Sharing services, saving money? Five risks to cost-saving when organizations share services

Elston, Thomas; MacCárthaigh, Muiris

doi:10.1080/09540962.2016.1194081

Cited by 31 publications

(37 citation statements)

References 31 publications

(30 reference statements)

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“…However, systems and processes vary between organizations, and considerable path dependency prevents easy migration from one software platform to another (Dunleavy et al, 2006;Fishenden & Thompson, 2013). Rationalizing this complex ICT provision is costly and a major source of overspend and delay in SSC projects (Elston & MacCarthaigh, 2016). This expenditure might defer and/or outweigh any benefits from sharing indivisibilities among multiple client organizations.…”

Section: Discussionmentioning

confidence: 99%

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The Effect of Shared Service Centers on Administrative Intensity in English Local Government: A Longitudinal Evaluation

Elston

Dixon

2019

Journal of Public Administration Research and Theory

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“Administrative intensity” (AI) describes the proportion of total resources that organizations spend on administrative support functions rather than primary service and production processes. We test whether “sharing” administrative activities between organizations leads to a fall in AI due to economies of scale, as is often supposed, using organizational and financial data from more than 300 English local authorities. We employ multi-wave change score regression analysis to relate changes in AI from 2008 to 2016 to levels of shared services participation, and further test whether reform performance varies by category of local authority, type of administration, or degree of structural complexity. Although we find that some measures of AI fell slightly over this period, this was unrelated to shared service adoption for any category of local authority. Sharing of clerical rather than professional types of administration, and sharing by organizations and within partnerships characterized by lower structural complexity, also failed to improve reform outcomes. Faulty assumptions about the extent of administrative scale diseconomies in English local government partly explain this significant reform underperformance.

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Section: Discussionmentioning

confidence: 99%

“…Faced with declining budgets and rising demand for public services, governments have become particularly sensitive to questions of administrative resourcing in recent years (Boyne & Meier, 2013;Elston & MacCarthaigh, 2016;Boon & Wynen, 2017). Is the public sector over-administered?…”

Section: Introductionmentioning

confidence: 99%

The Effect of Shared Service Centers on Administrative Intensity in English Local Government: A Longitudinal Evaluation

Elston

Dixon

2019

Journal of Public Administration Research and Theory

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“…Inter-municipal cooperation is presented as an alternative to regional consolidation to enhance local service efficiency (Elston and MacCarthaigh 2016). Because the decentralization of local government services -such as road and highway maintenance, fire and social services -is much higher in the US compared to European local governments, the US debate has placed strong emphasis on issues related to service quality and regional equity.…”

Section: Introductionmentioning

confidence: 99%

It Depends on What You Share: The Elusive Cost Savings from Service Sharing

Aldag

Warner

Bel

2019

Journal of Public Administration Research and Theory

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Intermunicipal cooperation is the most prevalent alternative service delivery method for US local governments. While aspirations for budgetary savings are one motivating factor, increased service quality and regional coordination are also important goals. We use an original 2013 survey of local governments in New York State to assess the level of service sharing and outcomes. We match our survey with 20 years (1996–2016) of service-level costs data to explore the relationships between sharing and costs across 12 common local government services. We contribute to the literature by providing the first multivariate assessment of the effect of cooperation on costs in the United States, and we contribute theoretical insights on the objectives and type of cooperation to explain differences in the effects of cooperation on costs across a variety of services. Our multivariate time series regressions find that service sharing leads to cost reductions in solid waste management, roads and highways, police, library, and sewer services; no difference in costs for economic development, ambulance/EMS, fire, water, and youth recreation; and higher costs in elder services, and planning and zoning. These differences are explained by whether services have characteristics such as asset specificity and the ability to achieve economies of scale on the one hand, or if sharing leads to greater administrative intensity or promotes other objectives such as quality and regional coordination outcomes on the other hand. We also analyze the effect of sharing on service costs over time, and find solid waste, roads and highways, police, and library are the only services where costs show a continued downward trend. These results show the limited role for economies of scale, even in asset specific services. Because cost savings are elusive, public sector reformers should be careful not to assume cost savings from sharing. The theoretical foundations for service sharing extend beyond economies of scale and transaction costs. Scholars should give more attention to organizational form and the broader goals of sharing.

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“…Finally, managers have to stop considering resistance as negative «a more complete and balanced view of resistance can provide more flexibility in the field of managing change». In other words, it is possible to use the negative feedback as an opportunity to engage end-users in reform design and implementation (Elston & MacCarthaigh, 2016).…”

Section: Resistance To Organizational Changesmentioning

confidence: 99%

Gestión del cambio: minimizando la resistencia a un proyecto de Centro de Servicios Compartidos en América Latina

Petta

Ferraz

2019

Rev.esc.adm.neg

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Este trabajo presenta la gestión del cambio como la herramienta que permitió minimizar la resistencia de los empleados del área de finanzas de una multinacional a la implementación de un Centro de Servicios Compartidos (CSC) en América Latina. Los líderes y sus respectivos equipos en dieciséis países de la región se encontraban inmersos en el proceso de migración de transacciones financieras a un CSC subcontratado. El desafío fue facilitar la implementación de este proyecto minimizando los riesgos de no alcanzar el éxito y para eso se aplicó el método de Action-Research. Luego de analizar los tipos de resistencia a superar, el equipo desarrolló un plan de gestión del cambio para obtener el apoyo y el compromiso de los líderes, involucrando a los empleados para retener el conocimiento sin afectar los plazos de implementación del proyecto. Tratando de manera transparente, abierta y franca a todos los empleados directamente involucrados, se logró el compromiso individual de la mayoría, lo que contribuyó al éxito del proyecto. Por lo tanto, fue posible para el equipo identificar y tratar adecuadamente muchos riesgos que, de no resolverse adecuadamente, podrían haber retrasado la implementación del proyecto o incluso poner en peligro las actividades en las diferentes unidades de negocios de la multinacional en América Latina. La ejecución trató la resistencia, empoderó a los líderes locales como agentes de cambio, aclaró las dudas de los empleados y aseguró el cierre del proyecto a tiempo, dentro de las condiciones planificadas y sin afectar el negocio.

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Sharing services, saving money? Five risks to cost-saving when organizations share services

Cited by 31 publications

References 31 publications

The Effect of Shared Service Centers on Administrative Intensity in English Local Government: A Longitudinal Evaluation

The Effect of Shared Service Centers on Administrative Intensity in English Local Government: A Longitudinal Evaluation

It Depends on What You Share: The Elusive Cost Savings from Service Sharing

Gestión del cambio: minimizando la resistencia a un proyecto de Centro de Servicios Compartidos en América Latina

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