4.2.3 Differentiation Between SSC And Outsourcing
4.2.3 Differentiation between SSC and Outsourcing
The ideas and objectives regarding the implementation of a SSC concept have several things in common with an outsourcing approach. However, there are various differences between both sourcing arrangements and it is necessary to clearly distinguish between them (Becker et al. 2008). First of all, the two constructs have a different strategic orientation. SSCs in the public sector are internally-oriented and emphasize the relationship between the business units and an individual service unit within one organization. In contrast, outsourcing is externally-oriented and deals with the link between an organization and its service provider (Janssen & Joha, 2006). In addition, the organizational possibilities of interference differ remarkably between the SSC and the outsourcing concept due to the corresponding ownership structure. Since the internal SSC is part of the corporation, the top management is still able to exert influence. This is not possible with regard to the decisions of the external service provider (Becker et al. 2008). Furthermore, the activities and processes which are adequate regarding both sourcing arrangements vary as well. Many organizations have reservations to outsource financial, customer or personnel data due to risks associated with availability, integrity and confidentiality issues (Janssen & Joha, 2006; Zehnder, Pampel & Friesen, 2007). Finally, risk management plays an important role. A SSC enables the individual business units of an organization to share all risks which are connected to the activities performed within …show more content…
As a result, four different areas of benefits can be identified, namely strategic/organizational, political, technical and economic advantages (Janssen & Joha,
The ideas and objectives regarding the implementation of a SSC concept have several things in common with an outsourcing approach. However, there are various differences between both sourcing arrangements and it is necessary to clearly distinguish between them (Becker et al. 2008). First of all, the two constructs have a different strategic orientation. SSCs in the public sector are internally-oriented and emphasize the relationship between the business units and an individual service unit within one organization. In contrast, outsourcing is externally-oriented and deals with the link between an organization and its service provider (Janssen & Joha, 2006). In addition, the organizational possibilities of interference differ remarkably between the SSC and the outsourcing concept due to the corresponding ownership structure. Since the internal SSC is part of the corporation, the top management is still able to exert influence. This is not possible with regard to the decisions of the external service provider (Becker et al. 2008). Furthermore, the activities and processes which are adequate regarding both sourcing arrangements vary as well. Many organizations have reservations to outsource financial, customer or personnel data due to risks associated with availability, integrity and confidentiality issues (Janssen & Joha, 2006; Zehnder, Pampel & Friesen, 2007). Finally, risk management plays an important role. A SSC enables the individual business units of an organization to share all risks which are connected to the activities performed within …show more content…
As a result, four different areas of benefits can be identified, namely strategic/organizational, political, technical and economic advantages (Janssen & Joha,