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UNDERSTANDING RISKS OF SHARED SERVICE CENTRES 16 APRIL 2012 | THESIS DELFT UNIVERSITY OF TECHNOLOGY, MASTER IT MANAGEMENT AMANDA VRAKKING

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Page 1: Ignorance is Bliss

UNDERSTANDING RISKS OF

SHARED SERVICE CENTRES

16 APRIL 2012 | THESIS

DELFT UNIVERSITY OF TECHNOLOGY, MASTER IT MANAGEMENT

AMANDA VRAKKING

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16 April 2012 Thesis Delft University of Technology Master IT management Amanda Vrakking [email protected] Attendant: dr.ir. M. Janssen Faculty Technology, policy and management Section Information and Communication Technology [email protected]

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Management Summary

Relevance In March 2011 an advisory report was presented to the region of Gooi en Vechtstreek, examining which areas of the municipalities were eligible to take part in a collaboration. The starting point of that advisory report was the reassessment of the cooperation among various municipalities within the region. During the mapping of the potential areas, it became apparent that there was an opportunity to create an SSC for support services. This is expect to bring benefits such as cost reduction, quality and continuity improvement. The development of the SSC has not yet started. However, the town clerks have commissioned a consultancy firm to carry out a feasibility study of establishing an SSC. Potential benefits of the SSC will not be achieved automatically, therefore, understanding and dealing with risks is crucial for achieving these benefits. At this time, there is no insight into what risks appear when setting up an SSC within the region Gooi en Vechtstreek. This research focuses on a structured and systematic way of identifying and analyzing these risks. In order to address the research questions, a review of available literature was used to collect information about SSC’s and risk management. The instrumental risk management approach identifies risks, measures them and suggests way of mitigating them. Lessons learned from the organizational attention approach, takes other factors like stakeholder attention (actors), socio-political goals, and strategic rationale into account. There was no literature about risk management approaches in the area of SSC found in the literature. Purpose An SSC is an interesting option because the municipalities are too small to do everything themselves without risks in the areas of efficiency, quality, continuity and continuity (reducing vulnerability). This, however, comes with significant risk. Although most of the success stories are publicized, both practice and literature shows that benefits are not achieved automatically. In some cases, it takes years to accomplish the desired benefits. The question is, how can an SSC be established and contribute to cost reduction while maintaining quality. Properly identifying and addressing risks, will ensure a greater chance of success. The objective of the report is primarily to provide insight into the risks, with the assumption that analyzing these risks will contribute to managing change within the organizations. By identifying the risks associated with an SSC, and asking the stakeholders to address the probability and impact of these risks, estimations can be made of their importance. This should ultimately contribute to an SSC’s success, thereby improving public service and internal operations and were possible cost reduction and knowledge retention. Design/methodology/approach Government SSC’s differ from commercial SSC’s in that they frequently include strategic goals that go beyond efficiency, quality and continuity (reducing vulnerability). These SSC include political and social objectives (public value) such as trust in government, social inclusion, community regeneration, community well-being, and sustainability. These additional criteria pose an extra challenge in designing a risk management approach that helps to meet these objectives. This thesis develops and evaluates an approach for SSC risk management, which complements existing methods. It is based upon an instrumental risk management approach and the concept of public value. The approach is founded upon a case study in the region of Gooi and Vechtstreek.

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Four different municipalities and one municipality SSC-organization were visited during the case study. There is a large representation of interviewees in the municipality of Hilversum and municipality of Bussum. The BEL-combination is already an SSC, it delivers services for three different municipalities (Blaricum, Eemnes, Laren). In total, there were 17 people interviewed, divided into 5 groups: Mayor and Aldermen, Town clerk, IT-manager, employee and end-user. Findings The straightforward conclusion could be made that there are so many risks that the municipalities should ask themselves if these risks are manageable and worth the benefits. But this would do no justice to the willingness of the municipalities to collaborate. Summarizing the risks, the motivations and observation, the hypothesis can be made that the greatest risk is the difference in objectives between the municipalities and all the individual stakeholders. Almost every single participant is in favor of setting up an SSC. But very little thought has been put into potential risks and if this did occur so the area of public value was completely neglected. This could be due to people following current trends and thought without necessarily understanding the implications of organizational and administrative change. This hypothesis is supported by the most remarkable comment of the most important stakeholder:

“Why are you asking all those questions about risks? In that case we can quit right away!”

Apparently, ignorance is bliss. Recommendations As described the major risk is: no common objectives among the municipalities and stakeholder groups. Recommendation on behalf of this risk that strategic choices are made in a systematic, collaborative and structured way during phase 0, and phase 1 of setting up an SSC. Research all possible motives, as this can help to set the right level of objectives. Mayor and Aldermen are in the lead, they have to decide what the objectives are for setting up an SSC. These objects cannot be determined by work groups, conducting studies or hiring consultants. If the objectives are set they should ensure that the objectives are achieved. Discuss the implications of benefits and losses as a whole for all the organizations. It is also recommended to encourage communication between the stakeholder groups, and especially among the municipalities. Visit the BEL-Combination, interview all individual stakeholders. They have experience within the region Gooi en Vechtstreek. Recommendations on behalf of the other risk are not to overestimate technical abilities. Ensure that all whom are involved have sufficient knowledge. At last do not forget about the public value! Originality/value Shared Services Centres provide a solution for resource sharing among multiple users and are gaining importance in public administration, this is expected to bring benefits such as cost reduction, quality and continuity improvement. There is hardly any research in the field of shared services and risk management and no research investigating influence of stakeholders on the process in local government.

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Index 1 Introduction ..................................................................................................................... 7

1.1 Context .................................................................................................................................... 7 1.2 Gooi en Vechtstreek ................................................................................................................ 7 1.3 Shared Service Centre ............................................................................................................. 8 1.4 Report outline.......................................................................................................................... 9

2 Assignment .................................................................................................................... 10 2.1 The global problem................................................................................................................ 10 2.2 The objective ......................................................................................................................... 10 2.3 Research questions................................................................................................................ 11 2.4 Scope ..................................................................................................................................... 12 2.5 Deliverables ........................................................................................................................... 12 2.6 Research methodology .......................................................................................................... 12

3 Theoretical Background: shared services & risks .............................................................. 14 3.1 Shared Service Centers .......................................................................................................... 14 3.2 Risks management ................................................................................................................ 17 3.3 SSC risks ................................................................................................................................. 19 3.4 Stakeholders identification and analysis ............................................................................... 20 3.5 Conclusions ............................................................................................................................ 22

4 Towards a SSC risk management approach...................................................................... 23 4.1 SSC risk management approach ............................................................................................ 23 4.2 Determine category ............................................................................................................... 24 4.3 Stakeholders analyses ........................................................................................................... 25 4.4 Risk assessment ..................................................................................................................... 27 4.5 Questionnaire ........................................................................................................................ 29 4.6 Interview ................................................................................................................................ 31 4.7 Conclusions ............................................................................................................................ 32

5 Risks of SSC at the Gooi en Vechtstreek .......................................................................... 33 5.1 Approach ............................................................................................................................... 33 5.2 Results ................................................................................................................................... 33 5.3 Recommendations................................................................................................................. 40 5.4 Conclusion ............................................................................................................................. 41

6 Evaluation and revised SSC risk management approach ................................................... 42 6.1 Evaluation .............................................................................................................................. 42 6.2 Revised SSC risk management approach .............................................................................. 43

7 Conclusions & recommendations .................................................................................... 45 7.1 Conclusions ............................................................................................................................ 45 7.2 Recommendations................................................................................................................. 45 7.3 Limitations & further research .............................................................................................. 46 7.4 Reflection............................................................................................................................... 46

References ................................................................................................................................. 48

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1 Introduction

This chapter starts by setting the scene. This is followed by a brief description of the region of Gooi en Vechtstreek and concept of a shared service centre (SSC). The main objective of this graduation thesis is to define and analyse the risks of implementing an SSC in the region, by this meaning, the report ground is briefly explained. This chapter concludes with a reading guide for the remaining chapters. 1.1 Context

In March 2011 an advisory report was presented in the region of Gooi en Vechtstreek, examining which areas of the municipalities were eligible to take part in a conglomerate. The starting point of that advisory report was the reassessment off the cooperation among various municipalities within the region. During the mapping of the potential areas, it became apparent that there was an opportunity for creating an SSC for support services (Hammer, 2011). This is expect to bring benefits like cost reduction, quality and continuity improvement. The efficiency benefits result from advantages like standardization and IT-costs reduction. Quality improvement come from higher expertise through specialization. There is reduced dependency from outside providers, easier access to information, and more flexibility for reorganizations, which contributes the continuity of the services. The discussion about collaboration or combined administration is not new, for example; there was a proposal for reclassification of municipalities to strengthen the administrative power in Bussum and Naarden in 1920. Ultimately, this effort, like all the subsequent attempts, was not adopted (Kortsen, Schoenmaker, Hammer, 2005). The most recent merger proposal is between the municipalities Naarden, Weesp, Muiden and Bussum, and has been under discussion for years. The decision will be taken in The Hague. Failing that, the municipalities themselves will decide on who they collaborate with, and how close any collaboration will be. The outcome will remain uncertain for some time. Prior to this, a feasibly study will take place, examining the possibilities of an SSC in the region. 1.2 Gooi en Vechtstreek The region Gooi en Vechtstreek is located in the southeast of the province Noord-Holland, there are 9 municipalities: Hilversum, Huizen, Bussum, Naarden, Weesp, Muiden, Blaricum Laren and Wijdemeren. Hilversum, with over 85,000 inhabitants, is the largest, while Muiden has the smallest population of around 6,500 inhabitants.

Figure 1.1 Gooi en Vechtstreek

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Core business municipalities Municipalities provide more than 300 products and services to residents and chain partners like Central Government, UWV, fire department and Police. They provide passports, driving licenses, permits and certificates (birth, death, marriage etc). They provide Municipality zoning, give advice on the use of land for construction opportunities, and assess whether plans for (re) building fit within the zoning. They make decisions on the construction of roads, parking lots and bicycle paths and try to protect the environment. The municipalities provide benefits to eligible residents, education, cultural events, and security. To help finance its expenditure it raises municipal taxes, such as property tax and dog tax. The municipality’s areas of responsibility are both large and diverse and require considerable business alignment. Nevertheless, in the end all the municipalities deliver similar products and services. 1.3 Shared Service Centre An SSC is a collaborative strategy in which business functions are concentrated in a semi-autonomous business unit, a management structure designed for efficiency, value, cost reduction and improved service to realize better service for the internal customers of the parent organization in a similar manner as in an open market (Strikwerda, 2011). One crucial difference from a traditional facility department is that the SCC is relatively autonomous, and therefore has its own responsibility for results and the position of services to internal customers. A SSC can be created around the core business processes of the organization as well as the support processes. The Bel-Comibatie is an example of an SSC for municipalities where both core and support processes are carried out by one organisation (BEL-combinatie, 2012). Processes that are often part of an SSC are finance and administration, personnel, purchasing and IT. There have been all sorts of collaboration between municipalities on various task areas in both the territorial management and in the social area for many years. However, these things relate to the core functions of municipalities. There are examples of collaboration in HRM and IT but in other areas it is very rare. This could be seen as a missed opportunity (Vrakking, 2011a). However, this is not the focus of our research. Almost half of the organizations in the public sector indicate that they are actively engaged in the centralization of services in an SSC (Kort, Putter, 2005). The popularity of the SSC arose from the desire to centralize operational services are because of;

Efficiency; Improving efficiency may relate to the various objects or processes in the area of finance, facilities, HRM and IT. The goal is achieving same amount of output with fewer resources. “By bundling the development, maintenance and use of services, the costs can be shared among the municipalities, innovations out of-reach might become feasible, and the money freed can be used to improve service levels without any of the agencies having to give up their autonomy” (Janssen & Joha, 2006, page 103).

Quality; The objective is that the quality of services should improve. Quality improvement come from higher expertise through specialization. There is reduced dependency from outside providers and easier access to information (Mechling, 2006).

Continuity & Vulnerability; The municipalities in the region are quite vulnerable in some areas. Officials are in charge of various tasks, but often have no backups. The objective is to improve continuity and lessen vulnerability by entering into, or arranging, partnerships (Strikwerda, 2011).

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Although most of the success stories are publicized, practice and literature shows that benefits are not automatic achieved. In some cases, it takes years to accomplish the desired benefits (Janssen, Joha, 2007b). To sum things up, an SSC is interesting because the municipalities are too small to do everything themselves without risks in the areas of efficiency, quality, continuity and vulnerability. This, however, comes with high risks. It is not always certain that the estimated benefits will be achieved (Lacity & Fox, 2008). There are many risks in the process that might result in not achieving the desired objectives. The question is what kind of risks will be encountered. The underlying premise is that properly identifying and addressing risks, will ensure a greater chance of achieving the benefits. 1.4 Report outline Chapter 2 describes the research approach. After understanding the basis for the report, the problem definition, objective and research question are outlined. Chapter 3 discusses concepts including SSC’s, risk management approaches, and stakeholders analyse. Thereafter, chapter 4 provides an overview of how the SSC risk management approach is constructed. Chapter 5 describes the outcome, based on desk research and interviews. Thereafter an evaluation of the management approach will be described in chapter 6. The final chapter contains the conclusions and recommendations.

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2 Assignment

The popularity of the SSC arose from the desire to concentrate operational services because of cost and quality considerations. The establishment of an SSC is a strategic decision affecting many parties involved for years (Bergeron, 2006; Janssen & Joha, 2007). Knowledge of processes and systems, from different types of organizations with different cultures are combined into an SSC. Which leads to complex IT governance, different goals, capabilities and IT technology (Janssen & Joha, 2007). The establishment of an SCC comes with many and various risks and should be done with great care. Proper risk analysis will increase the chances of success. 2.1 The global problem Municipalities are changing a lot. The rules and laws from the federal government are becoming increasingly complex and the shift of responsibilities from the national level to the municipalities have serious consequences, as the execution of activities shifts from the central level to the municipal level. The national government wants to provide customer-oriented services at competitive rates and better public services (Vrakking, 2011). The Municipalities are confronted with huge cutback in their budget.1 The global economic crisis led to increased government spending, decreasing revenue and therefore a significantly increased budget deficit in the Netherlands. Government budgets for the coming year have been cut by billions of Euros. According to the Centraal Plan Bureau in the last quarter of 2010 about 27 billion. When translated to the municipalities, this means a reduction of approximately 15% of municipal funds. The need to reduce costs while improving quality is increasingly relevant. This has led to the investigation of the feasibility of an SSC. Whether this is viable and what risks it entails is unclear. The following objective is formulated.

Global problem: “Potential benefits of the SSC will not be achieved automatically. Therefore, understanding and dealing with risks is crucial for achieving these benefits. At this time, there is no insight into what risks appear when setting up an SSC within the region Gooi en Vechtstreek. This research focuses on a structured and systematic way to analyze the risks”.

2.2 The objective The primarily objective of the report is to provide insight into the risks, with the assumption that analysing these risks will contribute to managing change effectively within the organisations and would contribute to success. By identifying the risks associated with a SSC, and asking the stakeholders to address the probability and impact of these risks, estimation can be made of the importance.

1 www.csb.nl/Actualisatie Economische Verkenning 2011-2015 (verwerking Regeerakkoord)

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The main objective is defined as follows.

Practical Objective: “To identify risks and recommendations how to deal with them when setting up an SSC.”

This should ultimately contribute to an SSC, thereby improving public service and internal operations and were possible cost reduction and knowledge retention. Literature shows that there is scant research in the field of risk management and SSC. Hence, the research objective is

Research Objective: “To develop a risk approach for identifying risks when setting up an SSC in public administration.”

2.3 Research questions In order to address the problem and to meet the objective, the following main research question is addressed:

Research question:

"What are the risks of introducing a Shared Service Centre in the region Gooi en Vechtstreek?"

In order to answer the main question, the theoretical background of SSC’s is examined. Thereafter, the scope in which the risks will appear is determined, and categorised. Within this scope, the risks will be identified. Once they are clear, stakeholders will assess the probability and impact of these risks. After this is done, recommendations of risk reduction will be proposed. This research question is broken up into the following sub-questions:

1. What are the characteristics of SSC? This question looks into the characteristics of the creation of an SSC, thereby defining a base for researching the risks. By understanding the nature of SSC potential risks can be identified. 2. Which risks management approaches are relevant identifying risks of an SSC? The second research question will be answered on the basis of literature. This is the basis for the SSC risk management approach, which then will be used for answering question 3. By using risk approaches rather than focusing on individual risks, the assessment method will be robust enough to deal with unforeseen change. 3. What risks could be present when setting up SSCs? Answering this question will provide insight into what the risks are, and supply input for categorisation these risks. This will be done by investigating a case study.

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4a. Which risks are relevant to which stakeholders at Gooi and Vechtstreek? In particular, the risks from various stakeholder perspectives will be looked at. Looking at the different categories, a stakeholder analysis is made, using the theory of stakeholder identification and salience. This is based on the stakeholder’s possession of the following attributes; Power, legitimacy and urgency (Mitchell, Agle, et al., 1997). This will be done by investigating a case study. 4b. What are the specific risks for the SSC in Gooi and Vechtstreek? Interviews with the stakeholders will be used to assess the probability and impact, and thereby the importance of the risks. Stakeholders will reveal if the scope and risk definition is complete. This will be done by investigating a case study.

5. Which recommendations can be given to reduce these risks? The recommendations determined by the process as described above will provide insight into the risks, their impact, and their probability. Understanding this will facilitate development and implementation of the SSC.

2.4 Scope As explained in chapter 1.3 the SSC can be conceived for several proposes, like Finance, Human Resource and Information Technology. This advisory report about SSC risks will focus on the area of Information Technology (IT). Primary the IT departments its products and services are investigated. 2.5 Deliverables The result of this project is an advisory in which the following topics:

• Brief situation analysis; • Description theoretical management approach for analyzing risks; • Risk assessment and stakeholders analyze; • Management approach evaluation; • Conclusions and recommendations.

2.6 Research methodology Setting the scene, will be done in the first chapter. Then, in chapter 2 the problem is identified, the objective is determined and the research question is formulated. Sub questions are explained. Following, theoretical research is done and information is collected on the subject SSC, risks approaches and stakeholders. This is described in chapter 3. The chapter is organized as follows, it provides an introduction to the subject of shared service, defining the characteristics of SSC’s, and the foundation of the SSC risk management approach. This is followed by a short overview of, the risk management concept, and the instrumental and the organizational attention risk management approaches. Thereby justifying the use and means of risk management for SSC’s. At last, stakeholder analysis is explained. This will be used as a starting point to develop a risk management approach in the next chapter. The research questions will be validated and if necessary redefined.

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In chapter 4 a SSC risk management approach will be introduced. The stakeholders will be identified. The purpose of stakeholder analyse is to provide insight into interest and the perceptions of the stakeholder groups by conducting interviews. Deciding who should be involved and what their influence is during the establishment of the SSC is of importance for giving appropriate advice on how to deal with the risks. In this report a participant observation role is used. For getting data for understanding human behavior in this case in the context of the SSC.

Five different municipalities are investigated, which was thought to be sufficient at the beginning of this research given its exploratory character. This case study is used to represent a mix of different municipalities small and medium sized. One which is already an SSC, as these are often viewed as an important reference and might influence the variety of findings. The data is collected, the results are analysed and evaluated and displayed in chapter 5.

Chapter 6 illustrates that after validating the SSC risk management approach in the current situation, an alternative approach was created by reallocating the activities. The original SSC risk approach was based on the assumption that the characteristics of an SSC influence stakeholder analysis. This assumption may not be accurate. Because the different phases of setting up an SSC were not correctly taken in account.

Finally in chapter 7 all the findings are summarized and displayed. This should ultimately contribute to setting up an SSC in the region Gooi en Vechtstreek, thereby improving public service and internal operations and were possible cost reduction and knowledge retention.

Fig. 2.1 Research methodology

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3 Theoretical Background: shared services & risks

The main purpose of the theoretical framework is to answer the sub questions 1 “What are the characteristics of an SSC?” and 2 “Which risks management approaches are relevant for the success of an SSC?”. The chapter is organized as follows. The first section provides an introduction to the subject of shared service, defining the characteristics of SSC’s, and the foundation of the SSC risk management approach. This is followed by a short overview of, the risk management concept, and the instrumental and the organizational attention risk management approaches. Thereby justifying the use and means of risk management for SSC’s. In the last section, stakeholder analysis is explained with the aim drawing up a risk management approach for SSC’s. This will be used as a starting point to develop a management approach in the next chapter. 3.1 Shared Service Centers This section provides an understanding of the characteristics of an SSC, thereby the outline of the first part of the SSC risk model. The similarity in the literature was due to the nature of the subject matter, in both the private and public sectors. A new business concept, called a "Shared Services Center", was developed in the 1980’s. It is not known who first coined the term. However, it is clear that the SSC concept originated in the US and that it was first used in the area of finance and accounting. Over the years, SSC’s have been expanded to many more internal support services, especially in the areas of IT, HR, and procurement (Swartz G., 2007). As Janssen an Joha explain in “Motives for establishing shared service centres on public administration”, there are several reasons for starting collaboration among different governmental organizations. The basic premise for SSCs seems to be that, services provided by one organizational entity can be provided to others with relatively few efforts, in cost en resources. Anyhow, it seems very suitable for public administration because in the end municipalities deliver the same products and services. By bundling the development, maintenance and use of services, the costs are shared. Innovation, sourcing and the status of becoming a more desirable employer become more attainable (Janssen & Joha, 2006; Vrakking, 2011a). In “Improving shared service” Ulbrich (2006) indicates 4 common objectives when working with shared services. Cost reduction, growth of intellectual and capital assets, excellence in customer and process focus and innovation. 3.1.1 Partnerships & collaborations Partnerships and collaborations have existed for many years and have been used by municipalities and Dutch water boards. Diverse programs to bring European cities closer together have existed since WWII. There are currently two forms of collaboration (VNG, 2003):

1. Collaboration between public and private parties; 2. Collaboration between public parties - municipalities, provinces and water boards.

Public Private Collaboration PPS is a long-term partnership between government and business, in which each maintains its own identity and responsibility. Projects are jointly implemented, based common goals and clear responsibility and risks.

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Partnerships & collaborations Throughout the Netherlands there are many municipalities which work together. These are partnerships and collaborations in which mayors or aldermen of the interrelated municipalities constitute the executive committee (form the daily board) that serves but is not part of the participating municipalities. These collaboration exits in many different forms and performs many different tasks. 3.1.2 Characteristics of SSC SSC come in different variations, some have free access to the market, some have restricted access and others have no access at all. Schulz, Hochstein, et al. define 3 SSC-types with 7 criteria, in the paper “Classification of shared service center”. Since, there is no question about that the SSC’s intra-organisational use, the following type and characteristics can be defined based on “a Disguised central department” with these 7 criteria’s; (1) the legal form of an intra-company business unit, (2) mainly hierarchically controlled. (3) Service charged, therefore based on overhead and allocation of cost, in which there is (4) no access to the outside market. (5) There is a contractual obligation. The rationale behind the SSC is that of a (6) cost center. The product portfolio is (7) functional SSC, which means that the SSC covers functions like finance, HR, and in this case IT (Schulz, Hochstein, et el., 2009). In the article “Types of Shared Services Business Models in Public Administration.”, Janssen and Joha explain that SSC is often viewed as one business model. However, SSC can appear in different configurations. They developed “The SSC Business Model Framework”. The framework is based on four dimensions; (1) the governance structure of the SSC, (2) the strategic rationale behind the SSC, (3) the nature of the SSC services and (4) the customer orientation of the SSC, which are mutually related. Each dimension has its own variables which can result in a large variety of archetypes of SSC business models. Based on these four dimensions a new definition for SSC business model is proposed: “a concept that is based on a separate and accountable semi-autonomous unit within an (inter)organizational entity that provides pre-defined services to internal and/or external customers, on the basis of agreed conditions and a balanced governance structure in order to create value in terms of financial or non-financial benefits” (Janssen & Joha, 2011, page 34). The characteristics revealed in the SSC business model are as followed. Governance structure:

- centralized, decentralized or federated; - an intra- or inter-organizational SSC; - parts of the SSC are outsourced or not.

The strategic SSC rationale: - cost or non-cost focus; - initiation because of legal or regulatory requirements or not - creation of new services or redesigning existing services.

The nature of SSC services: - core or non-core; - transactional or non-transactional; - technology or business oriented.

The SSC customer orientation: - customers are employees or citizens; - generic or specific customer or user group; - customers or users are resistant or non-resistant.

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3.1.3 Phases: establishing SSC’s The establishment of an SSC brings its own difficulties. It is inevitable that the business model of the organization will change, as will the context in which all stakeholders work. The implementation of an SSC is an organizational change, and not necessarily an organizational improvement. Changing an organization involves several stages and is not a simple task. Coordinating and understanding the establishment of the SSC is necessary. It can been seen as a change process where every phase of the process related to the next phase. According to Strikwerda, there are 7 phases within the change process (Strikwerda, 2011). Bergeron describes 5 phases for establishing an SSC (Bergeron, 2003). Vereniging Nederlandse Gemeente (VNG) in association with Logica published a guide for setting up and the realization of an SSC, in which they distinguish 5 phases (VNG,2011). The approach proposition for the establishment off the SSC in the region by Beerenschot & KokxDeVoogd extern advisory, uses a 6 phases approach, called the diamond model: Phase 0: Initiation, a feasibility study; Phase 1: Strategic, based on a business case Phase 2: Plan, create a global design and its consequences; Phase 3: Design, detailed preparation for the SSC and planning the realisation; Phase 4: Implementation, the realisation of the SSC; Phase 5: Evaluation. 3.1.4 Similarities with BPR There are similarities between the use of Business Process Reengineering (BPR), which is an organizational change approach, and the use of an SSC. BPR was already very popular in the mid-1990s, and has been adopted by many municipalities. Zaakgerichtwerken is the new buzzword in local government, and it shares many characteristics with BPR (KING, 2011). It focuses on the redesign of the process and its contribution to the citizens or customers. The awareness of this leads to change projects and programs. The programs are also characterized by fundamental, radical, and dramatic changes in the standing organisation. In the paper “Improving shared service” Ulbrich explains that BPR and the establishment of SSC have much in common. Thus, a number of problems that we know from the BPR movement are also likely to appear when implementing shared services (Ulbrich, 2006). 3.1.5 Similarities with (out)Sourcing When the concept in terms of language, laws and tax regulations proved to be viable in the U.S.A., many of these same companies tried to implement SSC’s in Europe. The first shared service organizations in Europe were therefor part of large U.S. multinationals. After the concept was introduced, the practice was adopted by European organizations. The subsequently spread to public organizations as well. Shared service organizations, operating independently in the market, providing services including salary or tax administration, are also referred to as outsourcers. Research shows that sourcing has many similarities with SSC structures. It is there for likely that many of the issues and problems that are to be found in outsourcing models will also be found in SCC’s (Janssen, Sol, & Wagenaar, 2004a). 3.1.6 Conclusion

Implementing shared services has become increasingly popular. Many organizations have already adopted the shared service concept or are looking into optimizing resources and processes in a new

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organizational entity. The SSC has its own characteristics. All the literature claims that the establishment of an SSC, BPR and sourcing requires a phased and customised approach. There are many similarities with BPR and Sourcing.

3.2 Risks management The objective of the report is primarily to identify risks and recommendations how to deal with them when setting up an SSC. With the assumption that analysing these risks contributes to the management of change within the organisations. The popularity of SSC’s seems to originate from a combination of advantages, including efficiency gains and an increase in service levels, without giving up the control of the organizational and technical arrangements and expertise. The perceived expectations of SSCs are often high (Ulbrich, 2003) and often go beyond what can realistically be expected, as it is challenging to realize all of the goals (Janssen & Wagenaar, 2004). Introducing an SSC is a major decision, and is taken at a strategic level. This long-term decision is complex and has major risks (Janssen & Joha, 2006). The purpose of risk management is to identify potential problems before they occur and to mitigate these risks. So that actions can be taken to reduce or eliminate the probability and/or impact of these problems, should they occur. It can be viewed as a continuous process for systematically identifying, analyzing, treating, and monitoring risk throughout the life cycle of a product, service or a program (ISO/IEC 16085:2006).2 3.2.1 Risk management process The general format of a risk management approach is represent schematically in figure 3.1. It shows the difference between the real world and patterns and plans of managerial intervention. Incidents in the real world have a potential cause of loss and thus can make the development of an SSC fail. Risks remain unknown until they occur, and can only then be acted upon. Risks can vary from internal personal shortcomings to external “acts of God” (Keil, Cule, et al., 1998). Risk management approaches also include common sense and learning, based on experiences and interactions incidents and losses.

Figure 3.1 Risk Management Approaches (based on Lyytinen, Mathiassen, et al. (1998))

2 ISO/IEC 16085:2006 - Life cycles process – risk management, IEEE, 2006

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There is a diversity of risk management methods which address similar problems with different methods (Lyytinen, Mathiassen, et al., 1998). All these methods assume an inquiry take place so that risk can be estimated in advance and that measures can be taken to avoid losses. 3.2.2 Instrumental approach to risk management Risk management deals with the identification, assessment, and prioritization and mitigation of risks to reduce the negative outcomes (Wallace, Keil Rau, 2004). Risks are founded in possible incidents of failures that might occur with a certain likelihood. In general, risk management helps to identify, analyze and tackle different kind of risks (Lyytinen, Mathiassen, et al., 1998). Many literature refers to an instrumental approach (Earl, 1996; Keil, Cule, 1998; Smidt, 2001; Croll, 2002). Standards for instrumental risks management approaches are found inter alia NEN, ISO and IEEE.

Figure 3.2 Instrumental approach (based on IEEE Standard 16085-2006)

Measurement supports such processes as describe in figure 3.2. A measurement process for management disciplines is defined in the International Standard 15939:2007. It describes how to define the activities to adequately specify what information is required, how the measures and analysis results are to be applied, and how to determine if the analysis results are valid (Croll, 2001). Focusing on the objectives of risks management and the measurement process the following activities are distinguished for this paper:

1. Management process: defining information requirements in literature; 2. Plan & Implement risks management: this research contributes by constructing a SSC risk

management approach; 3. Manage risk profile: Establish SSC risk management approach and identify the risks: - risks areas of concern; - stakeholder(s) perspective(s); - objectives, assumptions and constraints. 4. Analyses: - Identify the risks; - Estimate risk likelihood and consequences; - Recommendations.

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5. Risk treatment: evaluate risk action, and if necessary take action; 6. Monitoring: For every phase in the process of the establishment of the SCC review and

update risks and perform interviews; 7. Evaluation risks approach: Evaluation management approach, evaluation of a risks

management approach. 3.2.3 Organizational attention approach The instrumental approach is useful and necessary, however, such an approach ignores the more socio-political aspects like infrastructural, environment, human and social capital are important parts of government objectives (Grimsley & Meehan, 2007). A contrasting approach found in the literature is to view risk management as an organizational attention shaping routine. This approach is based on the idea that “risk management approaches fundamentally embody organizational routines of attention shaping which represent causal dependencies between managerial action and observed events” (Grimsley & Meehan, 2007, pag. 234). Taking this approach should help to get a better grip on situations and thereby help to avoid or reduce risks. In the public sector, the dominant approaches for the establishments of SSC focus on measures such as cost reduction, quality improvement and reduction of vulnerability (Strikwerda, 2011). While such functional and economic measures are clearly important, they do not naturally support the realization of the broader socio-economic and sociopolitical goals that characterize so many government projects. There is also a socio-political dimension to risk management within Municipalities (Grimsley, Meehan, 2007). 3.2.4 Conclusion In order to address the research questions, a review of available literature was used to collect information about risk management. The instrumental approach identifies risks, measures them and suggested to mitigate them. Lessons learned from the organizational attention approach, takes other factors like stakeholder attention (actors), socio-political goals, and strategic rational into account. There was no literature about risk management approaches in the area of SSC found in the literature. Focusing on the objectives of this paper, the instrumental risk management approach in will be the base for this research. 3.3 SSC risks A width range approaches are described in literature for identifying risks, but no structured risks management approach is found for the establishment for an SSC. Research on SSCs is mainly about how it should be done, and aims to help organisation with the implementation of an SSC. Common findings are that problems could have been avoided or reduced if there had been an explicit early concern with identifying and resolving risks (Ulbrich, 2006; Strikwerda, 2005; Janssen Joha, 2007; Bergeron, 2003; Janssen Joha, 2006; Lacity, 2008; Buijs, van Doorn, et al., 2004). Bergeron (2003) only devotes one paragraph of his 247 page book on risks management. Naming areas of risks like economical, legal and technical and some commonly known risks in these ranges. Strikwerda also points out that risk assessment is important during the different phases within the process, but displays no structured way of identifying risks. In “Shared Service Center” by Buijs, Doorn and Noordam attention is paid to risks. It contains an outline of a risks matrix and an example

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of a questionnaire, but there is no structured way though the phases of the process. They mention risks in the business case, and in the realisation and implementation phases.

Figure 3.3 Risk matrix and quistionaire based on “Shared Service Center” by Buijs, Doorn and Noordam

3.3.1 Conclusion Literature regarding SSC’s show the same pattern, almost every individual article points out risks. Risks were identified in the areas of: Benefits & losses (mostly financial), resistance, communication, governance, performance, technology and trust. None of them defines an approach for risk management in the establishment of an SSC. In “Shared Service Center” by Buijs, Doorn and Noordam, an example for a risk matrix and a questionnaire is described. 3.4 Stakeholders identification and analysis In SSC setup many stakeholders are involved and the vast amount and diversity of stakeholders contribute to risk. In “Why decisions fail” Paul Nutt (2002) finds that half of proposed projects fail because initiators are unsuccessful in identifying the interests and information held by key stakeholders. Other studies show similar findings, failure in paying attention to stakeholders leads to partly implemented project and poor project results. Paying attention to stakeholders is very important and a stakeholder analysis is an excellent tool to help (public) organizations to better fulfill their purposes (Bryson, 2004). 3.4.1 Theory of stakeholders identification Stakeholders often need to be convinced before they will participate, especially if they do not feel the urgency. Attention to stakeholders is important throughout the process because success is often based on satisfying key stakeholders according to their definition of what is valuable. Understanding the power that stakeholders have to influence change within an organization helps to identify relative risks posed by these stakeholders either as individuals or as groups. Stakeholders with power and influence can easily subvert decisions of importance. In a similar vein, knowing the importance of a particular stakeholder group can help to ensure that the voices of less powerful stakeholders are heard (Clennan, 2011). Typically, stakeholders of high importance but little influence may need special attention to ensure decision-making control (Clennan, 2010).

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The “Theory of Stakeholder Identification” states that, stakeholders possess some combination of three critical attributes: power, legitimacy, and urgency. When in a particular stakeholder group possess one attribute the salience is low, moderate if two attributes are present and high if all three attributes are present. The following definitions should be get in mind using the theory of stakeholders (Agle, Mitchell, et al., 1997):

- Stakeholder: Any group or individual who can affect or is affected by the achievement of the organization's objectives;

- Power: A relationship among social actors in which one social actor, A, can get another social actor, B, to do something that B would not have otherwise done;

- Legitimacy: A generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs definitions;

- Urgency: The degree to which stakeholder claims call for immediate attention. Showing relative positions of stakeholder power, legitimacy and urgency can be of help for risk identification and the more sociopolitical. Figure 3.3 is designed for this this purpose.

Figure 3.3 Example of a stakeholder matrix

It is important to keep in mind that the situation is dynamic and that both stakeholders and their interests might change over time (Clennan, 2010). Especially in long running projects like the establishment of an SSC. As explained in paragraph 1.1 the aim to collaborate or even merge with other municipalities within the region Gooi en Vechtstreek is an ongoing process (started in 1920), and has been plagues by failures (Vrakking, 2011a). 3.4.2 Observation In this report a participant observation role is used. The purpose is getting data for understanding human behavior in the context of the SSC. It is essential to specify these observation when reporting on the research, as this makes it possible to assess the influence of the stakeholder on the research results.3 3.4.3 Conclusion The purpose of stakeholder analyse is to provide insight into interest and the perceptions of the stakeholder groups by conducting interviews and observation. Deciding who should be involved and what their influence is during the establishment of the SSC is of importance for giving appropriate advice on how to deal with the risks.

3 www.colostate.edu – Colorado State University Steps and Methods used in Qualitative Observational Research- 2012

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3.5 Conclusions The main purpose of the chapters is to answer the sub questions 1 “What are the characteristics of an SSC?” and 2 “Which risks management approaches are relevant for the success of an SSC?” . Implementing shared services has become increasingly popular. Many organizations have already adopted the shared service concept or are looking into optimizing resources and processes in a new organizational entity. The SSC has its own characteristics. All of the literature claims that the establishment of an SSC, BPR and sourcing requires a phased and customised approach. There are many similarities with BPR and Sourcing. In order to address the research questions, a review of available literature was used to collect information about risk management. The instrumental approach identifies risks, measures them and defines ways of mitigating them. Lessons learned from the organizational attention approach, takes other factors like stakeholder attention (actors), public value, and strategic rationale into account. No literature was found about risk management approaches in the area of SSC. Focusing on the objectives of this paper, the instrumental risk management approach will be the foundation for this research. The purpose of stakeholder analyse is to provide insight into interest and the perceptions of the stakeholder groups by conducting interviews and observation. Deciding who should be involved and what their influence is during the establishment of the SSC, is of importance when giving appropriate advice on how to deal with the risks.

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4 Towards a SSC risk management approach

The SSC risk management approach was formed by answering the third question: “What risks could be present at the creation of SSC’s?” The approach is used to structure results and draw conclusions. It should be practical, simple and easily applicable. After explaining the SSC risk management approach, the dimensions within the approach are described in this chapter. There are 3 dimensions in the approach: category, stakeholder and assessment. These will be used to develop a questionnaire, which will then be used as the basis of subsequent interviews. The SSC risk questionnaire is complemented by scoring probability and impact, thereby providing the approach with a method of weighing risks once they have been identified. Participants are asked to expand on their scores, in order to provide qualitative results. Observation will also be part of the investigation. This SSC risk management approach will be tested in a case study. The results of which are described in chapter 5. The evaluation of the SSC risk management approach is described in chapter 6. 4.1 SSC risk management approach This section provides theoretical underpinnings and understanding, thereby framing a scope for the initial lay-out of the SSC risk management approach. Thereby focusing on higher-level and not on individual risks. The strength of this approach is that different strategies for addressing each dimension can be used (Cule, Keil, et al., 2011). Risk management approaches are discussed in section 3.2. The relationship between these different models provides insight into risk management. There was no specific SSC risk management approach found in the literature. Hence, the objective of this section is to expand elements of instrumental risks management approach that support more (measurable) outcomes such as those described in paragraph 3.2.2. Consequently, the following activities are distinguished for an SSC risk management approach based on the risk management approach explained by Croll (Croll, 2011). Figure 4.2 illustrates the SSC risk management approach and its activities. The numbers in table correspond with activities within the approach. 1. Defines information requirements in literature. In this case an inquiry that took place looking into the characteristics of an SSC, risk management approaches, theory of stakeholder identification, and defining results. 2. Planning & implementation of risk management. This leads to an SSC risk management approach. 3. Aims to manage risk profile. In this case distinguish category, stakeholder analyses and defining the results, by this means identifying the risks. 4. Risk analyses. In the SSC risk management approach, a case study within the region of Gooi en Vechtstreek, estimates risk probability and impact, request for motivation, observation, and then defining the recommendations. 5. Risk treatment, meaning evaluate risk actions, and if necessary take action. This is not defined in this paper as this is not part of its objective. 6. Monitoring the risk, means that for every phase in the process of the establishment of the SCC, a review 3 & 4 should take place. 7. Evaluation of the risk approach through the assessment of the SSC risk management approach after the case study.

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Figure 4.1 SSC risk management approach

In the next sections the 3 dimensions: category, stakeholder and risk assessment of the SSC risk management approach will be described. 4.2 Determine category Literature on SSC and risk management argue that identifying and analyzing threats to success allows actions to be taken to reduce the chance of failure. Articles have stressed the importance of types of risks associated with SSC’s. Unfortunately, despite these recommendations there are relatively few methods available to help in identifying and categorizing risk factors and to develop effective strategies. The starting point to determine the components in the dimension Category is the SSC business model (Janssen & Joha, 2011) taking into account goals that go beyond efficiency, quality and continuity. As explained in section 3.2.3., SSC in a public administration include political and social objectives (public value) such as trust in government, social inclusion, community regeneration, community well-being, and sustainability (Grimsley & Meehan, 2007). Janssen and Joha’s analyses of the different SSC characteristics, appears to be the most extensive with their 4 dimensions. As it is not yet clear in which capacity the SSC will be established, these dimensions will be used to define a base line for risk. What seem to be missing in the findings of Janssen and Joha (Janssen & Joha, 2011), is the needs of the different stakeholders such as politicians, managers, and employees. Change management, BPR, sourcing and SSC literature describes the importance and influence of the stakeholders. After exploring the risks, one category is added because it appeared lacking, i.e. that of the Stakeholders. For this category the examined literate refers to resistance, participation, loss of knowledge, of all those involved in the establishment of the SSC. In addition, stakeholder focus is added as an extra category. Therefor a categorization is suggested for structuring SSC risk:

1. Governance structure; 2. Strategic rationale; 3. Nature of services; 4. Customer orientation; 5. Stakeholder focus.

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One of the strengths of this approach is that instead of focusing on individual risk factors, it provides a higher-level for thinking about four distinct types of risks and different strategies for addressing each category. 4.3 Stakeholders analyses When identifying the risks to an SSC, the stakeholders should be asked where and in which area these risks are expected, and to assess the impact of these risks. Combining these two factors will show their weight. In order to identify stakeholder groups, brainstorm session took place with a scientific expert in the

field of SSC. This was followed by a peer review with the town clerk of the municipality of Bussum, part of the town clerks group, and one of the initiators of the feasibility study for the SSC. Five different groups were identified; Mayors and Alderman, Directors, IT managers, Employees, and users. The stakeholder groups are placed in a matrix based on Theory of Stakeholder Identification (Mitchell & Bradley, Wood, 1997). The assessment was made using the “Theory of Stakeholder Identification” which states that, stakeholders must possess some combination of three critical attributes: power, legitimacy, and urgency. When a stakeholder group possess one attribute the salience is low, moderate if two attributes are present and high if all three attributes are present. The following definitions should be borne in mind when using the theory of stakeholders (Agle & Mitchell, et al., 1997):

- Stakeholder: Any group or individual who can affect or is affected by the achievement of the organization's objectives;

- Power: A relationship among social actors in which one social actor, A, can get another social actor, B, to do something that B would not have otherwise done;

- Legitimacy: A generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs definitions;

- Urgency: The degree to which stakeholder claims call for immediate attention. 4.3.1 Mayor and Alderman The use of a shared service center between municipalities does not change the responsibility of the mayor and alderman to the citizens of the municipality. There will be no responsibilities transferred nor can mayor or aldermen be relieved of their responsibility by referring to the shared service center. The only thing the municipality does, is source one or multiple tasks on a contract basis by a third party execution, in this case, to an SSC. The municipalities share full control, as opposed to the outsourcing of jobs (garbage disposal example) to a private company (Strikwerda, 2011). Experience shows that application of a successful SSC concept, requires the attention of mayors and alderman. They must set clear administrative conditions and objectives for the SSC (Given, 2008). They are also responsible for the finances and the human capital of the municipality. The expectation is that is the salience of this group high, because Mayor and Aldermen are responsible for finance and human resources, and for the public service. They have power, legitimacy, and presumably urgency, because of cost reduction as explained in paragraph 2.1. 4.3.2 Town clerks

Town clerks are strategic advisors to the mayor and aldermen. They translate the ambitions of politics and governance into quality and executable plans. They are the link between the local

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government, citizens, and the municipal organization. As an SSC affects the whole organization, town clerks have a crucial role in shaping the initial program and preparing decisions by the political leadership. They are responsible for setting and monitoring targets and frameworks (change budget) ensuring the capacity for organizational and financial changes for the SSC (VNG, 2011). The municipalities are confronted with huge cuts in their budget.4 The need to reduce costs while improving quality is increasingly relevant. This has led the town clerks to hire a consultancy firm to look at the feasibility of establishing an SSC. The expectation is that is the salience of this group is moderate, because they possess power as advisors and urgency because of huge cuts in their budget. However, while they are responsible for the daily affairs of the municipality, legitimacy ultimately rests in the hands of the mayor and aldermen. 4.3.3 IT Managers

Integral management is based on result-oriented leadership in the public sector, characterized by motivating employees to contribute to the results of the organization. The manager focuses on output, thereby managing resources and results, and their effects on the municipality. The aim is to delegate tasks, responsibilities and powers to the lowest management level in municipalities. (Buurma, 2007). The town clerks and their management team are responsible for the implementation of the SSC. They are also responsible for decision analysis and reporting in the initiation and strategic phase of the creation process (Strikwerda, 2004). The expectation is that the salience of this group low, because urgency is the only factor for the IT manager in the region. The IT-departments are vulnerable because of continuity, vulnerability, sustainability and flexibility. 4.3.4 End-users

The lack of user involvement during system development is one of the most often cited risk factors in the literature. If the attitudes of users towards a new system are unfavorable, then it is likely that they will not cooperate during a development effort, leading to an increased risk of project failure (Wallacea, Keilb, et al, 2004). The necessary changes of behavior not only concern the SSC itself but also the participating municipalities and the roles they play as owner, client and customer. The expectation is that the salience of this group nonexistent. The findings show that the end-users of the SSC cannot be counted as stakeholders. Their presence within the research was questioned, it is, however, probably worthwhile to know where they see the risks in order to gain their buy in at a later stage. Insufficient user involvement can cause problems when going from the design phase, to the implementation phase (Strikwerda, 2005). 4.3.5 Employees The introduction of SSC’s reflects the transition in the economy and awareness of overcapacity in production facilities. “What's in for me?" This questions should be discussed in relation to the change, and has its basis in the human need to (Strikwerda, 2004):

- Safety: in a physical sense, in economic terms and in a psychological sense; - Appreciation and respect: in particular, receive confirmation of self-esteem; - Justice: to be treated in a fair way, especially when it comes to reward and involvement; - Identity: the need to belong to a group.

4

www.csb.nl/Actualisatie Economische Verkenning 2011-2015 (verwerking Regeerakkoord)

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Team risk refers to issues associated with the project team members that can increase the uncertainty of a project’s outcome, such as team member turnover, staffing buildup, insufficient knowledge among team members, cooperation, motivation, and team communication issues. (Wallacea, Keilb, et al, 2004) The expectation is that is the salience of this group low. As with IT managers urgency is present. Legitimacy could also be applicable to this group, this could be an issue later on in the process. Officials of a municipality are not obliged to move to a SSC (Vrakking, 2011a). 4.3.6 Conclusion The following shareholder groups will be taken in account Mayor and Aldermen, Directors, IT managers, Employees and End-users.

Figure 4.2 Outcome stakeholder analyses

These results will be used to determine how to formulate the observations, and provide input when examining the literature on risk factors.

4.4 Risk assessment The basis for the risk assessment, is the risk matrix, which is explained in “Shared Service Centers” by Buijs, Doorn and Noordam. This matrix has two dimensions: probability and impact. The matrix uses quadrants for acting on the risks as described by the stakeholders. This kind of quantitative research refers to the systematic investigation via statistical, mathematical or computational techniques. Qualitative research, on the other hand, asks broad questions and collects data from participants, it describes the information in themes and patterns exclusive to that set of participants (Given, 2008). This paper combines the approaches. It uses risk factor to asses probability and impact, thereby allowing for the analysis of the results as quantitative data. To understand the rationale behind these scores qualitative data is collected by asking the participants about their motivation. In this way existing knowledge is tested. There are three open questions, the analysis of which will provide new insights. The quantitative data provides a clear picture of the current situation, while the qualitative data is useful to identify causes and to form the basis for the recommendations. 4.4.1 Quantitative results In chapter 5, the research questions “Which risks are relevant to which stakeholders?” and “What are the specific risks for the SSC in Gooi and Vechtstreek?” will be answered. The quantitative data

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will be displayed in three visuals. First, an overall view will illustrate which categories are most important. Second, an overview will reveal which categories are most relevant for which stakeholder. Lastly, the results should been given of all the risk factors on probability and impact, as represented like Fig. 4.6.

Figure 4.6 Quantitative result matrix - SSC risk management approach

4.4.2 Open question

1. How do you feel in general about an SSC? 2. Can you think of any other risks? 3. Do you have anything to say about the subject?

4.4.3 Observation It is essential that those who are considering collaborations or partnerships realize what the context and the outcome of collaboration is. Without this context, a joint venture (irrespective of its closeness) is a sham, and that the individual shared objectives of the partners will not be achieved. In other words, a clear understanding of the organisation and its goals are essential in the process of collaboration (Havermans, &Woudenberg, 2007). The observations are divided into the following items:

- In favor /against The attitude towards an SSC of the interviewees. Are the answers influenced by preconceptions about about an SSC. Are they convinced an SSC is the outcome for all their problems, are they enthusiastic, are they hesitant, or are do they not believe in the concept?

- Experience / no experience Will lesson learned shows another result?

- Important / not important What is the importance for the specific person?

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- Stakeholders view What’s in it for me? Is it an mayor, manager, what is the reasoning behind the motivation. What is it that this e person wants to tell me?

- Organization Do the all of the members of the organization have the same option and view on the subject? Assumptions about of group dynamics, suggest that they influence each other. The observation is not revealed during the interviews, to minimize influence on the participants. As there is little discussion possible, the interviewees should reveal their own views.

4.5 Questionnaire Firstly, the list of risk items is classified. As already mentioned, it is clear that very little research has been done on the subject and there are no insights into an approach, scope or specification of risks for an SSC. Most literature provides general statements about expectations, and commonly known risks found in change processes. The characteristics of an SSC are related to the impact of the risks. In this study, we investigate five interrelated characteristics: (1) the governance structure of the SSC, (2) the strategic rationale behind the SSC, (3) the nature of the SSC’s services, (4) the customer orientation of the SSC, and (5) Stakeholder focus. These were drawn from literature as factors that may affect the establishment of an SSC, although there is little empirical evidence in the literature to support this. A questionnaire is then developed in which the items are deliberately negatively formulated, thereby creating additional awareness of the risks.

Figure 4.4 Questionnaire for SSC risk management approach

The basis for questionnaire is the risks matrix which is explained in “Shared Service Centers” by Buijs, Doorn and Noordam. This matrix has two dimensions: probability and impact. The matrix uses quadrants for acting on the risks identified by the stakeholders. Quantitative research refers to the

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systematic investigation via statistical, mathematical or computational techniques. Qualitative research, on the other hand, asks broad questions and collects data from participants, it describes the information in themes and patterns exclusive to that set of participants (Given, 2008). Therefore, participants are asked to motivate their scores, thereby providing qualitative results. Observation will also be part of the investigation. The following requirements are used at to define risk factors that fit the purpose of the questionnaire:

1. Factors, based on relevant categories (section 4.2); 2. Factors, based on the stakeholder analyses (section 4.3); 3. Possibility of measuring the results, so they can be analyzed and monitored (section 4.4); 4. The ability to investigate the rationale behind the results, for intervention and resolution

(section 4.4); 5. The ability to be used in within different stakeholder groups, in different phases different

stakeholders can see different risks, this can be fed back into the risk management process.

The risks factors found for the questionnaire within the categories will be discussed next. 4.5.1 SSC governance

The implementation of an SSC is not just an efficiency and quality improvement, but a fundamental change in internal governance. The risks and uncertainties surrounding the organizational environment are identified as areas of risk. Factors such as organizational politics, the knowledge of the SSC environment, and failure to adapt the system of internal governance to working with SSC’s have shown to be problematic. (Strikwerda, 2008; Vrakking, 2011; Rau, 2004; Strikwerda, 2005; Observation, 2012; Janssen, expert view, 2012)

4.5.2 Strategic SSC rationale

The strategic SSC rationale adds another dimension to the risks of the establishment of an SSC. Poor strategic rationale often leads to unrealistic expectations like overestimated reduction in cost, and quality improvement on service. Lack of strategic rationale often results in conflicts of interest, unexpected costs, unrealistic schedules and overall disappointment, often based on prejudiced views and/or incorrect advice.(Ulbrich, 2006; Strikwerda, 2005; Janssen, Joha, 2007; Bergeron, 2003; Janssen, Joha, 2006; Lacity, 2008; Buijs, van Doorn, Noordam, 2004) 4.5.3 Nature of Service

Another dimension of SSC risks is the inherent complexity of IT environments, in terms of the difficulty of reorganizing products and services. There are several aspects that can indicate the level of complexity, use of new technology is, knowledge of processes and procedures, legacy systems, and the state of contract management present within municipalities. (Vrakking, 2011a; Goh, Prakash, Yeo, 2007; Ulbrich, 2006; Bergeron, 2003; Lacity, 2008; Buijs, van Doorn, Noordam, 2004) Recent research at the municipality of Bussum shows that there are risks in the area of IT architecture, processes and legacy systems. These problems are common within the region, and discussed on a regular basis with other municipal IT managers. The literature on SSC did not contain much information about the use of technology. Ulbrich and Strikwerda even claim that technological risks should not be a basic principle of the establishment of an SSC. However, looking at the situation that the municipality is in, this hardly seems realistic. It is of course possible to ignore technological issues when establishing an SSC, but in practical terms the

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costs, evolving requirements and technical possibilities, will define what an SSC can do, where it does it, and for whom, and these variables will have a significant impact on risks. Within the current climate of public expenditure cuts a realistic picture should be created. 4.5.4 Customer orientation

Resistance is often cited in the literature as a risk factor. If the attitudes of customers towards the new organization is unfavorable, then it is likely that they will not cooperate during the implementation, leading to an increased risk of failure. Resistance is often based on opinions about the validity of the decision to create an SSC, or not trusting the capabilities and quality of services of SSC in general. (Vrakking, 2011a; Goh, Prakash, Yeo, 2007; Ulbrich, 2006; Bergeron, 2003; Buijs, van Doorn, Noordam, 2004; Lacity, 2008; Strikwerda, 2008; Janssen, Joha, 2007; Janssen Joha, 2006) 4.5.5 Stakeholder Focus Stakeholder risks refer to issues associated with the stakeholders that can increase the uncertainty of the outcome, such as: insufficient knowledge among team members, cooperation, motivation, and team communication issues. As with the customers, opinions about the validity of the decision to create an SSC, or not trusting the capabilities and quality of services of SSC in general. Stakeholders may all have different requirements and expectations in respect to the SSC. (Ulbrich, 2006; Bergeron, 2003; Lacity, 2008; Strikwerda, 2008; Strikwerda, 2004; Janssen, Joha, 2007) 4.5.6 Conclusion There were 64 risks factors (see appendix 3), these risks are clustered by category: Governance structure, Motivation (strategic rational), Nature of services, Customer orientation and Stakeholder focus. In the end 46 distinct risks were found and categorised. Some risks were mentioned in different literature like conflicts in interests, complexity of IT environments or resistance of stakeholders. One risk is pointed out six times, and that is: “Expected cost reduction are not achieved”. Al of the above will be taken in account when creating the questionnaire. In appendix 2 de complete questionnaire is revealed. 4.6 Interview When identifying the risks to an SSC, the stakeholders should be asked where and in which area these risks are expected, and to assess the impact of these risks. Combining these two factors will show their importance. Four different municipalities and one municipality SSC-organisation were visited during the case study. There is a large representation of interviewees in the municipality of Hilversum and municipality of Bussum. The BEL-combination is already an SSC, it delivers services for three different municipalities (Blaricum, Eemnes, Laren). In total, there are 17 people were interviewed, these were divided into 5 groups: Mayor and Aldermen, Town clerks, IT-managers, employees and end-users. In the interviews a combination is made per item on probability and impact for quantitative analysis. To understand the rationale behind these scores qualitative data is collected by asking the interviewees about the motivation behind their answers. In this way current knowledge and assumptions are tested. There are three open questions and observation, thereby new knowledge is collected. The quantitative data provide a clear picture of the current situation, while the qualitative data is useful to identify causes and the base for the recommendations.

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4.7 Conclusions The purpose of this chapter is to answer the question: “What risks could be present at the creation of SSC’s?” The SSC risk management approach is used to structure these results and draw conclusions.

Figure 4.4 SSC risk management approach region Gooi en Vechtstreeks

Consequently, the following activities were distinguished for this SSC risk management approach. An inquiry took place to reveal the risk factors for the current situation. It is divided in 2 dimensions. First, the components of the dimension category are defined. These are based on the SSC business model (Janssen & Joha, 2011) taking into account goals that go beyond efficiency, quality and continuity. SSC in a public administration include political and social objectives (public value) such as trust in government, social inclusion, community regeneration, community well-being, and sustainability. (Grimsley & Meehan, 2007). Secondly, in the stakeholder dimension a stakeholder analysis took place to determine which stakeholder groups should be present in the case study and what their influence is in defining the risk factors. It also provides input for shaping the results, like open questions and observation results. The inquiry is followed by the assessment dimension provided in a classification of the risk factor. It combines three methods, as the risk matrix explained in section 4.4.1 for quantitative data. To understand the rationale behind these scores, qualitative data is collected by asking the participants about their motivation and also three open questions. In this way existing knowledge is tested, which will provide new insights. Observation is used for getting data for understanding human behavior in this case in the context of the SSC. Assessment results will provide the ability to intervene and come up with a solution for the risks that are present at the creation of SSC and relevant to the stakeholder groups.

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5 Risks of SSC at the Gooi en Vechtstreek

Understanding SSC risk can help in reducing the incidence of failure. An SSC risk management approach was conceptualized, building on prior risks management approaches,. A questionnaire was designed and 17 stakeholders were surveyed in a case study. A cluster analysis was then performed to identify aspects of the risks and to define which risks were relevant for which stakeholder group. The objective of this chapter is to analyse the outcome of the case study, thereby identifying those risks which are of importance for the stakeholders in the region Gooi en Vechtstreek. Thereby, answering the research questions “Which risks are relevant to which stakeholders?” and “What are the specific risks for the SSC in Gooi and Vechtstreek?”. 5.1 Approach Four different municipalities and one municipality SSC-organization were visited during the case study. There is a large representation of interviewees in the municipality of Hilversum and municipality of Bussum. The BEL-combination is already an SSC, it delivers services for three different municipalities (Blaricum, Eemnes, Laren). In total, there were 17 people interviewed, divided into 5 groups: Mayor and Aldermen, Town clerk, IT-manager, employee and end-user (see appendix 1). A submitted questionnaire offers quantitative and qualitative data, a score per risk factor and the motivation (see appendix 2). There are three open questions and observation is also part of the investigation. This way existing knowledge is tested and new knowledge is collected. The quantitative data provide a clear picture of the current situation, while the qualitative data is useful to identify causes and the base for the recommendations. How the questionnaire is constructed is described in chapter 4. 5.2 Results The paper explores the risks setting up an SSC within a public administration. While, on the one side, the municipalities express their willingness and capacity to forge long-term relationships, on the other, the pressure on municipalities to combine activities and joint decision making led them to be exposed to great financial risks, which can lead to stagnation in the process and goal displacement. Everything seems to be a risk, analyzing the quantitative data, as shown in Fig. 5.1. Two very interesting results emerged from the case study. In terms of identifying and rating risk factors, the participants viewed almost every factor as important. Interestingly, risks that were viewed to be most present were often those seen as being possible to control, despite the fact that the quantitative data reveals high scored risk factors. Looking at the qualitative data, the overall conclusion is that within phase 0: Initiation, a feasibility study; financial risks are is the most prevalent risk among all the participants. Motivation and observation shows, that the hypothesis can be made that the greatest risk is the difference in objectives among the municipalities and all the individual stakeholders. Looking at the motivation and scores, it can be concluded that it is a challenge to identify specific risks. If asked about their motivation as to what kind of risk they though would occur, it was very difficult to get a concrete answer. Only some of the participants could support their answers with facts. They could not name the possible problems or risks that were likely to occur, although some participants from the BEL-combination were able to do this. If a risk was scored high on probability

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or/and impact, people immediately started giving the risk solution or trivializing the risk. Notable is that almost every participant believed the establishment of the SSC should be undertaken, despite it being seen as risky. Is this wishful thinking? Is ignorance bliss? In the next sub sections, quantitative data, qualitative data and observation will be displayed per category, stakeholder group, and risk factor. 5.2.1 Category

Looking at quantitative data summarized by category the conclusion can be made that it is very hard to identify specific risks, it appears that everything is a risk. Most risks are in the category of SSC Governance, 3 out of 5 on probability, 2 out of 5 on impact and 3 out of on probability * impact (see Fig. 5.3, Fig. 5.4 & Fig. 5.5). There after the strategic rationale contains the highest scored risks. The explanation could be that at this moment the establishment of the SSC is in phase 0: Initiation, a feasibility study, worries about governance & strategic rationale are current and real, while nature of service, customer orientation and stakeholder focus are of more importance later.

Figure 5.1 SSC risk matrix per category

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The categories Nature of services, Customer orientation, and Stakeholder focus score significantly

lower, but still appear in the "Action" range of the risk matrix (see Figure 5.1). More detailed information about the risk factors within the specific category is outlined in section 5.2.3. 5.2.2 Stakeholder group As shown in Fig. 5.2, all of the stakeholder groups identify the category governance as most important, followed by the strategic rationale category(except for employee). Nature of service, customer orientation and stakeholder focus are clearly less important. This corresponds with the outcome in section 5.2.1.

Figure 5.2 SSC risks categories per stakeholder group

Observation and motivation of the participants are consistent with this assumption. Some examples: In the category Governance: “IT depreciation and IT investments are not synchronized within the different organizations”

“This is a major financial risk and is one of the biggest difficulties. Experience shows that this often leads to end of the collaboration process.”

“This is the main risk when it comes to collaborations and in this case, setting up an SSC. We already know this as a fact, this is the greatest challenge that we face.” In the category Customer orientation: “Expectations and objectives are not achieved”

“Not really a risk, is all about meeting the right expectations.” “Is all about meeting the right expectations. Clarity about cost reduction and quality

improvement, will do the job. ”

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As explanted in section 5.2.1. it could be that at this moment the establishment of the SSC is in phase 0: Initiation, a feasibility study, worries about governance & strategic rationale are current and real, while nature of service, customer orientation and stakeholder focus are of more importance later. Looking into the motivation and observations al participants in the stakeholder groups: Mayor & Aldermen, Town clerk and Manager refer to collaborations that have failed. Mostly, because of financial disagreements or not enough support when the decision is submitted in the town council because of financial disagreements or fear about giving up autonomy. 5.2.3 Risk factors Looking at the results on risk factors, there is a small shift, then when the matrix is organized per category. But still there are only 2 questions were no action should be taken.

Figure 5.3 SSC risk matrix per category per question

The score on question 12 is remarkable “The aim of cost reducing is not achieved”, it only appears in the top 5 of impact. In literature this is the most significant and most indicated risks (see appendix 3), but in the end it looks like the participants try to ignore this. As example, the impact for the question is high for Mayor & Aldermen and town Clerks average 4.75, yet they think the probability is low, average 1.75. On the other hand looking at the motivation and observations, financial risks is most often sighted, as already explained in section 5.2.1.

“It is a high political risk if the cost reduction is not achieved. But we are very likely to achieve

this, since we would not participate if the intention is not to cut expenses.” “Standardization is a must, so the probability of not achieving cuts is low.”

This seems like wishful thinking. There were no proper explanations given based on facts.

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It is also notable that, technology appears to be a risk. The BEL-combination, for example, refers to considerable disruption of service and stakeholder frustration during the implementation process. The result of the case study underpins these statements. However, technologies difficulties are neglected in SSC literature.

In the category Nature of service: “Delay or interruption of the deliverables and services occur”

“Transition of services was disastrous. There were many interruption in services throughout

the whole transition phase. But it is also easier to react in an SSC, than in the isolated situation of a small municipality.”

“The problem was expectation management, the managers denied that there were major

problems.” Next follows the top 5 risk factors for: probability, impact and probability * impact.

Fig. 5.4 Top 5 Probability

Fig. 5.5 Top 5 Impact

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Fig. 5.6 Top 5 Probability * impact

There were 4 significant risks that where named throughout the motivations:

- financial risks; these were mentioned in all the interviews and came up in all of the categories, (even once 10 times within 1 interview). It is interesting that there is no relation between the specific risk factor and bringing up the financial risk. It popped up everywhere.

- not meeting the objectives; - slowdown or termination of the establishment process of the SSC; mentioned by almost

every participant one or twice, often in combination with the financial risk. As with the financial risk there is no consistency between risk factors and this risk;

- temporary decline in the level of service. Only the interviewees from the BEL-combination could support their motivation with facts. It is worth mentioning that they are the ones who addressed that financial benefits should not be the objective nor the goal for an SSC in a public administration. Quality improvement and continuity should be the main objective. They claim that if the objective for setting up the BEL-combination SSC should have been cost reduction, it would probably have failed. The accuracy of this claim was not looked into. 5.2.4 Open questions

1. How do you feel about an SSC in general? Although almost everyone was in favor, there were many do’s and don’ts. But in the end, except for one, all interviewees are in favor of setting up an SSC. Employees of one municipality wonder if this is the right time for the establishment of the SSC because of the major cutbacks in government finances that are currently taking place.

2. Can you think of any other risks? Some people referred to the tension between cost reduction which is likely to come with standardization, versus customization. Apart from this, nobody could point out any risk that had not already been mentioned.

3. Do you have anything to say about the subject? Some remarks:

“Think of the structural cost, start with calculating the cost of the very expensive (data)lines between al the organizations. These are high and unforeseen structural costs, and these will be forgotten!”

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“How many years do you think setting up an SSC will take? There are numerous examples off

SSCs that have failed.” “Trust each other. That is the basis for cooperation.” “The different interests of the stakeholders have to be revealed. Strategies of the municipalities

should give insight into the objectives. If not these are not shared, the process will terminate along the way.”

“What to do with the remaining overhead within the municipalities? This is a difficult task and

many collaborations failed on this subject.” “The most important thing is expectation management.”

Very little though has been put into the risks that could be present in the area of public value. This is another outcome than expected. Overall, public administration in not only about functional and finance measurements, although they are clearly important. They do not support the socio-economic and sociopolitical goals that characterize local government. There is also a socio-political dimension to risk management within municipalities (Grimsley, Meehan, 2007). Yet the most sighted risks are in the area of functional and financial risks. This could be due to people following current trends and thought without necessarily understanding the implications of organizational and administrative change. 5.2.5 Observations Observations are not shared during the interviews, to minimize influence on the participant. Discussion is kept to a minimum, so the interviews divulge their own views. Combined with the previous findings, notes for the researcher were added to the questionnaire.

1. As already mentioned in the previous section, most interviewees are in favor of an SSC. 2. More than half the people asked if their answer were similar to those of others. And if the

answers were correct; 3. People from the same organization are likely to have the same attitudes towards an SSC; 4. People from the same organizations are likely to have the same attitude and view towards

other organizations; 5. People of the different organization are likely to have the same view about the attitude

about a specific other organization. For example, all the contestants who mentioned one specific municipality, think that it does not want an SSC, the attitude of that specific municipality is apparently that they are better organized than the other municipalities. All these contestants think that is very naïf. This is an assumption, the case study does not supports these thoughts.

6. There are no shared objectives among the municipalities nor among the specific representatives within a stakeholder group. In short, everybody wants something else. Some want quality improvement, others want cost reduction, some want to insource the IT services themselves, other want outsourcing, and so on.

5.2.6 Conclusions Answering the research question “Which risks are relevant to which stakeholders?” is not possible. All of the stakeholder groups identify the category governance as most important, followed by the strategic rationale category(except for employee).

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When answering the research question “What are the specific risks for the SSC in Gooi and Vechtstreek?” a straightforward conclusion could be made that there are so many risks the municipalities should ask themselves if these risks are manageable and worth the benefits. But this would do no justice to the willingness of the municipalities to collaborate. Summarizing, these are the most significant risks:

- Observation and qualitative date reveal that there are no shared objectives among the municipalities nor among the specific representatives within a stakeholder group;

- Quantitative and qualitative data shows there are high financial risks expected; - Quantitative and qualitative data indicates the objectives are not to be met; - Many times there is referred to a slowdown or termination of the establishment process of

the SSC; - Qualitative data reveal that technical abilities should not be overestimated; - Temporary decline in the level of service is expected; - Quantitative data indicates a lack of knowledge.

Analyzing these risks, the motivations and observation, the hypothesis can be made that the greatest risk is the difference in objectives among the municipalities and all the individual stakeholders. Most of the other risks are a result of these differences. For example, municipality A wants to diminish vulnerability while the objective of municipality B is to reduce cost. This brings financials risk for both if municipality B is not willing to contribute to the objective of vulnerability. This would mean that municipality A has a cost overrun or municipality B does not meet the objective of reducing costs. Also, there is a high probability the objects will not be met. Discussion about this can slow down or even end the process of setting up the SSC, as could also happened when the town council has to decide. In the end if all other events mentioned before do not occur, there can be a decline in the level of service, firstly because the quality is not as expected or secondly because of cost overrun. Technical abilities should not be overestimated. Everything is possible but the question is, at what price. The case study shows this is seen as a high risk. The findings of the BEL-combination confirm this. Very little though has been put into the risks that could be present in the area of public value. Obtainable financial benefits, not sharing the same objectives and the point of departure “what’s in it for me”, appears to be a bad combination, maybe even a fatal cocktail. 5.3 Recommendations As described in the previous section the major risk is: no common objectives among the municipalities and stakeholder groups. Just one participant pointed out this risk in a motivation. This is not a risk which is specified as risk factor. Recommendation on behalf of this risk:

- Strategic choices are made in a systematic, collaborative and structured way during phase 0, and phase 1 of setting up an SSC. Research has shown that in practice the level of trust, cooperation and satisfaction increased between collaborating if this occurred (Janssen & Joha, 2011);

- Research all possible motives, as this can help to set the right level of objectives (Janssen & Joha, 2006);

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- Mayor and Aldermen have to decide what the objectives are for setting up an SSC. These objects cannot be determined by work groups, conducting studies or hiring consultants. If the objectives are set they should ensure that the objectives are achieved (Strikwerda, 2005);

- Discuss the implications of benefits and losses as a whole for all the organizations. Motivation and observation show that there are big difference in expectations. Also that many forms of collaboration in the region failed because of disagreement on benefits and losses;

- Looking at the observations, it is also recommended to encourage communication between the stakeholder groups, and especially among the municipalities. Because, as this research shows, if people meet on a regular basis they get the same attitude and view towards an SSC;

- Visit the BEL-Combination, interview all individual stakeholders. They have experience within the region Gooi en Vechtstreek. Don’t forget the employees, as they were the ones with clear vision and knowledge about the subject.

Recommendations on behalf of the other risk are:

- Technical abilities should not be overestimated. Therefor try to foresee in all the extra costs, as mentioned before and visit the BEL-combination. Do not only speak to the board and top management, but also interview the ones who did the job as well;

- Ensure that all whom are involved have sufficient knowledge; - Do not forget about the public value!

5.4 Conclusion A straightforward conclusion could be made that there are so many risks the municipalities should ask themselves if these risks are manageable and worth the benefits. But this would do no justice to the willingness of the municipalities to collaborate. Summarizing the risks, the motivations and observation, the hypothesis can be made that the greatest risk is the difference between objectives among the municipalities and all the individual stakeholders. Almost every single participant is in favor of setting up an SSC. But very little thought has been put into the potential risks and if this is done, the area of public value was completely neglected. This could be due to people following current trends and thought without necessarily understanding the implications of organizational and administrative change. This hypothesis can be support by the most remarkable comment of the most important stakeholder:

“Why are you asking all those questions about risks? In that case we can quit right away!”

Apparently, ignorance is bliss.

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6 Evaluation and revised SSC risk management approach

After validating the SSC risk management approach in the current situation, an alternative approach was created by reallocating the activities. The original SSC risk approach was based on the assumption that the characteristics of an SSC influence stakeholder analysis. This assumption may not be accurate. The different phases of setting up an SSC were not correctly taken in account. In every phase different stakeholders have different salience. In the original approach, as shown in Fig. 4.7, research on the risk factors takes place per category, whereas in the new approach, shown in Fig. 6.1, first the risk factors are identified per stakeholder group and then ranked per category. This introduces a comprehensive dependency between the stakeholder, category and risk factors. 6.1 Evaluation The SSC risk management approach, resulting from chapter 4 was validated by means of a case study in the region Gooi en Vechtstreek. There were 17 participants interviewed, divided in 5 stakeholder groups. The following conclusion can been drawn after the case study:

- The SSC risk management approach can be used for identifying and analysing the risk; - The stakeholder influence is not properly utilized in the approach; - One stakeholder group was forgotten, Town council; - There were too many risk factors, and therefor too many questions and this led to difficulties

in drawing conclusions; - The negative formulation of questions led to resistance; - The different phases for the establishment of SSC have no clear place in the approach.

In the end the risk management approach was useful, but also laborious. Some recommendations will be made for a revised approach and described in the next sections. 6.1.1 Category dimension Results, observation and comments show that two of the dimensions i.e. customer orientation and stakeholder focus have duplications. Examples in the original questionnaire are in the area of communication, commitment, resistance, expectations. By the use of the stakeholder dimension there is already diversity between customer and stakeholders. Thereby these two are combined to one category: stakeholder focus. 6.1.2 Stakeholder dimension Stakeholder analyses should take place before the dimension category. The reason for this is that, observation and comments of the stakeholder groups show that they have different interest about the different categories. Also the phase is important in this dimension, the Town council for example is a completely different stakeholder in the feasibility phase than in the implementation phase and was completely forgotten. In the original approach, the stakeholder analysis was used to determine which stakeholder groups should be present in the case study and what their influence could be. These stakeholder groups did have a great influence on the risk factors. Results of the case study show this was a wrong hypothesis, phase 0: initial, feasibly study is all about Governance and Strategic rationale. The influence of managers, employees and end-users in this stage of setting up an SSC are less significant.

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6.1.3 Assessment dimension The first results after the interviews where not easy ordered, neither by category nor by stakeholder. This gave a result (see appendix 5) what was not useful, due to the abundance of factors. The results are reordered, by stakeholder group and category. There are too many factors, and score limited to 1 to 5 give to average scores. This led to everything appearing to be a risk. The negative formulation of the questionnaire was wrong. This lead to resistance, especially among those who believed in setting up an SSC. The motivation, open questions, and observation provide in valuable data. 6.1.4 Intervention & resolution This is neglected is this inquiry, but it is recommended to extend the SSC risk management approach

with tools for intervention and resolution of the SSC risk. 6.1.5 Inquiry per phase It is advisable to examine risk on a regular basis, as it is currently impossible to determine which risk will actually emerge in the future. Continual risk monitoring is advisable. The current (adjusted) SSC risk management approach should be used for this. 6.2 Revised SSC risk management approach

Consequently, the following activities are distinguished for this revised SSC risk management approach for local government.

Figure 6.1 SSC risk management approach – in public administration

An inquiry will take place to reveal the risk factors for the current situation. It is divided in 2 dimensions. First, the stakeholder dimension. An stakeholder analysis is carried out to determine

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which stakeholder groups should be present in the case study and what their influence is in defining the risk factors. It also provides input for shaping the results, like the open questions and the observation results. This influences the second dimension, where the risk factors should be pointed out categorized according to governance structure, strategic rationale, nature of services and stakeholder focus. These risk factors should be presented in a questionnaire, with a maximum of 5 factors per category. The questions should be neutrally formulated and scored 1 (low), 3(medium) or 5(high). Motivation, open questions and observation should be part of the assessment. The inquiry is followed by an analysis of the results, the assessment dimension provided in a classification of the risk factor. The results will provide in the ability to intervene and come up with a solution for the risks that are present at the creation of SSC and relevant to the stakeholder groups. For every phase in the process of setting up an SSC, the inquiry and assessment should be carried out.

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7 Conclusions & recommendations

The answer to the research question: “What are the risks of introducing a Shared Service Centre in the region Gooi en Vechtstreek?”, the concepts including SSC’s, risk management approaches, and stakeholders analyse are explained. Thereafter a SSC risk management approach is constructed. This approach is used for a case study within the region. The outcome based on interviews reveals that there many risks and the original SSC risk management should be revised. 7.1 Conclusions

The straightforward conclusion could be made that there are so many risks the municipalities should ask themselves if these risks are manageable and worth the benefits. But this would do no justice to the willingness of the municipalities to collaborate. Summarizing the risks, the motivations and observation, the hypothesis can be made that the greatest risk is the difference between the intentions to start an SSC among the municipalities and the individual stakeholders. Beside this, technical abilities should not be overestimated. Everything is possible but the question is, at what price. The case study shows this is seen as a high risk. The findings of the BEL-combination confirm this. Very little though has been put into the risks that could be present in the area of public value. Interestingly, risks that were viewed to be most present were often those seen as being possible to control, despite the fact that the quantitative data reveals high scored risk factors. Almost every single participant is in favor of setting up an SSC. But very little thought has been put into the potential risks. The area of public value was completely neglected in all the stakeholder groups. This could be due to people following current trends and thought without necessarily understanding the implications of organizational and administrative change. Motivation and observation shows, that almost every participant believed the establishment of the SSC should be undertaken, despite it being seen as risky. This hypothesis can be underpinned by the most remarkable comment of the most important stakeholder:

“Why are you asking all those questions about risks? In that case we might as well quit right away!”

Apparently, ignorance is bliss.

7.2 Recommendations

As described in the previous section the major risk is: no common objectives among the municipalities and stakeholder groups. Recommendation on behalf of this risk:

- Strategic choices are made in a systematic, collaborative and structured way during phase 0, and phase 1 of setting up an SSC. Research has shown that in practice the level of trust, cooperation and satisfaction increased between collaborating if this occurred (Janssen & Joha, 2011);

- Research all possible motives, as this can help to set the right level of objectives (Janssen & Joha, 2006);

- Mayor and Aldermen have to decide what the objectives are for setting up an SSC. These objects cannot be determined by work groups, conducting studies or hiring consultants. If the objectives are set they should ensure that the objectives are achieved (Strikwerda, 2005);

- Discuss the implications of benefits and losses as a whole for all the organizations. Motivation and observation show that there are big difference in expectations. Also that

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many forms of collaboration in the region failed because of disagreement on benefits and losses;

- Looking at the observations, it is also recommended to encourage communication between the stakeholder groups, and especially among the municipalities. Because, as this research shows, if people meet on a regular basis they get the same attitude and view towards an SSC;

- Visit the BEL-Combination, interview all individual stakeholders. They have experience within the region Gooi en Vechtstreek. Don’t forget the employees, as they were the ones with clear vision and knowledge about the subject.

Recommendations on behalf of the other risk are:

- Technical abilities should not be overestimated. Therefor try to foresee in all the extra costs, as mentioned before and visit the BEL-combination. Do not only speak to the board and top management, but also interview the ones who did the job as well;

- Ensure that all whom are involved have sufficient knowledge; - Do not forget about the public value!

7.3 Limitations & further research

This paper has its limitations. A single case study was investigated, which limits quantitative data. Further research should generalize the findings and facilitate a better understanding of the risk factors based on the stakeholder analysis and the proposed categories. An essential part of analysis is based on an incomplete questionnaire. The public value should be more present. The SSC risk management approach is missing the support for action on the recommendations. It is up to the researcher to carry out the intervention & resolution activities.

7.4 Reflection The process defining the SSC risk management approach was difficult, especially the influence that stakeholders had on the category and risk factors. Right from the beginning the assumption was that there is a coherence, it took quite a long time to find the right order. Sometimes conflicting views were found. For example Strikwerda warns to make it not a IT project or program, whereas Fox and Lacity encourage to invest in IT and technology enablement first. It is very hard to stick to the facts and not an opinion. The interviews should have been prepared better. This has influenced the rest of the research. I have to look for a way to not change the questionnaire too much but improve it so it is consistent and thereby valid. These are some miscalculations I came across:

1. Too little time between definitive version questionnaire and interviews its self; 2. Too little time for interviews, take 45-60 min instead of 30 min; 3. Interviews should be tested at least 3 times before actually conducting them. Every time I

took an interview, I discovered faults like incorrect formulations and definitions that were unclear.

Solution: o Minor errors or formulation faults are recovered; o Some questions are too elaborate; o Two questions which were too similar are removed;

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o It is very hard to stay objective since I now know a lot about SSC. I have my own opinion. You have to be very careful not to influence answers by reacting on what people have to say.

4. After having taken all the interviews, I reach the conclusion that the categories stakeholder and customer should be combined, as there were too many similarities in risk factor.

5. It is very hard for people to define why they think something is a risk; they prefer to come with the solution. It takes lots of time to ask over and over again why they think the risks will occur.

During the interviews it is very hard to be neutral and keep your knowledge, experience and thoughts to yourself, and thus stay objective. Often I was misled and started a conversation or maybe a discussion about a subject. It got better along the way.

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Janssen, M. and A. Joha (2009). "Simulation and animation for adopting shared services: Evaluating and comparing alternative arrangements." Government Information Quarterly 26: 15-24. Janssen, M. and A. Joha (2011). Types of Shared Services Business Models in Public Administration. The Proceedings of the 12th Annual International Conference on Digital Government Research. USA. Janssen, M., A. Joha, et al. (2007). "Exploring relationships of shared service arrangements in local government." Transforming Government: People, Process and Policy 1(3): 271-284. Janssen, M. and R. Wagenaar (2004). "Developing Generic Shared Services for e-Government." Electronic Journal of e-Government 2(1): 31-38. Keil, M., P. E. Cule, et al. (1998). "A Framework for Identifying Software Project Risk." Communications of the ACM 41(11). Lacity, M. C. and J. Fox (2008). "Creating Global Shared Services: Lessssons from Reuters." MIS Quarterly Executive 7(1): 18-32. Lyytinen, K., L. Mathiassen, et al. (1998). "Attention Shaping and Software Risk-A Categorical Analysis of Four Classical Risk Management Approaches." Information Systems Research 9(3): 233-255. Mitchell, R., K. , B. R. Agle, et al. (1997). "Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts " The Academy of Management Review Vol. 22(No. 4 ): pp. 853-886. Mitchell, R. K., B. R. Agle, et al. (1997). "Theory of Stakeholder Identification and Salience Defining the Principle of Who and What Really Counts." The Academy of Management Review 22(4): 853-886. Schmidt, R. C., K. Lyytinen, et al. (2001). "Identifying Software Project Risks: An International Delphi Study." Journal of Managemenl Information 17(4): 5-36. Schulz, V., A. Hochstein, et al. (2009). A Classification of Shared Service Centers: Insights from the IT Services Industry. Pacific Asia Conference on Information Systems. PACIS, AIS Electronic Library. Sorrentino, M. and M. Simonetta (2011). "Assessing local partnerships: an organisational perspective." Transforming Government: People, Process and Policy 5(3): 207-224. Strikwerda, J. (2004). "Shared Service Centers: hoe de weerstanden bij de invoering daarvan te overwinnen." Holland management review(59): 46-53. Strikwerda, J. (2005). "Shared Service Centers als samenwerkingsvorm tussen gemeenten." Openbaar bestuur 15(4): 28-31. Strikwerda, J. (2006). The Challenge of Shared Service Centers. The Conference Board European Council on Corporate Strategy: Roles, Structure and Challenges of the Corporate Office, London. Strikwerda, J. (2010). Shared Service Centers II. Den Haag, Van Gorcum. Su, N., R. Akkiraju, et al. (2009). "Shared Services Transformation: Conceptualization and Valuation from the Perspective of Real Options." Decision Sciences 40(3): 381-402.

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Ulbrich, F. (2006). "Improving shared service implementation: adopting lessons from the BPR movement." Business Process ManagementJournal 2 (2): 191-205. Vrakking, A. F. (2011). IT-Governance. Bussum, TuDelft. Vrakking, A. F. (2011a). Strategic Sourcing - gemeente Bussum. Bussum, TuDelft. Wallacea, L., M. Keilb, et al. (2004). "Understanding software project risk: a cluster analysis." Information & Management 42: 115-125.

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Appendix 1 Interviewees Jan Visser Town Clerk Wijdemeren Pieter Broertjes Mayor Hilversum Karen van Elk Town Clerk Hilversum Macha Kransen IT Manager Hilversum Theo Buitenweg Employee Hilversum Robin Nadorp Employee Hilversum Mirna van Veen End-user Hilversum Marcel Adriani Aldermen Naarden Ron Schoonenveld IT Manager Naarden Milo Schoenmaker Mayor Bussum Marjolein Plantinga Town clerk Bussum Lex de Jong Employee Bussum Pieter lensselink End-user Bussum Clemens Gastkemper Employee Bussum Roy van Midde Employee BEL-combinatie Jeroen Hermkens IT Manager BEL-combinatie Menno Pieters IT Manager BEL-combinatie

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0 = unknown, 1 = nil, 2 = low, 3 = medium, 4 = probably, 5 = high

Risk factor

Probability Impact Motivation

Governance structure

9/44/59/38 1 The status of the SSC and the control structure of the SCC will be unclear

61/10 2 Uncertainty about who will be responsible for the SSC

61/10 3 Uncertainty about who is responsible for the budget

61/12 4 Mayor & alderman have insufficient knowledge in the field of SSC and the control of SSC's

12 5 IT-Managers have insufficient knowledge in the field of SSC and the control of SSC's

12 6 Town clerks have insufficient knowledge in the field of SSC and the control of SSC's

3 7 The organizations dependent on the expertise of external

Marijn 8 The politic operates independently from the organization/ IT Department

44 9 IT depreciation and IT investments are not synchronized within the organizations?

Strategic rationale

3 10 The wrong (management) advice is obtained (Initialization phase: feasibility study)

3 11 That a decision is made solely on the conventional wisdom (too little on facts)?

19/20/21/25 12 The objective cost reduction is not met

25 13 There are insufficient funds to invest in (new) technology

25 14 Project planning of the establishment of the SSC is not achieved

5/23 15 Conflicts of interest occur? For example better service, close the customer and cheaper.

13 16

One is not aware that setting up an SSC is an organizational change, with all its consequences. Such as acceptance by the users, change of services and ways of solving problems.

22 17 Not the right time for setting up an SSC

26 18 Too much attention is paid to the technological (im) possibilities

Objectives SSC 19

That the current issues surrounding an SSC (IT) are not solve? (continuity, vulnerability, control, knowledge)

Nature of SSC service

57/4/30 20 Technological merge is hard to achieve

24 21 Insufficient products and services are to be found, so that the benefits will be achieved

25 22 Delay or interruption of the deliverables and services takes place

46 23 Insufficient knowledge and insight into its own products and services

46 24 Insufficient knowledge and insight into its own procedures and processes

44 25

Organizations working under architecture and then could be integrated into a new architecture

50/44 26 Legacy systems that are difficult to phase out

53/25 27 Unforeseen costs setting up an SSC

47 28

Contract management is not in place. So, contract cannot be integrated or can be terminated

Appendix 2 Questionnare

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Customer orientation

6 29 Too much time is spent on service level agreements

63/10 30 Uncertainty about which products and services are being delivered?

64/14 31

Unawareness that the design of new services and products (and processes) requires considerable time and will disruption and errors?

62/7/25 32 No acceptance by users

58/8/56 33

Major differences between the different customers (organizations) and their expectations?

58/27/35 34 Expectations and promises are not fulfilled?

2/25 35 Lack of marketing & communication

29 36 Wrong timing communication & marketing

48/32 37 Manager(s) of the SSC have no customer focus

Stakeholder focus

2 38 No confidence in the decision about the SSC?

15/17 39 One is not able to retain employees?

18/33/40 40 Unable to motivate the employees & managers

15 41 Unable to attract future employees

56/49/25 42 Insufficient skilled employees

16/34 43 Stakeholders are unable to change (not willing/not able)

31/44 44 Stakeholder have no confidence in the SSC (resistance)

60/36 45 Stakeholders are unable to give up their current position (managers & employees)

45 46 Relationships with current suppliers can not be managed

Questions

Observation

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Appendix 3 Risk factors

Nr phase Dimension Stakeholder Description Article/book

1 n.v.t. (Sorrentino & Simonetta 2011)

2 Implementation Customer orietation

user geen duidelijke communicatie gebrek aan vertrouwen over het goed onderbouwde beslissing voor SSC

(Janssen & Joha, 2011)

2 Implementation Stakeholder employee geen duidelijke communicatie gebrek aan vertrouwen over het goed onderbouwde beslissing voor SSC

(Janssen & Joha, 2011)

3 strategic strategic rationale

mayor town clerk

blindly follow management literature or external advice (Ulbrich, 2006)

4 design Nature of services

town clerk Complex business environment (Rama & Nitin, et al., 2009)

5 Plan strategic rationale

mayor town clerk

the expected benefits rely on the combined advantages of both centralized and decentralized models models, which are often conflicting

(Janssen & Joha, 2006)

6 Design Customer orietation

manager Lack of collegial behavior through arms length use of service level agreement, too much time spent on SLA’s

(Strikwerda, 2008)

7 Design Customer orietation

user Business acceptance (Lacity, 2008)

8 Design Customer orietation

manager Different resources, capabilities, needs, interests and goals of the users

(Janssen & Joha, 2007)

9 Design Governance mayor town clerk

Unclear or wrong status of SSC, e.g. SSC being labeled as a division, resulting in decoupled processes for target setting and resource allocation

(Strikwerda, 2008)

10 Design Nature of services

town clerk manager

Lack of clarity who decides the budget of a ssc, who decides on the scope of its services, transfer prices

(Strikwerda, 2008)

11 n.v.t. (Rau, 2004)

12 Design Governance mayor town clerk

Not fully recognising the need for IT governance and understanding the IT governance mechanisms might result in the failure of the SSC operation.

(Janssen & Joha, 2007a)

13 Design strategic rationale

mayor town clerk manager employee user

Organizations discovering that implementing a SSC is not just an efficiency improvement, but a fundamental change in its internal governance and hence suffering the effects of wrong processes for change management:

(Strikwerda, 2006)

14 Design Customer orietation

manager employee user

process specification is time consuming and prone to errors (Strikwerda, 2006)

15 Design Stakeholder manager Retaining staff (Lacity, 2008)

16 Implementation Stakeholder mayor town clerk

Many BPR projects failed due to resistance to change. (Ulbrich, 2006)

17 Implementation Customer orietation

manager employee

Loss of expertise in business units on e.g. IT, and therefore lack of expertise in being a professional customer of the SSC

(Strikwerda, 2008)

18 Implementation Strategic rationale

employee SSC-workers facing loss of identity and subsequent loss of motivation

(Strikwerda, 2006)

19 Implementation strategic rationale

mayor town clerk

Allocation off cost: often not known, no attention paid to because operational motive is to save costs

(Strikwerda, 2006)

20 Implementation strategic rationale

manager often cost reduction has priority, limiting business units in their market customer responsiveness

(Strikwerda, 2007)

21 Implementation strategic rationale

mayor the intended benefits are not met (Janssen & Joha, 2007)

22 Implementation strategic rationale

town clerk Timing (Lacity, 2008)

23 Implementation strategic rationale

manager Lack of clarity whether the services of a ssc are mandatory to the business

(Strikwerda, 2008)

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24 Implementation Nature of services

town clerk Move enough processes to obtain savings without sacrificing service or controls

(Lacity, 2008)

25 Implementation Nature of services

risico vanaf blz 47, plus weer een hele andere categorisatie. (Bergeron, 2003)

25 Implementation strategic rationale

risico vanaf blz 47, plus weer een hele andere categorisatie. (Bergeron, 2003)

25 Implementation Customer orietation

risico vanaf blz 47, plus weer een hele andere categorisatie. (Bergeron, 2003)

26 Implementation strategic rationale

town clerk overestimate technology (Ulbrich, 2006)

27 Implementation Nature of services

manager make sure that the promised use of resources agreed on, will be fulfilled.

(Ulbrich, 2006)

28 Implementation Nature of services

manager Linkages across multipledelivery channels (Lacity, 2008)

29 Implementation Customer orietation

manager user

Major changes involved when transitioning to shared services are process and communication related

(Prakash & Goh, et al., 2007)

30 Implementation Nature of services

manager SSC is an internal arrangement and managing a SSC needs attention at a more detailed level

(Janssen & Joha, 2006)

31 Implementation Stakeholder manager Managers of business units not trusting the capabilities and quality of services of SSC

(Strikwerda, 2008)

32 Implementation Customer orietation

manager Managers of ssc’s overbearing business managers and pushing services

(Strikwerda, 2008)

33 Implementation Stakeholder manager employee

Transitioning work (Lacity, 2008)

34 Implementation Stakeholder manager No commitment of managers for the project (Ulbrich, 2006)

35 Implementation Stakeholder user Stakeholders may all have different requirements and expectations regarding what should be accomplished with the SSC.

(Janssen & Joha, 2006)

36 Plan Governance Mayor town clerk manager

Veranderende schaarsteverhoudingen impliceren steeds veranderende machtsverhoudingen. Diegenen wier machtsbasis erodeert, die dus hun machtspositie moeten opgeven, zullen bewust, maar vaker onbewust, zich daartegen verzetten.

(Strikwerda, 2004)

37 n.v.t. (Strikwerda, 2004)

38 Design Governance Mayor Oplossingrichting voor inrichten governance (Grant & McKnight, et al, 2007)

40 Plan stakeholder Town clerk manager

Lack of management commitment (Ulbrich, 2006)

43 n.v.t. (Strikwerda, 2008)

44 design Nature of services

manager No architecetuur principes (Vrakking,2011a)

44 Plan Governance Mayor town clerk

No regie organisatie (Vrakking,2011a)

44 strategic Nature of services

town clerk Different afschrijvingstermijnen en kostenplaats structuur tussen de organisaties

(Vrakking,2011a)

44 n.v.t. (Vrakking,2011a)

44 Implementation Stakeholder user Lack of - colaberation (Vrakking,2011a)

44 Implementation Nature of services

employee Legacy systemen (Vrakking,2011a)

46 Implementation Nature of services

manager Juiste afstemming leveranciers Observation, expert view

46 Implementation Nature of services

manager Voldoende kennis over de onder te brengen producten en diensten in een SSC

Observation, expert view

47 Plan Nature of services

manager Contract beheer in orde is, contracten ontbonden kunnen worden

Observation, expert view

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48 Implementation Customer orietation

town clerk possibility of weak management (Earl, 1996)

49 design Stakeholder manager inexpereinced staff (Earl, 1996)

50 design Nature of services

employee outdated technology skills (Earl, 1996)

52 Implementation Customer orietation

manager Business uncertainty (Earl, 1996)

53 Implementation Nature of services

town clerk manager

Hidden cost (Earl, 1996)

54 lack of organizational learing (Earl, 1996)

55 danger of eternal traingle (Earl, 1996)

56 Implementation Stakeholder manager loss of innovative capacity (Earl, 1996)

57 Nature of services

manager tecnlogische indivisbility (Earl, 1996)

58 strategic Customer orietation

mayor fuzzy focus (Earl, 1996)

59 evaluation Governance town clerk Failure to adapt the system of internal governance to working with SSC’s

(Strikwerda, 2006)

60 plan Stakeholder town clerk Failing to establish mechanisms for trust, resulting in business managers hiding or doubling processes

(Strikwerda, 2006)

61 evaluation Governance mayor Boards failing to see that their role changes from running a portfolio of businesses to running one integrated business system, with subsequent need for conflict resolution

(Strikwerda, 2006)

62 evaluation Customer orietation

user Customer Mandate

(Keil & Cule, et al. 1998)

63 Scope and Requirements

(Keil & Cule, et al. 1998)

64 Implementation Customer orietation

user

Execution - erros and disruption

(Keil & Cule, et al. 1998)

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Appendix 5 risk factors per stakeholder

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Appendix 6 Dairy Week 5 02-02-2012 – Delivery rapport – Marijn Janssen Questions: Structured interviews? 03-02-2012 – Appointment with MJ outcome: Extra dimension: Development phases: Shared Service Center 1. (Need for) change 2. Decision 3. Preparation 4. Operation So, the outline will be categorized by, 1. (Need for) change 2. Decision (is this already take months, how should it go on) No urgency Lack of knowledge 3. Preparation Suddenly urgency (most difficult part off the establishment) 4. Operation Then within these faces the dimensions (or other dimensions like governance, technical…?); - Governance; - Motivation (strategic rational); - Nature of services; - Customer focus. Then the risks List of Risks - Out of literature - Completion thru interviews - Check plausible and on importance and dept = impact Interviews: Stakeholder analyse - (potential) Users off SSC, department heads and employees - IT managers - (potential) administrator - Board member/management like; mayor, alderman, town clerk Within the region: Hilversum, wijdermeren, Naarden, Bussum Exciting SSC: (Leiden, Drechtsteden) Week 6 Theoretical framework:

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- Read and search for more theory - Struggle with what to put in the paper for theoretical background - Hours off browsing the internet, every single paper underlines that there is more. Interviews: - Planning interviews – easy, everybody is very enthusiast en willing to cooperate. - Exciting SSC: change of plan, looking nearby because of time limit Week 7 Theatrical framework: - Difficulties with categorising the risks, so many authors so many opinions - Didn’t find any frameworks for risk identification, except for Noordam – Shared service centre –

frameworks 17-02-2012 – Appointment with MJ Week 8 Interviews: I’ve set up the interviews by examine 20 articles and 3 books. Just start on page one and mark the risks. Putting them in an excel sheet categorising on dimensions. - MJ comment on interviews. Took over most of the advice. Disagreed on the recommendations

according to scale and categorising. Reflection

6. Too little time between def. version interview and interviews its self 7. Too little time for interviews, take 45-60 min instead of 30 min 8. Interviews should at least 3 times be tested before taken into production. Every time I took

an interview, I discovered faults like formulation fault, wrong definitions I had to explain. Solution:

o Minor errors or formulation faults are recovered o Two questions, which where to similar are removed o Some questions are extensive o After taken all the interviews, stakeholder and customer will be combined. It’s too late

(already taken 6 interviews). 9. It is very very hard to stay objective since I now know lots about SSC. I have my own option.

It takes great attention not to influence answers by reacting on what people have to say. 10. It is very hard for People to define why they think it is a risk; they rather come with the

solution. It takes lots of time to ask over and over again why they think the risks will appear. How come?

o The way I structured the interview? o Because this is what people do? o Should I not have ignored MJ his comment and use yes, medium or no instead of a scale?

Generally I think I missed out here. I should have prepared the interviews better. This will influence the rest of the research. There the idea is to, if the SSC will be established, take the interviews in every phase: Phase 0: Orientation, the need for change Phase 1: Decision, explore and plan the SSC Phase 2: Design, preparation for the SSC and planning the realisation Phase 3: Realisation, the realisation of the SSC

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Phase 4: Evaluation I have to look for a way to not change the questionnaire to much but for sure make in more solid than it is now, that it is still consistence and there by valid. Overall commented for now is that I’m doing a great job. No one has come up with more risks. I rearranged the questionnaire, so every dimension has the same amount of question. This is nice, to make a spider web diagram. But did I cheat? Or is it a new insight? Interviews Week 9 Spend for too much time on excel diagrams. Stupide. Now I have some diagrams, what do they tell me. Overall is hard to keep the focus on the overall outcome, very easy losing myself in theoretical details. Keeping the right overview, why risks analyse, why shareholders analyse. I’m wondering if it will be a coherent paper in the end. Interviews Week 10 Interviews Pieter Broertjes Feedback Marijn Janssen Diagram can tell me quite a lot: Everything is a risk Week 11 Writers block, if I’m not gone make it. Hier heb ik het laten liggen, de enige week dat ik echt tijd had te weinig gedaan. Week 12 After feedback form Marijn, review fundamentals of the theoretical framework on risk management. Working towards an end by analysing the risks. Remarkable How can it be? Question 12 “Dat het uitgangspunt kostenbesparing niet wordt gehaald?” overall score average. In literature this is the most significant risks. The impact is high for bestuurders and gemeente secretarissen average 4.75, yet they think the Probability is low, average 1.75. Is this wishful thinking? What to do with this kind of information. From the beginning my feeling is that this is the highest risk. Why? - This is my opinion? - Literature supports this opinion (but also claims the opposite)? - My co-workers and other manager on the same level do support this opinion. Week 13

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Disaster, I decide after the feedback of Marijn Janssen last week to rewrite chapter 3. I did not have enough distance all those weeks before. I completely last my structure and mixed up, the theoretical research, my model construction and my research findings. At first I thought I did a nice job, but after taken some distance I realised it was mess. I spilt chapter 3 in two chapters: 3. theoretical framework and 4. Risk management approach Week 14 Again chapter 3 and chapter 4, what a disaster. Everything upside down. The strangest thing is that I was on the right track from the beginning. Somehow I got lost in the middle. It takes endless time rewriting and reorganization these chapters and make them consistent. Week 15 The end is near. Drawing conclusions and formulate recommendation takes more time then estimated. Anyhow, I see lots of missed opportunities, insights which are worth noting. Every time, I stop writing and just think about my findings I get new insights and realize that these thing are worth to mention. Like that there is few research done on risk in some of the phases, as example the initiation phase or the evaluation phase. Probably, only on those phase alone there is the possibility to write a whole 50 page thesis.