Centralized or decentralized organization

Abstract

Politicians and public managers continue to debate over whether to centralize or to decentralize departments, information systems and services. Shared service centers (SSCs) are gaining importance in public administration as a means to innovate, to reduce costs and to increase service levels. The SSC is a business model in which selected government functions are concentrated into a semi-autonomous business unit. Implementing SSCs is not easy, as it often requires several trade-offs and an effective organization and management structure.The discussions about the decision whether to use SSCs seem to be predominantly focused on efficiency and effectiveness aspects, which are rational arguments. In this research-in-progress ongoing research into the design and governance of SSC is presented. We analyze a case study at a municipality and identify factors contributing to success and failure. Our preliminary findings suggest that designing an effective management structure, establishing an architecture capturing central and decentral elements, setting the right expectations, creating a sense of urgency and ensuring that all stakeholders understand the centralization/decentralization aspects of the SSC are important elements resulting in success.