Public‐private partnerships, outsourcing or shared service centres?

Abstract

Purpose – Organizations are looking for different ways of sourcing their activities to acquire various benefits. The purpose of this paper is to compare the strategic intents and motives for shared service centres (SSCs), outsourcing and public-private partnerships (PPPs) using three case studies. Design/methodology/approach – The paper is a combination of literature research and case study research. The case studies are analyzed using a framework for classifying the strategic intents. Findings – A large number of interrelated factors are found as drivers for selecting the various sourcing arrangements. It is found that the strategic intents underlying the decision to implement a PPP, SSC or outsourcing arrangements differ from each other. Outsourcing is mainly used to reduce costs for non-core activities or to gain access to expertise otherwise out-of-reach and, while a shared services arrangement is selected when an organization wants to improve service levels and reduce costs at the same time. Finally, PPPs are focused on developing new and innovative services and seem to accomplish most intents at the expense of higher risks. The intents have relatively subtle differences, compared to how significantly the arrangements differ. Research limitations/implications – This research is explorative in nature and revealed a large number of intents. Generalization of findings is not straightforward, as there is no uniform view on what constitutes SSCs and PPPs. This research helps to have insight in the basic differences, but needs to be further generalized by investigating a larger number of case studies. Practical implications – Public organizations are struggling to find the right sourcing arrangements. This research can help decision makers in making a choice between PPPs, SSCs and outsourcing arrangements. Originality/value – The primary value of this study is to understand the differences between the strategic intents underlying the use of these three sourcing arrangements.