Emerging shared service organizations and the service‐oriented enterprise

Abstract

Purpose Service‐orientation enables new organizational forms and organization initiate shared service centers (SSCs) to become shared service organizations (SSOs) or service‐oriented enterprises (SOEs). Services can be performed in‐house, shared or outsourced. However, this form of organization faces significant challenges and to date not much research has focused on capturing experiences in this domain. The aim of this paper is to identify critical management issues in the development of service‐oriented arrangements. Design/methodology/approach The research used a combination of literature and case study research, whereby literature provided the theoretical foundations and the case study is used to identify the critical research challenges. Findings Technological developments enable a service‐oriented approach, leading to new organizational forms and a shift towards a more market‐oriented type of control. The SOE is an enterprise that is modularized in business domains and organized around SSCs. New products can be created by orchestrating the services provided by the service centers, and this orchestration is expected to become a core capability. Service centers display varying levels of modularity, which influences the sourcing options. In our case study, the SSO and SOE emerged and evolved out of SSCs, and as a result an incremental, staged approach should be adopted with regard to its implementation. The main critical management issues are a carefully executed strategy, the redesign and reorganization of activities and roles, the standardization of processes, applications and the underlying IT architecture, and management of the transformation by involving all stakeholders. Research limitations/implications The SOE is explored using a single case study, which although it provides in‐depth insight, limits statistical generalization. Further research should focus on the benefits, drawbacks and risks of these concepts. In addition, the bundling and orchestration of services need to be investigated. Practical implications This type of change is often technology driven. Companies should address the critical management issues when they adopt a more service‐oriented approach at a business level. Originality/value To date, there are very few empirical studies that look at SSO and the SOE. This paper offers a contribution by investigating a real‐life case study, analyzing the kind of organization involved, and identifying the challenges and issues.