Business Process Improvement in a Governmental Shared Service Centre: A New Approach to BPR

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1 Business Process Improvement in a Governmental Shared Service Centre: A New Approach to BPR Ömer Faruk Aydinli Logica, BPM Competence Centre, Arnhem, the Netherlands Meander 90, P.O. box 7015, 6801 HA, Arnhem, the Netherlands omer.aydini@logica.com Pascal Ravesteijn Research Centre for Process Innovation, HU University of Applied Sciences, Nijenoord 1, 3552 AS Utrecht, the Netherlands pascal.ravesteijn@hu.nl Abstract This paper describes a business process improvement project in a governmental Shared Service Centre (SSC). During the past decade many public and private organizations have set up a SSC. Typically this is done by concentrating the IT, Procurement, Staff Management and Financial Economic Businesses (FEB) departments in a separate organizational entity. Even if management understands the benefits of a SSC and supports the implementation the execution is crucial. If the organizational structure and business processes are poorly designed during the implementation process then the resulting service to the customers of the SSC will be very problematic. In this case management will usually need to initiate an organisational redesign and process improvement trajectory within several years of the start of a SSC to really achieve its strategic objectives. In this paper an investigation at a governmental SSC is described. The reasons for poor execution of Procurement and FEB processes by the SSC are explored. Then based on a new BPR approach, developed by the Utrecht University and Logica, new processes for the SSC were developed. As a proof of concept several of the newly developed processes were actually implemented which let to a reduction in FTE s for both processes. The total amount of FTE within the FEB was reduced from 19 to 11 and the procurement process could be executed with 3FTE less. We expect that the efficiency of the business processes and the quality of service delivery will be more improved in the future by implementing our remaining recommendations although this will take more time and financial investments. Key Words: Business process improvement, Shares Service Centre, Organizational redesign, Governmental organization, Business process reengineering JEL Classification: H11 1. INTRODUCTION During the past decade we have seen that an increasing number of organizations have set up shared service centers (SSC). This trend started in de private sector but the public sector has followed rapidly. The current economic climate and the increasing competition are forcing private as well as public organizations to evaluate and improve existing business models for operational 1

2 efficiency and many find that the SSC model offers a more efficient service delivery compared to their current operational service processes. The most important objectives of setting up a SSC in both the public and private sector are: cost reduction, achieving process efficiency, creating transparency, implementing compliancy and improving the quality of service delivery. (Searle 2006; Bergeron, 2003) SSC is successful when it provides a competitive advantage for the organization by achieving its overall strategic objectives. Most researchers define shared services as the concentration of functions, services, or resources into one separate organizational entity. (Fyfe, 2006; Rahman, 2005; Opheij and Willems, 2004) In this paper we use the following definition for SSC: A shared service centre is an accountable entity in the internal organization of a firm tasked to provide specialized services to operational entities (divisions, business units) on basis of a service level agreement and full charge out of costs on basis of a transfer price system (Strikwerda, 2006). Ever since the start of the first SSC s were implemented research has been done to identify the critical success factors during implementation (Burns and Yeaton, 2008; Farquhar, Fultz and Graham, 2006; Strikwerda and Seesing, 2003), also benchmark studies are conducted continuously. Even though there is a large amount of research being done organizations still find it difficult to achieve the expected benefits of a SSC. A Benchmark study held by the Johnsson Group shows that about 80% of the Fortune 500 companies that operate in a shared service environment are not using best practices. (Purtell, 2005) Seemingly there is room for improvement in this area. The CFS s and best practices are often not taken into account during the set up process and organizational design of SSC s. Even if management understands the benefits of a SSC and supports the implementation the execution is crucial. If the organizational structure and business processes are poorly designed during the implementation process then the resulting service to the customers of the SSC will be very problematic. This will result in customers being reluctant to get services from the SSC because of high costs and poor service delivery. Typically this is when management of SSC realizes that a business process improvement project is necessary to be able to still achieve its strategic objectives. In this paper an investigation at a governmental SSC is described and the reasons for poor execution of procurement and FEB processes by the SSC are explored. Furthermore the researchers have advised the SSC in the development of new processes in order to solve the organizational and operational problems. In this research we have used a new business process reengineering (BPR) method which is developed by the Utrecht University and Logica. This approach was validated in an earlier project at a Dutch e-government Service Department (Aydinli, Ravesteijn and Brinkkemper, 2008). The BPR method helped the Dutch e- Government Service Department (DeGSD) to accomplish significant operational and organizational improvements. In this research we wanted to explore if the method also works in a different governmental environment and also specifically for setting up SSCs. The new BPR approach (Aydinli et al., 2008) consists of the following six phases: 1. Map the enterprise information architecture of the department by using enterprise architecture modeling (EAM). 2. Choose a strategy discipline. 3. Define the primary processes of the department by using business process modeling techniques and make sure that the to-be processes are aligned with the chosen strategy discipline. 2

3 4. Optimize processes. 5. Choose a knowledge management strategy and implement this in such a way (with supporting tools and procedures) that it is aligned with the chosen strategy. 6. Define and implement controlling mechanisms for all departments that are involved. The remainder of the article is as follows: in section 2 a short introduction of each phase is given from an SSC perspective, then in section 3 the improvement strategy for the SSC is elaborated upon after which conclusions will be drawn and discussed in section 4 and future research topics are mentioned in section BPR APPROACH FROM A SSC PERSPECTIVE The new BPR approach as described above consists of six phases that are explained further from a SSC perspective in the following subsections Enterprise Information Architecture The new BPR approach begins with Enterprise Information Architecture (EIA) as a starting point because it describes all relations and information exchange with all internal and external stakeholders. After setting up a SSC there will be a certain distance created between the service provider and customer. As a result SSC s are providing their services increasingly to their customers via processes that are supported by IT (E-Procurement, Workflow Management Systems, ERP, Business Intelligence etc.). It is also essential to have visibility in the complete information infrastructure of an enterprise for controlling and improvement purposes. EIA can create this visibility because of its holistic approach of all information aspects of the enterprise. (Koning, Bos and Brinkkemper, 2008) Besides, it s important to look first from a helicopter view how the SSC is functioning before you redesign your business processes. Enterprise Architecture Modelling (EAM) is a method for creating an EIA in a structured way. The EAM technique consists of the following four steps. (Koning et al., 2008) 1. Create a supply chain diagram (SCD): SDC can provide information for managers when they want to decide in which manner information and services will be exchanged between the enterprise and external stakeholders. 2. Create an enterprise function diagram (EFD): EFD s are a powerful modeling tool for the highest activity level of an enterprise. The exchange of services and products between the internal functions but also the external environment are shown in these diagrams. 3. Create application and scenario overlays: An application overlay shows the application support for the enterprise functions in an EFD. A scenario is a continuous process of a request flow by various enterprise functions, which results in one or more feedback flows. A scenario overlay provides insight in the interoperation of enterprise functions and the completeness of the EFD. Only essential flows are elaborated into a scenario. 4. Create a system infrastructure diagram: A system infrastructure diagram shows the complete information technology infrastructure of an enterprise. 3

4 Figure-1: Model Decomposition EAM Source: (Koning et al., 2008) The goal of creating an Enterprise Information Architecture in the BPR approach is to: Identify all stakeholders of the SSC. Identify the type of information exchange (relations) between external and internal stakeholders of the SSC. Identify which department is responsible for which part of the processes. Create visibility from both a high level and the interoperational process flows within an SSC. Identify all applications and tools used in the SSC Choose a Strategy Discipline A strategy discipline provides clarity in the main focus of an organization. The chosen strategy discipline defines in which direction all activities in an organization have to act to achieve a corporate goal. Therefore it also effects design decisions when developing business processes. Very often SSC s are formed by reorganizations. The IT, Procurement, Staff Management and FEB employees of different organizational entities and even from different regions will be installed in one SSC. These employees are used to act in line with the strategy of the entity where they came from. It is important to choose a value discipline and explain it to the employees so that they can act in line with the wishes of their new employer. One other important aspect of a value discipline is that the primary processes of a SSC have to be designed according to the chosen value discipline. Treacy and Wiersma (1995) describe the following three value disciplines: 1. Operational excellence; companies with an operational excellence strategy offer relatively high quality products or services for a rather low price. The focus is on efficiency, standardization, streamlined operations, supply chain integration, low inventories and high volumes. 4

5 2. Product Leadership; companies with a product leadership strategy excel in innovation and brand marketing. The focus is on new product or services, technological innovation, R&D, time to market and high margins. 3. Customer Intimacy; companies with a customer intimacy strategy excel in customer attention and long term relations. The main focus is on exceeding customer expectations, reliability, customer satisfaction and CRM. Any organization can choose anyone of the value disciplines mentioned above after which it should consistently act upon it. Treacy and Wiersma (1995) state that a company can choose only one value disciplines if it strives for real competitor advantage. This however does not mean that the other two value disciplines can be ignored. But the main focus will go to the chosen one Defining Primary Processes With EIA s you can create a high level visibility concerning the essence of the organization and the kind of information flows that take place. It s also used as a starting point to create a more detailed overview of the business processes. Smith and Fingar (2003) define a business process as the complete and dynamically coordinated set of collaborative and transactional activities that deliver value to customers. To capture processes we use Business Process Modeling which is a discipline for describing business processes, commonly in a graphical form, to enable awareness and analysis of processes (Weske, 2007). The emphasis of process modeling is on how processes are currently executed (as-is situation) within an organization. A business process model forms an important foundation for the process analysis in the optimization phase. Therefore it is essential to have a process model that represents the actual business processes in an organization and which is agreed upon by all stakeholders. There are many business process modeling techniques and as a result a lot of research is available that can help in choosing the right technique and tool for the project at hand. (Recker, 2006; Bandara, Gable and Rosemann, 2005) Based on the process analysis the SSC can define a set of standard processes that describe how to perform the services in a more efficient way in the future (to-be situation). These standard processes can also be used to establish consistency in service delivery across the SSC Optimize Processes The increasing competition within the global environment forces organizations to determine the most efficient and cost effective implementation of their business processes. In section one we have mentioned that cost reduction and achieving process efficiency is one of the most important objectives for setting up SSC s. Therefore it is very important to periodically analyze business processes of a SSC and evaluate if they can be improved. The following business process evaluation and improvement philosophies can be used within a SSC to analyze business processes. Activity Based Costing (ABC): is a method for understanding the costs structure of activities within business processes. After defining the SSC s processes the ABC technique can be used to determine primary the most costly process parts this information 5

6 in turn is used to determine if the process can be improved in such a way that it is more efficient and also cheaper. (Cooper and Kaplan, 1991) Lean Management: is a business process improvement approach which has an emphasis on the maximization of customer value and service by making service delivery as efficient as possible. (Womack and Jones, 1996) Activities that do not contribute to customer value (called waste) are continuously removed from the business process. Six Sigma: is a business process improvement approach which has an emphasis on improving process quality in a quantitative way. The method strives towards process perfection by eliminating defects (anything outside process specifications). (Pande and Holpp, 2002) Theory of Constraints: start from the analogy A chain is only as strong as its weakest link it is clear that the performance of any value-chain or business process is dependent by its constraints. (Goldratt, 1990) Therefore constraints will be identified first. Moreover if the organization wants to increase its capacity the capacity of the constraint will have to be increased first. When processes are modeled they will be more readily understood. This in turn means that these processes can be analyzed with one of the improvement philosophies described above. ABC can be used if a SSC want to decrease operational costs while lean management can be used to eliminate irrelevant activities within business processes. When a SSC wants to improve the quality of service delivery then Six Sigma is recommended, TOC can be used if the SSC wants to improve its service delivery capacity or streamline its processes Knowledge Management The management of knowledge within enterprises has become an important topic in the last 15 years. Sutton (2003) summarized why an enterprise should implement knowledge management (KM). The following are especially appropriate for a SSC: 1- KM will help locate, study and share all information relevant to decision making as well as share knowledge that has been acquired or generated over time. 2- KM will help to implement programs and structures within the organization for continuous learning and sharing of best practices. This ensures improved knowledge sharing and knowledge re-use. 3- KM enables better usage of IT by sharing knowledge of how available IT can be used or deployed. Knowledge Management can help enterprises to reach a higher level of effectiveness and efficiency. Garfield (2006) defined a set of guidelines in order to create added value for an enterprise by implementing KM. Some examples of these guidelines that are important for SSC s are: 1- Avoid doing things twice by using KM systems. 2- Take advantage of existing expertise and experience by sharing them in the organization. 3- Capture key information on all work performed so that everyone will know what others have done and who to contact for further details. 4- Provide and create methods, tools, templates, examples and data to streamline business and services. As KM becomes embedded within modern enterprises, it becomes more and more important for managers to formulate the right KM strategy and implement mechanisms that allow reuse of knowledge within the enterprise. Jashapara (2004) described two types of KM strategy. The first 6

7 one is codification, which is based on codifying and storing explicit knowledge within in databases. It is heavily based on IT. The second on is personalization, which is based on tacit knowledge within an organization. It is heavily based on the human assets of an organization. Hansen, Nohria and Tierney (1999) formulated the following questions to guide organizations in KM strategy formulation taking into account the situational factors of an organization. 1- Do we offer standardized or customized products/services? 2- Do we have mature or innovative product/services? 3- Do our employees rely on explicit or tacit knowledge to solve problems? The codification strategy fits when an organization offer standardized and mature products/services and employees rely on explicit knowledge to solve problems. The personalization strategy fits when an organization offers customized and innovative product/services and employees rely on tacit knowledge to solve problems. It is very important to think about knowledge transfer between the SSC and the end users of its services. This should typically be taken into account during the setup process of a SSC. The knowledge about specific organizational needs and working procedures are very important in service delivery. If personnel will be relocated to the SSC some tacit knowledge can be transferred. Sometimes personnel can refuse relocation and will leave the organization. In that case certain knowledge can be lost. Therefore we advise to codify specific knowledge before the setup processes. This will help knowledge transfer from locale sites to the SSC. The SSC can use this knowledge during service delivery to the end users Controlling Mechanisms Merchant and van der Stede (2003) argue that a tight management control system is critical to the success of an organization. While the business processes of a SSC can be designed very efficient, it is the execution of these processes by employees that is crucial. To ensure that employees execute business processes according the best interest of the SSC and its customers, management control is necessary. A good control mechanism maximizes the probability that the objectives of the SSC will be achieved and minimizes the risk that employees take actions the SSC does not want. Merchant and van der Stede (2003) found that there are three control types. The first is called result control and is based on rewarding individuals for generating good results and penalizing bad results. In this way the actions of employees are influenced in such a way that employees tend to be concerned about the consequences of the activities they perform. The organization does not dictate to employees what actions they should take; instead employees are empowered to take those actions of which they believe that it will produce the desired result (Merchant et al., 2003). The second control type is action control, which ensures that employees perform (or do not perform) certain actions known to be beneficial (or harmful) to the organization. It is important to define what actions are acceptable or unacceptable, to communicate those definitions to employees and to observe or otherwise track what happens and reward good actions and punish those that deviate from the standard set (Merchant et al., 2003). The final control type is personnel control and is implemented by strict selection and placement of employees, training and job design. 7

8 3. CASE STUDY: IMPROVEMENT OF A GOVERNMENTAL SSC The governmental SSC has been set up in The head office decided to locate the IT, Purchase, Staff management and FEB departments of different sites in a SSC. The aim of setting up a SSC was cost reduction, improving service quality and enabling local sites to focus on their core businesses. When the set up process was finished and the head office decided to make the SSC operational various organizational problems occurred such as: During the set up process the personnel of different sites were relocated to the centralized SSC. The relocation caused a lot of frustration among the personnel. The knowledge transfer from sites to the SSC was not managed well. Some employees refused transfer and left the organization. There was no commitment between the local sites and the head office of the ministry on how the SSC should be positioned within the organizational structure. The business processes were not described in detail and there was no visibility in the execution. The development and implementation of the new technical facilities (E-procurement, Workflow Management System, Contract Management System etc.) was not completely finished but the SSC was made operational anyway. There was a lack of corporation between the internal functions of the SSC. The SSC was not functioning in an efficient way, which was the cause of high service costs to services users. The cooperation between the users and the SSC was not optimal. There was disappointment because of service delivery quality and high costs. Finally, because of these operational problems, sites were reluctant to use services from the SSC Redesigning the Shared Service Centre The goal of our research was to analyze the operational problems and to propose possible solutions, based on the new business process reengineering method. The first phase of the BPR approach is to develop an Enterprise Information Architecture for the organization. This is done to get insight in the highest activity level of the SSC. The information and service exchanges with different stakeholders need to be clear on high level. The SCD of the SSC identifies the stakeholders to whom the organization has a relation and it visualizes the kind of information exchange between the different stakeholders. Next an Enterprise Function Diagram was modelled to identify the responsibilities of each internal department. With the EFD the information exchange between internal functions in the SSC is captured. Also the hierarchical ordering of an EFD shows managers the departments and activities under their supervision. To construct the EFD we have interviewed 4 team leaders. Based on the interviews we found that there was not a commitment between the different departments on responsibilities for some (parts of) processes. This in turn made it difficult to develop complete scenario overlays, because there were gaps in inter-operational processes. One example is the inter-operational Retirement process. When an employee stops working at a local site, they fill in a form, which is then send to the staff management department. The staff management employees perform the registration in their staff 8

9 management systems. However other internal departments (e.g. IT and FEB) do not always receive this information by the staff management department. When an employee leaves the organisation his or her user accounts and workflow tasks have to be removed by the IT department. This is very critical because not doing this causes IT security risks and possibly also governance issues. Also the SSC is paying a license fee per user, if a user account is not removed the license payment will continue. In addition the FEB department has to check whether an employee has any open advanced salary payments which have to be deduced from his last salary. Since a formal trigger to the IT and the FEB departments was missing a first quick win for the project was discovered. We organized group sessions with the team leaders and familiarized them with the EFD model and discussed the issues that were detected. Furthermore solutions were discussed and commitment gained to solve this kind of inter-operational issues in the future. The second phase of the BPR method is choosing a strategy discipline to get a clear sense of direction within the SSC. We spoke with the management team of the SSC and they explained that an operational excellence value disciple was chosen during the set up process because the service that SSC s provide is not tailored but standardized and the main focus is on efficiency and also the volume of provided services is predicted to be high. An important focus then becomes to determine whether the operational business processes are indeed designed with this strategy in mind. This is taken into account during the remaining phases of the BPR project. In phase 3 of the BPR approach all primary processes of the procurement en FEB department were described and visualized in detail by using business process modelling techniques. The primary processes which were analysed were: 1- Material procurement, 2- Service procurement, 3- Contract management, 4- Accounts payable, 5- Accounts receivable, 6- Declarations, 7- Asset management. As an example (to show the amount of activities and roles involved), in figure 2 the current account payable process is depicted and in figure 3 the procurement process. Figure-2: Account Payable Process (IST) 9

10 Figure-3: Procurement Process (IST) Although there were process models available we were told us that these did not represent the actual situation. Therefore it was decided to develop new process models by following the execution of tasks by employees. It was hard to model a uniform process because at different local sites jobs and tasks were performed in slightly different manners. For example, the financial employees were registering the invoices of their own site and the purchasers were buying goods for their own location while both took into account any special needs of their site. Such a way of working is in accordance to a customer intimacy strategy while the organization had chosen the operational excellence strategy. The figures above are meant as an example and therefore not readable in detail, however the different colours in the figures represent the different roles that execute an activity. As can clearly be seen there are too many activities and roles involved in the process. This again is not in line with the chosen operational excellence strategy. In the optimization phase we analysed the processes from a lean management perspective. Although control activities are important there seemed to be a lot of redundant activities. Also some activities were still done manually while they could be automated without too much effort and costs. Based on this we developed a new process model in which a lot of activities were either removed or automated (see figures 4 and 5). During the analysis of the account payable processes we found that the constraint (weakest link) of the process was the scanning function. This task was not taken into account during the planning. The team leader was aimed at having all incoming invoices scanned and registered on the day off arrival, however the service level agreement (SLA) stated that this task should be completed within 3 days after arrival. The team leader stated that he was doing this to motivate his employees to register more invoices in one day. This caused a major problem. Because all employees started at 7:00 in the morning and there was never any work in progress most people had to wait until 9 o clock before scanned invoices became available for further processing. The fact that the department was able to register all incoming invoices in one day showed that there was an overcapacity. Therefore we recommended to organize the scanning function with one flexible (scanner and registrar) employee and to decrease the amount of registrars. This recommendation was made based on the calculation of the amount of personal needed to register the incoming invoices within 3 days as according to the SLA. The calculation was based on an analysis of the 10

11 incoming invoices per month during the previous 3 years. The new way of working allowed the process to run more smoothly within the boundaries of the SLA and with less people needed. At the end of the project it turned out that 5 FTE less personal was needed to run this process Figure-4: Account Payable Process (SOLL) Although during the analysis of the procurement process we found that there was an E- procurement system available, it turned out that this was not used in an optimal way. Mostly this was due to poor knowledge transfer from the initial system developers to the procurement employees during the implementation. Besides, different people who had to use the E-procurement system at the local sites were not trained well. They were not used to work with a system for placing orders and because of the lack of corporation between the sites and SSC, management at the different locations was not forcing their employees to work with the E-procurement system. Therefore a lot of maverick purchases took place, which caused a lot of control and correction activities in the procurement process (see figure 3). When the procurement process could be performed via the electronic catalogue of the E-procurement system, the process could be simplified (see figure 5). Figure-5: Procurement Process (SOLL) 11

12 While it is not always possible to execute the standard process, because there are often exceptions, we found during our analysis that realizing 60 to 70% of the instances using the standard process is possible. At the start of the project this was only 23%. We have also analysed available data about at different locations and interviewed 8 employees. Moreover we did a comparison analysis of the different sites. Based on the interviews and analysis we found that: Sites that use the E-procurement system and follow the procedures have often a central order function (one or two employees) at the site. The orders are collected and are placed via the E-procurement system by these employees. Sites that do not have a central order function, have a lot of people which are placing orders via , fax or phone by suppliers. This caused suppliers to send invoices to the SSC for very small order quantities. This in turn causes the amount of invoices to rise and thereby also the costs for the SSC and the local sites. The order function often consists of employees that have worked for the SSC. They have certain knowledge about procedures and systems. The commitment of the management at any particular site together with the management of the SSC is important to decrease maverick buying. The sites which follow the procedures and execute processes according the optimal way, are paying the same price per booked order and invoice as locations that don t follow the procedures. We advised to introduce an order function at all locations and organize training to the employees about systems and procedures. By encouraging sites to implement the standard processes, the prises per booked order and invoice could be decreased. This was done by starting pilot projects at locations that were lagging behind compared with others. Within six months the performance of these locations improved significantly. Also during the pilot project, the IT department improved the procurement functions (search, placement, standard orders etc.) based on the needs of the end users. Finally after a year a total of 3 FTE were saved in the execution of the procurement process. This was mainly because the procurement orders were placed more and more via the E- procurement system, which enables the execution of processes in a more efficient way. Also the total amount of invoices for the accounts payable department decreased drastically, this also saved nearly 3 FTE. As part of phase 5 of the BPR approach we recommended the codification knowledge management strategy because the SSC offers standardized and mature products/services and the employees rely on explicit knowledge to solve problems. Based on this decision the process models and descriptions were stored in a document management system. All employees have access to this models and descriptions while authorized employees can also make modifications. Finally our BPR method also advocates the creation of a management control system for the SSC. It is essential to choose the right control type that is aligned with the nature of the different functions. The types of control that are implemented have to encourage the employees to execute their operational tasks according to the best interest of the SSC. In this project it was decided to use a combination of action and result control for administrative employees. Because the actions 12

13 they have to take are formally described in process models and work instructions. There are standard processes developed to establish consistency across the department. Because there were no key performance indicators described and monitored by the supervisors of administrative employees, a KPI structure was designed and developed together with reporting tools to monitor the results. For example this helped the total amount of orders and invoices registered per employee to be monitored and improved if necessary. These efforts helped to create transparency in the work done per employee and this also resulted in the improvement of individual performances. For the team leaders the result control mechanism was implemented. The productivity of their department is monitored and discussed by the management to take corrective actions when necessary. So we can state that using the BPR method at the governmental shared service centre clearly improved their efficiency. 4. CONCLUSION Modern governmental SSC s have some innovative challenges. They have to keep in pace with the growing demands of their users for far more efficient service delivery. Therefore SSC s have to determine the most efficient and cost effective solution to their operational business processes. To achieve this it is very important to periodically analyze the business processes of a SSC and evaluate if it can be improved. In a project at a governmental SSC a newly developed BPR method consisting of EIA, BPM, Management Control and Knowledge Management techniques has been used in a very successful way to analyze and understand the operational business problems at the SSC. By using the enterprise information architecture as a starting point all relations and information exchange between the different stakeholders were clearly described. Thereby we took a different approach compared to more traditional methods, which (especially when it comes to automation) tend to have a main focus on the internal processes whereas our method aligns the processes and systems across the different participants that are involved. Besides this approach also includes management control mechanisms to ensure that the organizations strategy is in sync with its processes and activities performed by the employee s. Finally the importance of management control is emphasized and used to enable the continuous measuring and improving of the organizational performance and to realize governance. After using the BPR method for an improvement project the results were clearly positive. The total amount of FTE within the account payable department was reduced from 19 to 11 while the procurement process could be executed with 3FTE less than before. We expect that the efficiency of the business processes and the quality of service delivery can be further improved by implementing several more recommendations that were found during the project. However more time and financial investments will be needed. 5. DISCUSSION AND FURTHER RESEARCH This research project should be seen as explorative because the BPR approach is applied to improve the primary processes of just one single SSC. Therefore, we should be careful to generalize the results and findings of this investigation. Although the proposed BPR implementation approach worked in this particular SSC project further validation is necessary. We 13

14 suggest that more case studies are done to determine the applicability of the method for governmental organizations. Any experiences that are required from these studies can then be included into the BPR method. Also we should note that the organization in which the method is applied is relatively small so the scalability of the developed BPR method should be tested more thoroughly. Finally we want to study whether all phases in the BPR method are equally important. In this project no distinction in importance between the phases has been made or found, however this need not be the case in different situations and project. BIBLIOGRAPHY Aydinli, Ö.F., Brinkkemper, S., Ravesteyn, J.P.P. (2008), Business Process Improvement in Organizational Design of e-government Services, In D. Remenyi (Ed.), Proceedings of the 8th European Conference on e-government, pp Bandara, W., Gable, G.G., Rosemann, M. (2005), Factors and Measures of Business Process Modeling: Model Building Through a Multiple Case Study. European Journal of Information Systems, 14(4), pp Bergeron, B.P. (2003), Essentials of Shared Services. Hoboken, NJ: John Wiley & Sons. Burns, T.J., Yeaton, K.G. (2008), Success Factors for Implementing Shared Services in Government, Competition, Choice, and incentives Series, IBM Center for The Business of Government. Cooper, R., Kaplan, R.S. (1991), Profit Priorities From Activity- based Costing, Harvard Business Review. Farquhar, C.R., Fultz, J.M., Graham, A. (2006), Implementing Shared Services in the Public Sector: The Pillars For Succes, The Conference Board of Canada, Accenture, March, Ottawa. Fyfe, T. (2006), Finetuning Shared Services: It s a different road in the public sector, [Accessed ]. Garfield, S. (2006), Priorities for setting up a KM program, [Accessed ]. Goldratt, E.M. (1990). What is this thing called Theory of Constraints and how should it be implemented. [Croton-on-Hudson, NY]: North River Press. pp Hansen, M.T., Nohria, N., Tierney, T. (1999), What s your strategy for Knowledge Management, Harvard Business Review. Jashapara, A. (2004), Knowledge management: An integrated approach, First edition, Essex, Prentice Hall. Koning, H., Bos, R., Brinkkemper, S. (2008), A Lightweight Method for the Modelling of Enterprise Architectures Introduction and Usage Feedback. Proceedings of the 3th Workshop on Trends in Enterprise Architecture Research, Sydney, Australia, December, Merchant, K.A., van der Stede, W.A. (2003), Management Control Systems: Performance Measurement Evaluation and Incentives, First edition, Prentice Hall. Opheij, W., Willems, F. (2004), Shared Service Centers, balanceren tussen pracht & macht, Twynstra Gudde. Pande, P., Holpp, L. (2002), What is six sigma, McGraw-Hill Publishers. Purtell, K. (2005), Shared Service: A Benchmark Study, The Jhonsson Group. Rahman, A.A. (2005) Looking at shared services model for public sector. New Straits Times Press, Berhad Business Times, p. 7. Recker, J.C. (2006), Process Modeling in the 21st Century, BPTrends, pp

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