Resource‐based approach to IT shared services in a manufacturing firm

Purpose – Driven by cost reduction and improved quality of service, some firms have adopted shared services as a governance model to manage their staff functions. This paper seeks to explore this behavior using the resource‐based view. Design/methodology/approach – The case of an information technology (IT) unit of a multinational manufacturing firm is presented to provide insight into the issues involved when adopting and migrating an IT resource system to a shared services model. The analysis is extended using conceptual models of the relevant sub‐systems developed through the soft systems methodology (SSM), using a set of root level definitions that are intended to express the transformation to a shared services model. Findings – The results suggest that the major changes involved when transitioning to shared services are process and communication related. Aligning the team members and gaining their commitment are necessary for success. Practical implications – The case analysis and SSM models provide some insight into the important issues to be considered when moving to a shared services model. Originality/value – With the growing practice of shared services, it is important to understand how a shared services model fits successfully into the overall business strategy of the firm. This study will spawn further research into the evaluation and control techniques for the different types of IT capabilities under a shared services model.