structures of government organizations and found that disintermediation is not always the best option. Intermediaries – public or private – can be employed to improve customer-oriented service delivery. A primary focus on direct interaction neglects the potential added value of intermediaries. Both disintermediation and re-intermediation should be part of a conscious MCM service strategy. We present a case in which both dis- and re-intermediation are part of the MCM service strategy. In the case, a major Dutch organization took a radical approach to increase efficiency and improve the quality of its services. The organization redesigned the business network and reconfigured its service channels. We found that the disintermediation of low-performing channels, while re-intermediation in others, can contribute to both increased efficiency and better customer-oriented service delivery.

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