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Prelims

Paweł Modrzyéski (UTP University of Science and Technology, Poland)

Local Government Shared Services Centers: Management and Organizations

ISBN: 978-1-83982-261-2, eISBN: 978-1-83982-258-2

Publication date: 12 August 2020

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Citation

Modrzyéski, P. (2020), "Prelims", Local Government Shared Services Centers: Management and Organizations, Emerald Publishing Limited, Leeds, pp. i-xxiv. https://doi.org/10.1108/978-1-83982-258-220201007

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Emerald Publishing Limited

Copyright © 2020 Paweł Modrzyéski

Half Title

Local Government Shared Services Centers

Praise for Local Government Shared Services Centers: Management and Organization

“An excellent guide to the process of efficient and safe creation of shared service centers in local government structures.”

Robert Karaszewski, Head of the Business Excellence Department, Faculty of Economic Sciences and Management, Nicolaus Copernicus University in Toruń, Poland

“A must-read for all interested parties, in particular the management bodies of local government units, SSCs directors, auditors and public sector specialists.”

Alicja K. Reuben, Department of Economics, New York University, Abu Dhabi

“The author not only has significant scientific achievements… but also has extensive professional experience covering the management of [shared services] units, their organization and creation, as well as auditing.”

Roberta Pellegrino, Department of Mechanics, Mathematics and Management, Politecnico di Bari, Italy

Title Page

Local Government Shared Services Centers: Management and Organizations

Paweł Modrzyéski

UTP University of Science and Technology, Poland

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2020

© 2020 Paweł Modrzyn´ski. Published under exclusive licence by Emerald Publishing Limited.

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No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-83982-261-2 (Print)

ISBN: 978-1-83982-258-2 (Online)

ISBN: 978-1-83982-260-5 (Epub)

Dedication Page

“To my wife Asia, for help, valuable comments and patience.”

Contents

List of Figures XI
List of Tables XVII
List of Diagrams XIX
Author Biography XXIII
Introduction 1
1. Idea and Purpose of Creating a Shared Services Center 7
 1.1. Evolution of Organizational Structures and Organizational Management Models 7
 1.2. Definition of a SSC 20
 1.3. Centralization, Outsourcing and Shared Services 43
2. Development of the Shared Services Market 51
 2.1. The Essence of SSC 52
 2.2. The Reasons to Create SSC 57
 2.3. Before SSC Creation 67
 2.4. How Shared Services are Delivered 76
 2.5. Benefits of SSC Establishing 81
 2.6. Disadvantages of SSC Establishing 84
 2.7. Future of Shared Services 86
3. Development of the Market of Shared Services in the Local Government Sector in Poland 91
 3.1. The Idea of Creating Self-government Centers for Shared Services in Poland 91
 3.2. Forms of Organization of Processes and Tasks Provided by Self-governments in Poland 97
 3.2.1. Communes 98
 3.2.2. Districts 100
 3.2.3. Provinces 101
4. Benefits and Threats to the Implementation of the Shared Service Market Model in Local Governments 117
 4.1. Organization of SSCs 117
 4.2. Determining the Scope of Subjective and Objective Activities of the SSC 128
 4.3. The Analysis of Organizational Models and the Design of Provided Processes 136
 4.4. Human Resource Management 143
 4.5. Implementation Schedule for SSC 154
 4.6. The Efficiency of the Processes 162
 4.7. Risk of SSCs and Ongoing Processes 172
5. Use of IT Infrastructure by Self-government Shared Service Centers 183
 5.1. Electronic Document Workflow 183
 5.2. The Process of Implementing Electronic Document Workflow and a Rugged Medium in the TSSC 194
 5.3. Process Safety – Blockchain Technologies 200
Summary 211
Bibliography 215
Articles 215
Books 221
Internet Recourses 222
Law Regulations 226
Post-conference Materials 228
Index 229

List of Figures

Fig. 1. The Basic B-form 9
Fig. 2. Organization Design Options 12
Fig. 3. Integrating, Disintegrating and Sharing Modules in a SOE 45
Fig. 4. Evolution Toward SSO and SOE 47
Fig. 5. A Continuum of Approaches and Governance Modes 49
Fig. 6. Will Shared Service Strategy Deliver Increased Value to the Organization? 55
Fig. 7. Which of these Trends will Radically Impact the Value that your Shared Services Provide to the Organization in the Next Two Years? 62
Fig. 8. Most Popular Automation Solutions 63
Fig. 9. Which of the following Functions Are Performed Via Shared Services in Your Organization – Including Both Transactional and Knowledge based Centers (COEs)? 66
Fig. 10. Top 10 SSC Locations 72
Fig. 11. Top Five SSC Locations From the Largest Companies ($>25B) 73
Fig. 12. Gross Domestic Product Per Capita 2003–2018 in EU 2873
Fig. 13. The Best Location for SSCs in Poland 74
Fig. 14. How Do You Attract and Retain Talent, and What Non-traditional Talent Models Have You Considered? 75
Fig. 15. Which Key Skills Do You Need More Within Your SSO, to Deliver More Value? 76
Fig. 16. What is the Headcount Reduction and Payback Period Experienced as a Result of Shared Services? 83
Fig. 17. What Has Been the Average Annual Productivity Improvement Achieved by Your Organization’s SSCs? 84
Fig. 18. How Do You Use the Savings Generated by SSC Productivity Improvements? 85
Fig. 19. How Do You Expect Your Organization to Change Its Use of Shared Services in the Next 3–5 Years? 87
Fig. 20. In Which Areas Is Your Organization Expected to Reduce Usage of Shared Services in the Next 3–5 Years? 88
Fig. 21. What Kind of Problem Occurred During the Implementation Process? Average Mark According to the Respondents Replies (Scale 1–5) 108
Fig. 22. What Was the Process of Creating SSC? 108
Fig. 23. How Have the SSCs Been Created? 109
Fig. 24. What Kind of Back-Office Processes Are Covered by SSC? 109
Fig. 25. What Types of Units Are Supported by SSC? 110
Fig. 26. What Types of Local Units Would Like to Support by SSC Services? 110
Fig. 27. What Kind of Services Could SSCs Provide If You Decided to Establish Them? 111
Fig. 28. Why Did You Resign to Implement SSC in Your Country? Average Mark According to Respondent Replies (Scale 1–5) 112
Fig. 29. Are You Going to Establish SSC in the Future? 113
Fig. 30. Number of Units Supported by the GSSC (Cumulatively) 120
Fig. 31. Subjective Structure of Units Supported by the ESSC 124
Fig. 32. Subjective Structure of Units Supported by the ESSC – By Number of Employees (Posts) 125
Fig. 33. Subjective Structure of Units Supported by the ESSC – By Number of Students and Children in Units 125
Fig. 34. Subjective Structure of Units Supported by the ESSC – By Number of Accounting Documents 126
Fig. 35. The Number of Accounting Processes Conducted in Education Units Within a Shared Service on Annual Basis 138
Fig. 36. Payment Structure of Purchase Invoices for Units Operated by ESSC. Data from 2019139
Fig. 37. Invoice Analysis – Turnover Comparison of a Sample Unit Supported by the TSSC With a Specific Contractor. Data from 2017141
Fig. 38. Average Professional Experience Level of a Group of Accounting and Payroll Division Employees of Particular Types of Units Supported with a Shared Service Who Have Been Transferred to Work in the ESSC 145
Fig. 39. Structure of Administrative Staff Training in Units Supported With a Shared Service Before Commencing ESSC Operations. Cumulative Data for 2016–2018 Period 146
Fig. 40. Structure of Administrative Staff Training in Units Supported With a Shared Service and ESSC Employees. Cumulative Data for 2016–2018 Period 147
Fig. 41. Structure of Aadministrative Staff Training Needs in Units Supported with a Shared Service Before Commencing ESSC Operations 148
Fig. 42. Structure of Administrative Staff Training Needs in Units Supported With a Shared Service and ESSC Employees 148
Fig. 43. Assessment of the Legitimacy of SSC Implementation in Local Government Structures According to the Assessment of Supported Unit Managers 149
Fig. 44. SSCs Managerial Staff Work Experience 150
Fig. 45. SSCs Managerial Staff Work Experience – Work Experience Measures 151
Fig. 46. SSCs Managerial Staff Work Experience – The Subjective Scope 151
Fig. 47. Researched Manager Requirements for Additional Trainings and Courses 152
Fig. 48. Supporters and Opponents of SSC Creation According to Their Professional Experience – Cumulatively 153
Fig. 49. Supporters and Opponents of Establishing SSCs According to Work Experience in the Unit Executives – Collectively 154
Fig. 50. Main Objectives in the Process of Establishing SSCs (Supported unit Treasurer Evaluation – A Roadmap and its Execution) 156
Fig. 51. Objectives of Creating local Government SSCs in New South Wales 157
Fig. 52. Threats Related to the Process of Establishing SSCs – Executives of the Supported Unit Evaluation (On a Scale from 1 – Risk Irrelevant to 5 – Risk Relevant) 174
Fig. 53. Risks Related to Establishing SSCs – Unit Executive Evaluation According to Their Work Experience (SSCs Supporters) 175
Fig. 54. Risks Related to Establishing SSCs – Unit Executive Evaluation According to Their Managerial Experience (SSCs Supporters) 175
Fig. 55. Risks Related to Establishing SSCs – Unit Executive Evaluation According to Their Work Experience (SSCs Opponents) 176
Fig. 56. Risks Related to Establishing SSCs – Unit Executive Evaluation According to Their Managerial Experience (SSCs Opponents) 176
Fig. 57. Main Barriers and Problems Occurring in the Process of Establishing SSCs (Evaluation of Supported Unit Executives) 177
Fig. 58. Main Barriers and Problems Occurring in the Process of Establishing SSCs (Evaluation of Supported Unit Treasurers) 178
Fig. 59. Presentation of Study Results Related to the Knowledge of the Electronic Signature Among Managers of Units Supported by the TSSC 195
Fig. 60. Advantages of Introducing Electronic Signature in the TSSC (Response Scale From 1 to 10) 196
Fig. 61. Diagnosed Problems of Electronic Signature Implementation in TSSC (Response Scale From 1 to 10) 197
Fig. 62. Number of Documents in Electronic Workflow in TSSC in 2018198
Fig. 63. Views of Blockchain’s Relevance Within Organizations (2019 vs. 2018) 203
Fig. 64. Survey Respondents Attitudes on Blockchain and its Adoption (2019 vs. 2018) 204
Fig. 65. Organizational Barriers to Greater Investment in Blockchain Technology (2019 vs. 2018)205

List of Tables

Table 1. Features of the New Public Management 15
Table 2. Characteristics of NPM and Theoretical Approaches 18
Table 3. The Evolution of the Types of Accounting SSCs Planned and/or Implemented in Estonia 32
Table 4. Comparison Between NPM and NPG Paradigms 35
Table 5. Main Characteristics of the Three Models of Shared Services 37
Table 6. The Way the Factors Influence the Degree of Customization of the Shared Services Business Model in the Three Case Studies 43
Table 7. Comparison of the Various Attributes of a SSC or Outsourced Model to Centralization 49
Table 8. The Differences Between Shared Services and Centralization Model 54
Table 9. Success Factors of SLAs Agreements 80
Table 10. Example Process Matrix of Supported Units 127
Table 11. Planned Schedule for Establishing an SSC in Elbla˛g 160
Table 12. Employment in the SSC in Ustron´ and Units Supported With a Shared Service 165
Table 13. Performance Indicators of SSC in Ustron´ 166
Table 14. Performance Indicators for Selected Local Government SSCs 166
Table 15. Performance Indicator of the SSC Payroll Division in Ustron´ 168
Table 16. Calculation of the Number of SSC Posts in Ustron´ based on Performance Indicators for Selected Local Government SSCs in Poland 169
Table 17. Example of a Workflow Procedure for an Invoice Document 189
Table 18. Example of a Workflow Procedure for Payroll 190

List of Diagrams

Diagram 1. Key Issues of SSCs 56
Diagram 2. Organization Paths of Shared Services 57
Diagram 3. The Value Measurement Methods of Shared Services Delivered by SSC 58
Diagram 4. The Value of Shared Services 59
Diagram 5. Resons for SSC Establishment 64
Diagram 6. Complexity and Level of Sophistication of Shared Services 65
Diagram 7. Main Principles and Key Drivers of Successful SSC 68
Diagram 8. Radical Performance Drivers of Designing SSCs 69
Diagram 9. Top Factors of Critical Metrics Service Delivery 69
Diagram 10. Key Design Factors of SSC 70
Diagram 11. Key Elements of the SSC Building Process 71
Diagram 12. Key Drivers in Optimization Process 77
Diagram 13. Shared Services Design and Delivery Process 79
Diagram 14. Key Tasks of SSCs and Serviced Units Managers 79
Diagram 15. Stages of SSC Maturity 81
Diagram 16. Catalog of Benefits for SSC Creation 96
Diagram 17. Catalog of Commune Entities That May Be Covered by the Shared Service Provided by SSCs 98
Diagram 18. Catalog of Administrative and Legal Forms of Entities That Provide Shared Services in a Commune 99
Diagram 19. Catalog of District Entities That May Be Covered by the Shared Service Provided by SSCs 100
Diagram 20. Catalog of Administrative and Legal Forms of Entities That Provide Shared Services in a District 101
Diagram 21. Catalog of Province Self-governments That May Be Covered by the Chared Service Provided by SSCs 102
Diagram 22. Catalog of Administrative and Legal Forms of Entities That Provide Shared Services in a Province 103
Diagram 23. Variants of Centralization of VAT Tax Return Submission in Commune Where SSCs were Established 105
Diagram 24. Evolution of SSC Administrative Structure After Process Standardization and Launching Job Classification 143
Diagram 25. Example Schedule of SSC Implementation in a Local Government 160
Diagram 26. SSC Informal Administrative Structure in Ustron´ (October 2019) 164
Diagram 27. Performance Indicators for Selected Local Government SSCs 167
Diagram 28. SSC Management Control 179
Diagram 29. SSC Management Control System 181
Diagram 30. Example for Financial and Accounting Information and Document Workflow Between a Supported Unit and the SSC (Public Sector) 186
Diagram 31. Example for Human Resource and Payroll Document Workflow between Supported Educational Units and SSCs (Public Sector) 187
Diagram 32. How a Blockchain Works 202
Diagram 33. There Are Six Distinct Categories of Blockchain Use Cases Addressing Two Major Needs – Storage and Registry of Information 202

Author Biography

Paweł Modrzyn´ski, PhD

A graduate of the Faculty of Management and Economic Sciences at the Nicolaus Copernicus University in Torun´, where he received his Ph.D. in economic sciences, and the Dominican University (USA), where he completed postgraduate MBA studies. He completed postgraduate studies in accounting at the Nicolaus Copernicus University in Torun´ and holds the Chief Accountant qualifications issued by the Association of Accountants in Poland. He is also entitled to be a Member of Supervisory Boards of state-owned companies.

Academic staff member of the Finance Department, Management Department, and the Financial Auditor of the Jan and Jędrzej Śniadecki UTP University of Science and Technology in Bydgoszcz. Author of many publications concerning public management, higher education financing and public finance. For several years he has specialized in the organization, management and audit of Shared Service Centers (SSC). The author of several scientific and industry publications as well as reports and monographs on the management and organization of local government SSCs in Poland. Permanent columnist of the largest periodical in Poland devoted to local government issues – Wspólnota Samorządowa (Local Government Community). As an Expert and Panelist, he participated in many national and international conferences on public sector unit management and shared service market. He is experienced in creating and managing local government SSCs in Poland. He is the Originator and responsible for pioneering implementation of Blockchain technology in public sector the Torun´ SSC, and received awards at the Smart City conference in Warsaw in 2019. As a professional, he is also involved in self-governing SSC audits and provides training for management and staff of these units.

The author’s rich, over 20-year professional and managerial experience is related to the broadly understood public sector and includes, for example, serving the role of the Chancellor of the Nicolaus Copernicus University in Torun´ and the Cracow University of Technology as well as the Director of the Department of Innovation and Development at the Ministry of Science and Higher Education in Warsaw. Professional experience also includes exercising ownership supervision in commercial law companies and sitting in supervisory boards, as well as being an expert in the European Committee of the Regions in Brussels and active participation in the Monitoring Committees for the organization and supervision of national EU programs under the 2004–2006 and 2007–2013 budget perspective for the Kujawsko-Pomorskie province.

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