Chapter 8 Value Creation by Transactional Shared Service Centers: Mapping Capabilities

Purpose The purpose of this chapter is to introduce the capability map that addresses the potential of transactional Shared Service Centers (SSCs). The mapping approach represents a heuristic logic that provides means for analyzing SSC operation, connects SSCs capabilities with their value, and supports academics and practitioners in developing a transactional SSC that is of strategic importance. Design/methodology/approach This chapter reports on findings from a longitudinal case study within an organization that has implemented a transactional Human Resource (HR) SSC. Over a period of three years, several formal and informal meetings were attended, more than 20 interviews were conducted with SSC MT and customers, over 500 pages of project documentation and memos were studied, which allowed after integration for an in-depth analysis of how resources are bundled to build different types of capabilities. Findings We uncovered and mapped the operational and dynamic capabilities of a transactional SSC, their role in value creation, and their interdependencies. While the operational capabilities enable the HR SSC to provide day-to-day services to take care of individual end-users and support the business, the dynamic capabilities enable transformation of HR delivery throughout the organization and increase HR’s strategic contribution. Research limitations/implications One limitation of this study is the extent to which the capabilities and their role in value creation are generalizable to transactional non-HR SSCs. SSCs providing services that cover other business functions might develop and deploy different capabilities. The use of a capability map is not limited to the capabilities uncovered in this study, however. Originality/value In the literature, the primary focus regarding transactional services is limited to cost savings and efficiency. This chapter addresses the potential of the transactional SSC and introduces the capability map as a tool to leverage its potential.