The doctoral thesis stemmed from the international research project COCOPS (Coordinating for Cohesion in the Public Sector of the Future) funded from the 7th Framework Programme of the European Union. In the framework of the project, scientists from different countries investigated current practices used in public administration and the lessons that can be learnt from these practices (see cocops.eu).
In Estonia, one of the most important practices over the past few years has been the consolidation of support services into the State Shared Service Centre. The aim of the thesis was to study how the reform was initiated and what other countries can learn from Estonia’s experience. The research focused in particular on reorganizations in public sector accounting.
The supervisor of the doctoral thesis, Professor Ringa Raudla says, “As is the case with public sector reforms in general, we can see alternating centralization and decentralization cycles in how accounting is arranged. In contrast to centralized accounting in Soviet times, the financial accounting of the public sector was decentralized after Estonia regained its independence. The consolidation of accounting into a state shared service centre essentially means that the pendulum is swinging towards centralization again. We are interested in why and how the pendulum changes direction.”
The growing number of public sector shared service centers has attracted practitioners’ as well as scholars’ attention. In the professional literature “a shared service centre” refers to a novel model distinguished from traditional organizational structures, which allows simultaneous cost savings and the improvement of quality.
Professor Raudla says, “The expectations of this model are, on the one hand, based on the classical insight from economics, according to which a shared service center should help to achieve economies of scale. By harmonizing and consolidating the support functions of different authorities, the functions can be provided as a “service”, which relieves the authorities using the service (i.e., the “customers”) from the obligation to develop the support functions independently. On the other hand, a very important feature of a shared service centre is a customer focus, which should ensure that services are provided in compliance with the customer’s needs.”
Although cost savings is the main reason for creating shared service centers, it is still not clear whether and how the transition to shared service centers helps to reduce administrative costs. The analysis of the Estonian case demonstrates that a shared service center was not created on the basis of its original theoretical model, which is why it may fail to meet the expectations placed on it. The case of Estonia is not unique and researchers from other countries have pointed out the same problem. The ones who wish to learn from Estonia’s experience must take into account that various strategies can be applied in creating shared service centers and that it may be difficult or impossible to apply strategies that work well in Estonia to another country.
The supervisor of the doctoral thesis was Ringa Raudla, Professor at the Ragnar Nurkse Department of Innovation and Governance, email@example.com
The opponents were Professor Penelope Tuck (Birmingham Business School, United Kingdom) and Professor Koen Verhoest (University of Antwerp, Belgium)
The doctoral thesis has been published in the digital collection of TTÜ library: https://digi.lib.ttu.ee/i/?7400