BINDURA UNIVERSITY OF SCIENCE EDUCATION

FACULTY OF COMMERCE

DEPARTMENT OF ACCOUNTANCY

UTILIZATION OF SERVICE CENTRES AS A COST REDUCTION

TECHNIQUE: A CASE STUDY OF KUSHINGA PHIKELELA
POLYTECHNIC

BY
B1439176

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE BACHELOR OF
ACCOUNTANCY (HONOURS) DEGREE OF BINDURA
UNIVERSITY OF SCIENCE EDUCATION

JUNE 2017

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 RELEASE FORM

Name of author: B1439176

Title of project: utilization of service centres as a cost reduction technique: a case study of
Kushinga Phikelela Polytechnic

Programme: Bachelor of Accountancy Honours Degree

Year granted: 2017

Permission is hereby granted to Bindura University of Science Education library to produce

single copies of this project and to lend or sell such copies for private, scholarly or scientific
research purposes only. The author reserves other publication rights, and the project or
extensive extracts from it may not be printed or otherwise reproduced without the author `s
written permission.

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Permanent address

15296 new zengeza 4

Chitungwiza

Harare

Date ……………………………………..

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 APPROVAL FORM

The undersigned certify that they have read and recommended to Bindura University of
Science Education for acceptance, a project entitled “utilization of service centres as a cost
reduction technique: a case study of Kushinga Phikelela Polytechnic”, submitted by
B1439176 in partial fulfilment of the requirements for the Bachelor of Accountancy
Honours Degree.

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SUDENT DATE

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SUPERVISOR DATE

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 DECLARATION OF AUTHORSHIP

I, B1439176, declare that this research project herein is my original work and has not been
copied or extracted from previous source without due acknowledgement of the source.

………………………………… ……………..............…...
Signature Date

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 DEDICATION

Firstly wish to dedicate this piece of work to the Almighty God who held my hand
throughout the course of this research and the whole duration of the degree. Secondly i want
to dedicate this project to my wife Rachel and son Tapuwanashe who are an inspiration to
me and give me a reason to keep the hope alive. Lastly i want to dedicate this work to my
family and more specifically my mother, whose academic achievements i inspire to emulate
and whose intelligence i believe reflects in me.

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 ABSTRACT

Despite the use of service centres at KPP, there are indications that quality of service and
operational efficiency continue to fall thus threatening the relevance and usefulness of
service centres. The research intended to determine whether service centres have achieved
their intended purpose and whether or not the institution should continue utilizing service
centres. The research design used was the case study approach. The target population was
30 employees from the departments housing the service centres. The sample size was 18
employees who were selected using convenience and quota sampling methods. The sample
consisted 2 employees from the 8 departments housing service centres and 2 heads of the
divisions of service centres. Data was collected using a combination of questionnaires,
interviews and observations and presentation was mainly in the form of tables, pie charts
and graphs. Data collected also included secondary data in the form on annual financial
accounts. Data analysis was achieved through comparison of results, with findings of
related empirical studies. The major findings were that the purpose of employing SCs at the
institution includes cost reduction and quality enhancement. The major benefits of using
service centres are not being fully realized at KPP. The main factors hindering service
centres were the harsh economic conditions and, the rigidity and bureaucracy in
government policy. The main challenges encountered include lack of flexibility,
complexity of the system and resistance to change. Best practices are not being employed
in the implementation of SCs. The research recommended the formulation, implementation
and control of policy governing the function of service centres, and the adoption of best
practices in the service centres. Other recommendations made include continuous review
of systems, cooperation, adoption of a performance evaluation system for the service
centres and according significant level of autonomy to the service centres.

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 ACKNOWLEDGEMENTS

First and foremost, i acknowledge the hand of the almighty in every success story of my
life including this research. My sincere profound thanks unconditionally go to my
supervisor. His unwavering patience, professional advice, guidance and astounding
capacity for creative work, made this study a success. I also want to acknowledge the team
work and oneness of the accountancy class of 2014, their comradeship has immensely
contributed to the success of this learning outcome. Great appreciation and thanks also to
the vice principal of Kushinga Phikelela Polytechnic for his amazing effort and facilitating
of all the research work i carried out at his institution. Finally i want to acknowledge the
men and women of the discussion group to which i belonged, they went out of their way to
support me and other fellow group members. I truly wish this now ending learning process
was a permanent feature of my life because of the good relationships i have developed with
my fellow group members, we had grown into a special form of a family structure.

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 TABLE OF CONTENTS

RELEASE FORM ................................................................................................................ii

APPROVAL FORM ...........................................................................................................iii
DECLARATION OF AUTHORSHIP ................................................................................ iv
DEDICATION ..................................................................................................................... v
ABSTRACT ........................................................................................................................ vi
ACKNOWLEDGEMENTS ...............................................................................................vii
TABLE OF CONTENTS ..................................................................................................viii
LIST OF TABLES .............................................................................................................. xi
LIST OF FIGURES............................................................................................................xii
CHAPTER I ......................................................................................................................... 1
INTRODUCTION................................................................................................................ 1
1.0 Introduction ................................................................................................................ 1
1.1 Background of the study............................................................................................. 1
1.2 Statement of the problem............................................................................................ 3
1.3 Research objectives .................................................................................................... 3
1.4 Research questions ..................................................................................................... 3
1.5 Importance of the study .............................................................................................. 4
1.6 Assumptions ............................................................................................................... 4
1.7 Delimitations of the study .......................................................................................... 4
1.8 Limitations of the study .............................................................................................. 5
1.9 Definition of terms and abbreviations ........................................................................ 5
1.10 Summary................................................................................................................... 5
CHAPTER II ........................................................................................................................ 6
LITERATURE RIVIEW ...................................................................................................... 6
2.0 Introduction ................................................................................................................ 6
2.1 The nature of service centres ...................................................................................... 6
2.2 Benefits of service centres ........................................................................................ 11
2.3 Factors promoting or hindering service centres ....................................................... 13

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 2.4 Challenges in implementing service centres ............................................................ 15
2.5 Best practices in utilization of service centres ......................................................... 18
2.6 Empirical evidence ................................................................................................... 20
2.7 Gap analysis.............................................................................................................. 24
CHAPTER III..................................................................................................................... 25
RESEARCH METHODOLOGY ....................................................................................... 25
3.0 Introduction .............................................................................................................. 25
3.1 Research design ........................................................................................................ 25
3.2 Data sources.............................................................................................................. 26
3.3 Population ................................................................................................................. 26
3.4 Sampling ................................................................................................................... 27
3.5 Data collection techniques ........................................................................................ 28
3.6 Data collection procedures ....................................................................................... 30
3.7 Reliability and validity ............................................................................................. 31
3.8 Data presentation and analysis ................................................................................. 31
3.9 Summary................................................................................................................... 31
CHAPTER IV .................................................................................................................... 32
DATA PRESENTATION AND ANALYSIS ................................................................... 32
4.0 Introduction .............................................................................................................. 32
4.1 Data response rate analysis ....................................................................................... 32
4.2 Primary data presentation and analysis .................................................................... 33
4.2.1 Purpose of service centres.................................................................................. 33
4.2.2 Benefits of using service centres ....................................................................... 35
4.2.3 Factors promoting or hindering service centres ................................................. 36
4.2.4 Challenges in implementation of SCs. ............................................................... 37
4.2.5 Best practices in the implementation of SCs. .................................................... 39
4.2.6 Recommendations from respondents ................................................................. 41
4.2.7 Other background information........................................................................... 43
4.3 Secondary data analysis ............................................................................................ 45
4.4 Chapter Summary ..................................................................................................... 48
CHAPTER V ...................................................................................................................... 49

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SUMMARY, CONCLUSIONS AND RECOMENDATIONS ......................................... 49
5.0 Introduction .............................................................................................................. 49
5.1 Summary of findings ................................................................................................ 49
5.2 Conclusions .............................................................................................................. 52
5.3 Recommendations .................................................................................................... 53
5.4 Areas for further research ......................................................................................... 55
5.5 chapter summary ...................................................................................................... 56
REFERENCES ................................................................................................................... 57
APPENDIX A .................................................................................................................... 61
APPENDIX B .................................................................................................................... 66
APPENDIX C .................................................................................................................... 67

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 LIST OF TABLES

Table 4.1 : Questionnaire response rate and interview success rate.................................. 32

Table 4.2 : Responses to reasons for using SCs ................................................................ 33
Table 4.3 : Responses to impact of SCs on lead purposes ................................................ 34
Table 4.4 : Responses to benefits of using SCs ................................................................. 35
Table 4.5 : Responses to challenges in the implementation of SCs .................................. 38
Table 4.6 : Responses to use of best practices in SCs ....................................................... 40
Table 4.7 : Trial balance extracts comparative schedule ................................................... 46

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 LIST OF FIGURES

Figure 4.1 : Recommendations to continue using SCs...................................................... 41

Figure 4.2 : Responses to years of experience .................................................................. 43
Figure 4.3 : Responses to level of educational qualification held ..................................... 44
Figure 4.4 : Responses to level of management qualification........................................... 45

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 CHAPTER I

INTRODUCTION

1.0 Introduction
In this chapter the researcher covers the background of the study, statement of the problem,
objectives, research questions, hypothesis and assumptions. The chapter also covers the
significance of the study, limitations, delimitations and definition of terms.

1.1 Background of the study

Kushinga Phikelela Polytechnic (KPP) was originally established as a school of
stenography which was officially opened on the 28th of March in 1985 by the then president
of Zimbabwe Honourable C.S. Banana. It was later transformed into the current Kushunga
Phikelela Polytechnic. The polytechnic is located in Marondera. KPP is headed by a
principal who is deputised by a vice principal. Service centres are found mainly in the
support departments and technical division. The institution has a setup which facilitates the
provision of services by some academic departments to the whole organization, in areas of
specialization of the respective departments. The office of the vice principal heads four
departments, all of which are shared service centres, which are accounts, information
technology, administration and human resources. The technical division has four academic
departments, all but one provide services to the institution in their area of specialisation in
line with the productivity policy of the institution. These departments are construction and
engineering, applied sciences and applied arts.

The practice of concentrating shared services into one department which then specializes
in providing that service to the rest of the organization is driven mainly by the cost saving
and quality improvement motives, since the 1990s, shared services have been normally
used by government organizations to help improve service delivery and reduce costs
(Microsoft, 2016).

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Concerning the cost saving potential, many studies indicate the theoretical saving potential
of moving to shared services to be on a level of 15-40% (Wyman, 2007; Deloitte, 2007).
Bangemann (2005) identified four core elements of shared services which include cost
leadership, which emphasises optimization of costs by maintaining a balance between costs
and level of service.

The importance of pursuing cost saving cannot be over emphasized. According to the
Higher Education Strategy Group (2011) commonly known as the Hunt Report, shared
service centres are an important area for the higher education sector and the systematic use
of shared service centres could help improve efficiency and reduce costs. A report by
Deloite & Touché (2015) said the use of shared services arise from a financial or economic
need to reduce costs and improve efficiency. Despite the use of service centres at KPP there
are signs that cost savings, efficiency and quality have not been fully achieved. Several
signs of lake of cost efficiency, which are lead causes of poor services, have been seen.

The institution has construction projects of new learning premises that have been suspended
and no work is being done for over a year. The condition of some infrastructure is
deteriorating with no maintenance being made by the in-house service centres. The catering
services are providing food that, in some instances, do not meet market standards and this
result with less demand for the catering services. The corporate wear provided by the
applied arts in some situations do not meet specific safety needs of specialist departments,
for example metal work personnel require clothes that protect from fire and physical
injuries. These problems suggest that the service centres are not fully performing their
intended purpose as to expectation. Slow requisition processing in the procurement section
and unclear oversight over employee supervision are also key concerns.

It is not clear whether or not service centres are the best means of providing the shared
services, pursuing quality improvement and cost saving since they are coexisting with an
environment marred with poor operational efficiency and poor quality of service. The
researcher intends to fill the gap by carrying out the research on the use of service centres
as means of cost reduction, to determine whether or not service centres, in their pursuit of
cost reduction, have achieve their intended purpose and function and should they continue
being used by KPP.

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1.2 Statement of the problem

In modern cost management practices, the use of shared service centres has become
prevalent with the main priority being cost reduction and improving quality of service,
amongst other factors. Despite the use of service centres at KPP, there are indications that
quality of service and operational efficiency continue to fall thereby threatening the
appropriateness and usefulness of service centres. The pursuit of cost savings seems to be
to the detriment of delivery of service by the service centres. Some key indicators of decline
in quality of service and lack of operational efficiency can be seen in the sub-standard
services provided by the service centres which include lack of website for the institution,
uncompleted construction projects, inefficiencies within procurement and poor personnel
management practices. The pursuit of cost saving through the use of service centres seems
to be undermining the actual delivery of service by the service centres. The researcher
intends to determine whether the shared service centres have achieved their intended
purpose and whether or not the institution should continue utilising service centres.

1.3 Research objectives

1. To review the nature and purpose of service centres at KPP.
2. To identify benefits of utilizing service centres at KPP.
3. To expose factors promoting or hindering the effective use of service centres at KPP.
4. To identify challenges being faced by KPP in the use of service centres.
5. To review the best practices being adopted in the utilization of service centres by KPP.

1.4 Research questions

1. What is the nature and purpose of service centres at KPP?
2. What are the benefits derived from using service centres at KPP?
3. What are the factors that promote or hinder use of service centres at KPP?
4. What challenges does KPP face in the use of service centres?
5. What are the best practices used in the utilization of service centres at KPP?

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1.5 Importance of the study
To the researcher

The research will help the researcher in getting a deeper and better understanding on the
utilisation of service centres. The researcher expect to attain a greater appreciation SCs as
a tool for cost management. The researcher, if successful, will be awarded a degree.

To fellow students

The study gives a platform for future scholars who are eager to do more research on this
subject. This study will also help the Bindura university of Science Education students to
bridge the gap between the previous studies and current research in the area of SCs.

To the institution

The findings of the research can be used by KPP in deciding whether or not to continue
using service centres as a means of service delivery. If approved, the research will add to
the academic knowledge that exists on service centres. The research will also prescribe best
practices that can be adopted by the institution to ensure operational efficiency of SCs.

1.6 Assumptions
 All respondents would take reasonable time to contribute to the subject matter.

 True and accurate data will be supplied and will be readily available for the research.

 Respondents will give truthful responses that will facilitate reasonable inference and
deductions.

1.7 Delimitations of the study

The study focused on a single institution as a case study, KPP, and within the institution
focus was on those departments that house service centres. The study focused on the present
state of affairs with regards to use of service centres at KPP and the attention to past events
and historical information was limited. The researcher used secondary information dating
back to 2014 thus the time frame covered is of three (3) years from 2014 to 2016.

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1.8 Limitations of the study
 The time available to conduct the research was insufficient to allow gathering of
information adequate to put together a very comprehensive research. The researcher
how ever put in extra hours each day to achieve good results.
 Employees of the KPP may find it difficult to release certain information. The
researcher however use good rapport to neutralize this challenge.
 Because the research data was collected using certain sampling methods this means
there is risk that accuracy of data collected may be affected by the method used. The
use of triangulation was used to counter this challenge and increase validity.
 The size of the sample will be limited due to financial challenges and time available.

1.9 Definition of terms and abbreviations

KPP: Kushinga Phikelela Polytechnic

SC: Service centre
Service centre: Bangemann (2005) said a shared service centre is a unit with consolidated
and dedicated resources which provides process based or knowledge based services to
several entities, it operates as a business unit within the organisation structure and focuses
on internal customers.

Operational efficiency: achieving the intended outcome of a process or activity (operation)

using minimum possible resources (time, inputs etc.) i.e. achieving optimum output.

1.10 Summary
The chapter has introduced the research topic and has highlighted the background to the
research question. It has laid down the foundation for the literature review and the chapters
that come afterwards. In the next chapter the researcher reviewed the literature for the
relevant theoretical and empirical work on service centres. A review of the findings from
previous related researches will be carried out in the next chapter.

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 CHAPTER II

LITERATURE RIVIEW

2.0 Introduction
In this chapter the researcher reviews related literature and existing knowledge in the area
of service centres, the author reviews the opinions of other writers and experts in the subject
of service centres. Some of the major issues looked at are the nature of SCs, benefits of
using SCs, challenges and best practices in use of SCs. This chapter also looks at previous
studies in the area of SCs.

Theoretical framework
2.1 The nature of service centres

The concept of service centres was developed with the primary aim of achieving cost
reduction and quality of service. The need for service centres arose from the thinking that
for functions that are consumed by various departments of an organisation, it is not strategic
to have each department provide that function for itself (Schulman et al, 1999). It is better
to have these functions pooled and concentrated to form another separate department that
then becomes a support department responsible for providing a specific function to sister
departments. Instead of having each department carry out, say for example, the buying of
its own supplies, procurement is then made into department which does all the procurement
work for the whole organization.

Service centres are also referred to as shared services or shared service centres in modern
literature. According to Bergeron (2003:03) “a shared service is a collaborative strategy in
which a subset of existing business functions are concentrated into a new, semi-autonomous
business unit that has a management structure designed to promote efficiency, value
generation, cost savings, and improved service for internal customers of the parent
organization, like a business competing in the open market”.

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Harmer (2004) described a shared service as an organisational structure that is characterised
by the concentration of company resources and not centralization of company resources,
meaning service centres are by no means centralization. The individual business units are
the shared service organizations partners and they hold the right to demand their desired
requisite service level. In a shared service environment service providers are oriented
towards the business units to whom they provide services.

Bangemann (2005) said a shared service centre is a unit with consolidated, dedicated
resources which provides process or knowledge-based services to several corporate entities.
It operates as a business within the corporate structure and focuses on internal customers.
It uses contractual arrangements within its customers to define the service level.

Bangemann (2005) also identified four core elements of a shared service which are
customer focus, which is the development of customer relationships internally and
externally, cost leadership which emphasises optimization of costs by maintaining a
balance between costs and level of service, quality leadership which requires that
organizations view service centres as core business and make them in perfect collaboration
with its customers and future outlook which is achieved through development of a sound
and flexible basis for growth and change.

Schulman et al (1999) defined shared service centre as the concentration of company

resources performing like activities typically spread across the organization, in order to
service multiple internal partners at lower cost and with higher service levels, with the
common goal of delighting external customers and enhancing corporate value. Schulman
further said a shared service centre is characterized by the putting together of services into
an independent organization that allows employees and managers to work in the service
unit to see directly how they drive the top line revenues and the performance of the cost
centre functions.

The key attributes of a shared service centre operation are:

 Focus on continuous improvement

 Focus on specific activities within processes thus process oriented
 Driven by market competitiveness

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  Leverages on investment in technology.
 Focus on services and support to business partners or customers.
 Is a unit with consolidated and dedicated resources
 Is enabled by standardised processes and systems.
 Focuses on the internal customers.
 Uses Service Level Agreements i.e. addressing costs, quality and delivery time.
 Charges the customers for services provided or has some other form of funding.
Bangemann (2005)

2.1.1 Accounting and finance

The Association of Chartered Certified Accountants (2002) said the finance function is
uniquely positioned to take a leadership role in a company’s change process, as it touches
every point in the value chain and has more contact with other functional departments than
any other area. The finance function has the overall ownership of information management
and delivery. In order to become an effective change agent within the organization, finance
must redefine its own role. It also said for many organizations the consolidation of dispersed
finance activities is often a substantial achievement in itself. The two most key functions
within the accounting and finance shared service centre are accounts payables and accounts
receivables.

The accounts payable system varies from one entity to another but a typical system will
have a receiving clerk who, upon arrival of claims, begins processing the claim carrying
out quality and quantity checks. Optionally electronic scanning of the claim is used to
capture the claim into the system. The payment is then posted into accounting and released
for payment by the bank, or electronic banking is used to effect payments. The Hackett
Group (2002) outlined that one of challenges with accounts payable moving to SCSs is the
physical location of paper invoices. A survey by Price Waterhouse Coopers (2006)
suggested that a solution to this problem is having the claims sent directly to the SC where
they are processed and stored.

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The accounts receivable system at KPP is mainly characterized by student accounts as they
are the key customers of the accounting and finance SC. The SC takes over processing of
customer invoices soon after the service has been delivered to the customer and the
appropriate posting has been made in the accounts receivable system. The process clerk
checks that every student has been issued with an invoice. Invoicing customers takes many
forms which include sending paper invoices and electronic invoicing. The role of the SC is
to review on a regular basis incoming payments and match them with outstanding invoices.
Kris (1999) said the information technology backbone for accounts receivable processing
within a service centre is the accounting system.

2.1.2 Administration

Administrative processes can be seen as those activities that are supportive in nature that
facilitate the smooth execution of the core mandate of the various functions of an
organisation. The Business Dictionary (2017) defines administration as the arrangements
and tasks needed to control the operation of a plan or organization. Foster et al (2007) said
a service centre fulfils only the core processes for which it has been created. In order for it
to function properly, it also needs proper handling of its administrative processes.
Administrative processes are an important part of the shared services process and their
proper management assures that the service centre fully concentrates and focuses on its core
activities. Some of the key functions that fall under administration at KPP as a service centre
include cleaning, general maintenance service, canteen and catering services, security
services and procurement.

2.1.3 Human resources management

According to Storey (1995:5) “Human Resources Management is a distinctive approach to

employment management which seeks to achieve competitive advantage through the
strategic deployment of a highly committed and capable workforce, using an array of
cultural, structural and personnel techniques.”

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The human resources department at KPP oversees management of personnel drawn from
all departments within the institution. Some of its key responsibilities include employee
training related issues, employee appraisals, working conditions, employee welfare,
processing of leave days, employee disputes and any other issues relating to management
of human capital.

One of the key functions that the human resources department at KPP is responsible for
identifying the training needs of employees, the performance appraisal process and
recommending the nature of training programmes and workshops needed. Reid and
Barrington (1994:17) define training as a ‘planned process to modify attitudes, knowledge,
or skill behaviour through learning experience to achieve effective performance in an
activity or range of activities’.

2.1.4 Motives for establishing service centres

Janssen and Joha (2006) categorized the motives for establishing shared service centres into
four categories; strategic and organisational motives, technical motives and political
motives. These motives are not only related to financial factors, but also to other, socio-
technical factors.

Strategic and organizational motives include gaining access to high quality IT services and
skills, share risks among departments, increase productivity, professionalizing service
delivery, reduction of complexity/uncertainty, synergy and concentration of innovation,
standardize functionality and processes, and disseminate and impose successful practices.
Political motives include to enhance credibility, solve internal conflicts, and eliminate local
and complicated control of IT function. Technical motives include Access to
expertise/technology, better performance of local ICT staff, higher service levels,
concentration of technical and project management expertise, consolidate experiences.
Economic motives include lower control and maintenance costs, improving accountability
of control, better cost predictability and reduction of overcapacity by consolidation of
systems.

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2.2 Benefits of service centres
The Corporate Leadership Council Report (2006) and an article by Ulrich (2006) both
explored the advantages of shared services. Following the work of Kagelmann (2000),
companies applying the shared service approach are striving to reach many objectives. The
benefits of shared service centres will be drawn from the above mentioned sources to try
and expose the key benefits derived from the implementation of shared service centres.

Enhancing quality and efficiency

The concentration of specialized personnel in one department will increase the efficiency
and quality of service delivery as a result of the learning effect and utilization of core
competences. Efficiency is achieved through achieving more output with less input which
is a result of specialization and standardization. Reilly (2000) alluded that from the
standpoint of quality development, there is a desire for the support functions to be more
professional in the services done, achieve greater consistency and accuracy and to be more
aware of best practices internally and externally.

Focus on core competences

The concentration of specialized personnel into service centres will reduce workload and
oversight of management over support activities thus allowing management to concentrate
their efforts on core competences of the organization and strategic aspects of operations.
Johnson et al. (2008) define a core competence as a resource, process or skill, which provide
competitive advantage.

Leveraging on resources and systems

An organization can leverage its resources and systems so as to achieve increased

productivity, efficiency, quality and cost reduction. By concentrating resources and system
which include procurement system, advanced technology and personnel; any organization
can enjoy high buying power, productive efficiency and reduced labour costs respectively.

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Reduced costs

Cost reduction is achieved through elimination of duplicated functions that are done at
individual department level, and concentrating these functions into one department that
then specializes in the provision of that function. Using economies of scale that accompany
the implementation of Shared Services results in reduced unit cost. Concerning the cost
saving potential, many studies indicate the theoretical saving potential of moving to shared
services to be on a level of 15-40% (Wyman, 2007; Deloitte, 2007). There is also a
reduction in administrative expenses by capitalizing on economies of scale, consolidation,
standardization and automation of processes.

Continuous improvement

Service centres enable an organization to focus on operational efficiency by consolidating

support and non-core processes into a separate department within the organization, this in
turn ensures that there will always be continuous improvement of the consolidated function
as they change to meet ever changing customer expectations. Shah (1998) was of the
opinion that implementing change is easier with 40 people who are in one location as
compared to 40 people spread over 15 locations.

Customer oriented and process centered

Service centres are customer oriented and this ensures that the customers (business
department) served by the SCs will be able to define their service level needs and
expectations, by providing feedback and requirements. Schulman (1999) said shared
service operations are process oriented and focus on specific activities within processes to
support internal and external clients.

Reducing cycle time

The time that it takes for a given process to complete and deliver its function is reduced
where the function is formed into a service centre. According to Krajewski, Ritzman and
Malhotra (2009), cycle time can be defined as the maximum time allowed for work on a
unit at each station. Concentration of expertise and the learning effect will significantly
reduce the time required to complete a given function.

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Improved knowledge management

The capturing and use of experience is difficult to implement where each department carries
out a common function for itself, due to lake of coordination and consolidated control.
Service centre allow the organization to better manage the knowledge gained from
experience or otherwise. Mullins (2010) defines knowledge management as the promotion
and formalization of learning within the workplace with the aim of aligning training with
the needs of the business.

Generation of additional external revenue

SCs provide their service to both internal and external customers and charges a price for
the services it provides. The price paid by external customers will be extra income to the
organization and it will contribute to revenues and profits of the organization. By doing so,
and with the provision of services as their core, they can become an independent business
and consequently contribute to their parent company’s turnover and profit (Williams,
2001). However, it needs to be mentioned that this depends heavily on an organization’s
long-term strategy and its willingness to invest in a non-core business (Mar-shall, 2001).

2.3 Factors promoting or hindering service centres

London Centre of Excellence (Annual Report: 2006; 06-08) distinguished the factors
promoting/hindering service centres between internal and external drivers.

2.3.1 Internal drivers

Strategic drive

The willingness of members of SCs to enter into SC partnerships can be seen as the strategic
drive. The reluctance of member may be caused by a number of factors such as reluctance
to take risks and lack of trust. Accountability problems within an institution are seen as a
barrier.

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Leadership

Leadership plays an important role in enabling the development of service centres through
making it possible for managers to take risks, investing in skills development, maintaining
commitment and rewarding success. Where use of SCs is initiated at senior levels of
management, barriers are likely to be overcome.

Lack of information

Lack of information is another barrier to the development of SCs because management

lacks reliable benchmarks against which to judge the value and potential savings of
different service options. Information asymmetries resulting from inconsistencies of market
circumstances will make it difficult for managers to access information on the alternatives
available to achieve the service needs of the organization. It then becomes difficult for
managers to decide whether or not use of service centres is the best alternative to meet
service needs of the organization.

Organizational culture

Organizational culture is both a potential driver and barrier to the development of service
centres. Ambitious and positive corporate cultures create the right atmosphere for
innovation and this can also support efforts to improve quality and cost efficiency through
service centres.

2.3.2 External drivers

High service costs

Where staffing costs and operational costs are high and this compounded by problems in
recruiting and training high staff for routine and high volume transactional services, this
could lead to a high dependency on agency staff.

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Financial pressures

There is need to make savings from use of service centres in order to protect highly visible
services as a strong driver for both senior management and indicating that any further
government pressure could be exceeded. This pressure pose a potential barrier.

Government policy

Government policy has conflicting impacts on the move to develop service centres. On the
other hand the government can create an environment in which efficiency is high on public
institution agenda. The policy drivers create targets for efficiency savings.

Local area agreements (LAAs)

Local Area Agreements create additional drivers for shared support services. Pooled
budgets and new performance management systems require new infrastructure to support
them. Where organizations are jointly responsible for delivering services or achieving
targets, this will lead to the development of service centres. LAAs create a need for shared
data sets and shared performance management systems, and scope of integrating and
reengineering services radically to better achieve local outcomes.

2.4 Challenges in implementing service centres

Challenges in the implementation of service centres can also be seen as barriers or risks
depending on the literature being referenced. These terms however all refer to those issues
that impede the smooth implementation of SCs. The audit commission (2005) identified
behavioral and cultural issues as the major challenges for effective service centres. Su et al.
(2009) said implementing shared services incurs risks which include operating cost
escalation and lack of corporate flexibility. In the following the associated risks will be
elaborated.

15
Increased system complexity

The exercise of trying to standardize different processes, technologies and departmental

structures, into a shared service centre can lead to incompatibilities. As mentioned earlier,
the main priority of SCs is to arrive at standardized processes. Aligning the processes and
systems already implemented in practice within a given organization to the standardized
processes at the service centre can increase the complexity of the system.

Long project timelines and unexpected implementation costs

Implementation of service centres usually has implementation costs and project time lines
that vary from the planned outcomes due to difficulty of predicting these variables.
According to Callan (1998), implementing shared services generally requires a major
upfront investment in systems and restructuring charges. Furthermore, as the
implementation of shared services is generally new to the organization, this may cause
variations in expected timelines.

Unbalanced power concentration

Upon implementation of SCs, managers are deprived of direct access to their support
functions, leading to reduced power in their area of control. At the same time, the power of
those support functions is concentrated within a service centre. Such shift in power can lead
to conflicts between different departments within the organization.

Resistance to change

Change is usually associated with perceived unfavourable outcomes and loss of benefits
in the current setup. People usually resist change because they enjoy things as they are
and they are ignorant towards adjusting and upgrading to new practices. Resistance to
change is one of the lead challenges to adoption and implementation of service centres.

16
Lack of corporate flexibility

Although standardization is a driver to the success of shared services, it is fairly difficulty

to balance standardization and flexibility. From the shared service customer perspective,
standardization can prove to be inflexible respect of the specific needs of different business
units (Speedy, 2008).

Operating cost escalation

In the preparation phase of a shared service the operating costs are also forecasted, leading
to estimated prices for the services. However there will usually be differences between
estimated and actual operating costs. The main reason for the escalation of operating
expenses is that the cost savings are not fully taking place as to expectation. Reasons for
this can be that the customer base is not broad enough and does not provide sufficient
economies of scale (Callan, 1998).

Ineffective communication

Communications is important for the successful implementation of service centres as it

allows service providers to receive the requirements and specifications of customers and in
turn customers can clearly express their needs and concerns. It also facilitates the smooth
flow of operation as instructions and feedback flows between managers and workforce
within service centres. Ineffective communication will fatally injure the intended outcome
of service centres.

Over standardization of processes and systems

Some of the key drivers of service centres is the consolidation and standardization of the
services provided by the shared service centres to the customer. However, such a kind of
standardization also demands clear rules in terms of content, the course of events, error
detection and feedback system and system requirements (Kagelmann, 2000). There must
be room for the tailoring of standards to ensure that over standardization is avoided.

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Unclear service accountability

Establishing shared services can lead to a kind of ‘silo’ thinking in terms of ‘us’ versus
‘them’ (Bergeron, 2003). This can especially be the case when interfaces between the
shared service organization and the business unit are not clearly defined. Unclear
governance and compliance can generate high risks and reduce the performance gains of
shared services (Bedell, 2010). It is important to note that the mutual openness, cooperation
and proactive behavior of both service centres and customer departments guarantee success.

Corporate culture

Culture can be seen as those norms, practices or values that govern how things are done
within an organization. If an organisation has a weak culture which does not promote
agility, adaptability, dynamism and innovation; this may be a challenge in the
implementation of service centres. SC implementation requires adaptation and adjustment
towards change and a culture which does not resist change but rather embraces it.

2.5 Best practices in utilization of service centres

Bergeron (2003) suggests that the availability of highly skilled workers, supportive
business culture, high level of employee morale and open employee communications are
necessary for a shared services environment. Microsoft (2014) identified best practices for
government shared services. The federal IT shared services strategy (2012) of United States
of America highlighted the critical success factors which should be considered when
implementing IT shared services. Ernst & young (2013) identified the five vital rules of
engagement that successful SSC implementation follow.
The factors given below have been drawn from the above sources and blended together to
give a more detailed summary of the factors which are the key to the success of service
centres, which are also referred to as best practices.

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Strong leadership and support
Leadership must be solidly behind their shared service plan otherwise needed changes will
not happen. A shared services strategy must have active high level support from senior
executives. Appropriate consultation and participation is necessary for the successful
implementation of shared service centers.

Strong change management and transition skills

Change management and transition requires careful execution to prevent high costs, ensure
customer needs are met and to ensure stakeholders are satisfied. The key to successful
implementation of service centers is a focus on instilling a service and continuous
improvement culture.

Sound corporate governance

A good governance structure requires a clear description of roles and responsibilities
between the purchaser and provider of shared services. The business dictionary (2017)
defined corporate governance as the framework of rules and practices by which a board of
directors ensures accountability, fairness, and transparency in a company’s relationship
with its all stakeholders.

Resource Realignment
Resources must be re-organized so as to pool them together into the new shared service
centres. Financial and personnel resources must be moved away from duplicated programs,
workflows and systems to the new shared service centres.

Technology Enablement
Robust connectivity and the use of agile operational and computing technology are two of
the primary technical elements that are the key to the success of shared services. The
modernization and advances in processing, storage, and standards will enable the
functionality, security, and cost efficiency in the shared service centres that will be required.

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Business Process Reengineering
The processes by which business operations and are conducted must be reengineered to
remove inefficient processes and optimize business processes into processes that work
across the entire organization.

Clear service level agreements and service delivery

Service level agreements are contractual agreements between the service centre and the
customers that stipulate mainly costs and quality issues. Bergeron (2003) said service level
agreements dictates the acceptable minimum performance and service levels that the
service provider is to deliver before penalties and consequences arise. The agreements will
show consensus as to what needs to be done, when it should be done and how it is to be
done. The price that will be charged for the service and the level of quality expected by the
customer will also be specified. A shared service centre should clearly define the level of
services to be provided.

2.6 Empirical evidence

ICT shared service in the higher education sector; foundations, benefits, success
factors and issues by Miskon; Queensland University of Technology, Australia (2013)

The primary objective of the study was to obtain an understanding of the nature and
potential for ICT shared services, particularly in the Malaysian higher education sector, by
laying a foundation in terms of typologies, definition and research agenda and deriving
conceptualisations based on theory of the potential benefits of shared services, success
factors and issues arising in the pursuit of shared service centres. The study conducted a
detailed content analysis of 36 global cases. Three case sites within the Malaysian higher
education sector were included in the study. The study concluded that there are eight
different types of structural arrangements for shared service centres, as was observed in
practice, which can be usefully differentiated.

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Motives for establishing shared service centres in public administration by Janssen
and Joha; journal of finance (2006)
The paper presents motives for introducing shared service centres in public
administration.it compares motives for introducing shared service centres with
accomplished benefits and also motives with outsourcing. Exploratory research was used
with ministry of justice of Netherlands being the case study. Interviews with staff from
courts were used to analyse the motives for shared service centres. The research is a
qualitative single case study. The researcher conducted twenty four interviews at various
locations. The research recommended that it is important to design the shared service
centres in such a way that different motives are carefully chosen and balanced. It also
concluded that expected benefits depend on combined advantages of both centralized
models.

A literature review on shared services by Ramphal; journal of business management

(2012)
The papers objective was to present a brief literature review on shared services since this
concept was still a relatively new concept with limited academic literature and was gaining
research interests from many academics. The review was developed from a number of
articles written by other practitioners and a number of books on shared services. The
intention of the papers contribution was to assist scholars engaged in shared services
research. The article includes definitions, advantages, key success factors, characteristics,
configurations, problems and quality criteria of shared services.

An assessment of shared services in Scotland’s higher education sector by Ernst and

young, United Kingdom (2013)
The report intends to assess the higher education’s use of service centres with attention on
three main issues; highlight benefits that have been derived, set out areas for development,
identify and articulate progress. The project was a combination of desk based research,
review and finalization of case studies, consultation with key professional groups and data
request from shared service partners. The report made conclusions identifying potential
opportunities and recommended measures to improve on use of shared services.

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Assessing the potential of inter-organisational services by Yee Hon Weng; Queensland
University of Technology, Australia (2009)
The first objective of the research was to seek a clear conceptual understanding of the
differences between shared services and outsourcing. The second objective was to develop
a decision model which would assist institutions in deciding which of the two earlier
mentioned would be more appropriate to use in pursuit of improvement of operational
processes. The study was on universities in higher education sharing administrative services
common amongst them. It assumed such services are similar in nature. The case study
involved face to face interviews with representatives of a University in Australia. The key
findings suggested that sharing of common services is possible for Universities.

Financial shared service centres; opportunities and challenges for the accounting
profession by the Association of Charted Certified Accountants (2002)
The report explores financial shared service centres with focus on shared experiences of
multinationals and public sector organisations in United Kingdom and Ireland. The report
also examines the impact of financial share service centres on local accounting services and
long term development of the accounting profession. The report is a two part imperial study
which consists of postal survey and in-depth case study examination of seven organisations
that use financial shared service centres. The conclusions based on the results said that
shared service centres are an established part of the business landscape and are likely to
remain as such for the foreseeable future. The research found that keeping staff motivated
was important, and highlighted the importance of cultural and linguistic issues. The report
said key success factors are clear vision, strategy and support from senior management.

The impact of shared services in public procurement operations on good governance

by Strauss; Modul University, Vienna (2013)
The research sought to verify and measure the effects of shared services in public
procurement on good governance. The study was conducted in 23 countries within the
European Union in 2012 and 2013. The conclusions provided evidence which suggested
that implementing shared services in public procurement operations causes and improves
good governance in public procurement.

22
Assessment of the impact of employee perception on decentralization of shared service
centres: a case study of world agroforestry centre by kasyoki; University of
Sunderland, England (2011)
The purpose of the study was to assess the employees’ perception of decentralization of
shared services model. The study used a case study of ICRAF to bring out the benefits of
decentralizing shared services, determine guidelines for decentralization, review challenges
of decentralisation and formulate strategies that enhance decentralisation of shared services.
Stratified random sampling was used to select 118 employees from the payroll of whom 84
responded to the survey. Data was analysed using descriptive statistics and one way analysis
of variance (ANOVA). The study recommended enhanced managerial training so as to
build capacity which is adequate for the decentralised structure. It also said the organisation
needs to create consultation and e-groups for regional staff to facilitate the integration
process.

Four-phase model for the implementation of shared services by Wenderoth;

University of Pecs, Germany (2013)
The objective of the study was to develop a model for implementation of shared services
based on analysis of the present scientific and general literature describing the many
decisions and activities during implementation of shared services. The model was
theoretically founded on economic theories and organizational and management research
theories. The study was carried out on 500 companies, 25 consulting companies and 133
institutions of higher education in Germany. The study recommended that management of
shared services organisations should continuously work on its performance in order to
generate customer value and satisfaction. It also recommended clear communication of
activities.

Success factors for implementing shared services in government by Burns and Yeaton,
IBM centre for the business of government (2008)
The report assesses the lessons learnt from government organizations that have successfully
implemented shared services and it recommends best practices in the implementation and
management of shared services.

23
The report concluded that the successful translation to shared service centres depends on a
combination of strong management skills, senior-level support, effective communication,
a strong change management programme and a phased approach to implementation.

2.7 Gap analysis

Service centres have many benefits they bring to the organization as seen in the review
made in this chapter. It is key to note that the achievement of these benefits is subject to the
entity’s adoption of best practices in the implementation of service centres. It can be said
that success of service centre is hinged on the adoption of best practices in the effort to
counter challenges and capitalize on the factors that promote service centres. It is the
intention of the researcher to determine whether SCs have achieved their intended purpose
and whether KPP should continue using SCs. In as far as existing knowledge is concerned,
use SCs has potential to benefit KPP if implemented and managed well. Based on literature
it is clear that the continued use of shared SCs can be recommended to KPP. The researcher
can therefore say that the problems being encountered by KPP in the use of SCs are a result
of other reasons, which do not include the absence of benefits from use of SCs. The
researcher will therefore take further action to understand the causes of the problems being
encountered by KPP in the use of SCs, and make recommendations to KPP based on
analysis and conclusions made on the situation.

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 CHAPTER III

RESEARCH METHODOLOGY

3.0 Introduction
This chapter highlights the research methods used by the researcher in gathering
information. This chapter seeks to explore methods and techniques that were used in
collecting the data and information. The chapter gives an overview of the research design,
the research population and sampling used together with the approach which the researcher
used in analyzing the data and information. The chapter also explores the research
instruments employed, data collection procedures and data presentation and analysis.

3.1 Research design

According to Kothari (2004) a research design can be seen the conceptual structure within
which research is carried out, it forms the blueprint for the collection, measurement and
analysis of data. The research design is the blueprint for fulfilling of objectives and
answering of questions. Research design is used to refer to the processes and stages which
connect research questions to data (Punch, 1998).

The case study method was used in this research to allow the problem to be studied in its
natural setting thus it provides practical facts relating to the problem. Yin (1984:23) defined
the case study research method “as an empirical inquiry that investigates a contemporary
phenomenon within its real-life context; when the boundaries between phenomenon and
context are not clearly evident; and in which multiple sources of evidence are used.”
Auckson (2004) describes a case study design as being focused on the enquiry around an
instance thus a study of a particular scenario. The case study method was used to allow the
problem to be studied in its normal setting thus it provides practical facts relating to the
problem. It also allows for systematic and in-depth investigation of variables of interest to
the researcher.

25
3.2 Data sources
There are two main forms of data, primary and secondary. Primary data being data
structures of variables specifically collected to address the current research problem.
Secondary data is data at hand before conducting the research that was collected for
purposes other than addressing the current research problem.
More reliance will be placed on primary data for the following reasons:
 It is more reliable than secondary data
 It is more relevant and original
 It is objective and free from bias compared to secondary data
 It is up to date and current thus not out-dated

However secondary data will also be depended upon but to a lesser extent compared to
primary data. Mainly it will be in form of journals, textbooks, annual accounts, internet,
articles, publications etc. Qualitative data refers to data that has not been quantified or that
is not numerical. The data analysis procedures can be deductive or inductive. The data can
be obtained through interviews, observations, questioners etc. Qualitative data will be used
in this research. Quantitative data refers to data that is in numerical form. It is based on
meanings derived from numbers. Analysis of such data can be achieved through use of
diagrams and statistics. By the inclusion of both quantitative and qualitative data, the case
study method helps explain both the outcome and process of a scenario through observation,
analysis and reconstruction of the case under investigation (Tellis, 1997). The use of
diagrams such as tables and pie charts will also be employed in this research.

3.3 Population
Crawshaw and Chambers (2002) defined population as a group of interest to the researcher
to which he or she would like results of the study to be generalized. A population is a group
of persons, events, objects and items from which samples are taken for measurement. It is
the total membership of the group under study. For this study the population is 32
employees which comprise all staff members in the eight departments which house the
service centres.

26
3.4 Sampling
According to Saunders, et al., (2007), sample or research population is a set of cases or
group members that you are researching. A sample is a part of the target population that is
taken to be a true representative of the entire population. According to Kothari (2004), size
of sample refers to the number of items to be selected from the population to constitute a
sample. Kothari said size of sample should not be too large or too small but should be
optimum, where an optimum sample is one that fulfills the requirements of
representativeness, reliability, efficiency and flexibility. The researcher must determine the
desired precision and an acceptable confidence level for the estimate.

The sample constitutes the head of technical division and the vice principal who is head of
support departments, seven heads of departments drawn from the three departments in the
technical division excluding IT (academic) department and nine employees from the eight
departments. The sample size i.e. eighteen (18) employees, was based on the number of
shared service functions within KPP and the number of employees in each function, it was
made to have fair representation from both management level and operational level
employees.

The sampling methods used are convenient and quota sampling. Crawshaw and Chambers
(2002) pointed out that convenient sampling is a technique which allows for the study of
accessible and readily available respondents. Convenient sampling was used to select the
number of employees in each function or department. Kothari (2004) said under quota
sampling the actual selection of the items for the sample is at the discretion of the
interviewer, quota samples are in essence judgment samples. Quota sampling was used to
select the specific operational employees for each department.

The main reason of using the above mentioned sampling methods is to allow selection of
staff members who have direct and frequent contact with the service centre and thus who
have experience in the implementation and use of the service centre. The methods are also
cheap and easy to administer.

27
3.5 Data collection techniques
Saunders (2007) suggest that using both interviews and questionnaires enable the researcher
to do away with the shortcomings of each method. Triangulation approach was used and
encompassed data collection techniques such as questionnaires, interviews and observation.
The research will use questionnaires, interviews and observations.

3.5.1 Questionnaires
A questionnaire is a list of predetermined and structured questions which are answered by
the respondents, it provides a critical link by translating objectives into language
understandable to respondents (McDaniel and Gates, 2001). It will contain both open and
close ended questions. The questionnaire will be used for head of departments and staff
members of each shared service function. . A questionnaire presents information in written
form to the respondents and require in return a written response containing information as
per the research questions. There three main characteristics of a good questionnaire, are
devoid of leading, clarity and complex questions. The questionnaire was used because it
achieves privacy and anonymity while reducing bias and manipulation through influence
of direct interaction. A self-administered questionnaire was used.

Advantages of using questionnaires

 It is comparatively the cheapest method of gathering data.

 It provides the respondents with anonymity meaning they can freely air their views.
 A questionnaire allows better comparability of responses because of the uniformity
in the questions that are asked.
 The respondents can thoroughly contemplate a question because they are not under
duress to respond immediately.
 If the questions are prepared and designed correctly, the questionnaire provides
accurate and straightforward responses.
 The responses from the questionnaire can be used to highlight the areas that will
need to be emphasized when conducting interviews.

28
Disadvantages of questionnaires

 The response rate might be low. There is a need to following up on the

respondents.

 The researcher cannot ask for further clarification on issues raised.

 The respondents might not fully understand the questions.
 You will not get more information from the respondents’ gestures and actions as
you would in an interview.

3.5.2 Interviews

According to (Kothari, 2004), the interview method of data collection involves presentation
of oral-verbal stimuli and reply in terms of oral-verbal responses. This method can take the
form of personal interviews and telephone interviews. Personal interview method requires
the interviewer asking questions in a face-to-face contact with the other person or persons.
An interview involves oral questioning of the responded by the interviewer and it can be
done face to face or over the telephone. The personal interview was used for the head of
technical division and the vice principal. It allows for in-depth discussion of matters of
interest and decoding of non-verbal responses.

Advantages of interviews
 Interaction between the researcher and the respondent ensures more conclusive
responses.

 The interviewer can ask for further clarification on specific issues.

 The interviewer can explain a question to the interviewee for clarity.

 Visual aids can be used by the interviewer to elaborate on a question.

 Response rates are very high when compared to other techniques.

29
Disadvantages of interviews
 Subjectivity and bias may increase due to contact with subjects.
 There are a lot of formalities involved.
 Relatively more costly in terms time for both parties i.e. booking appointments and
tight schedule for respondents.

3.5.3 Observations
According to Kothari (2004), under the observation method, the information is obtained by
means of investigator’s own direct observation without requesting it from the respondent.
Observation involves the researcher watching the subject of interest without the subject’s
knowledge or without direct interaction and involvement with the subject. Observation
were used to obtain data with regards other matters such as the condition and state of
services provided by the service centres. Observations were in natural settings, whereby
behavior is observed when and where it is occurring. The main advantage of observation is
the elimination of subjectivity and bias. Another distinct benefit of the observation
technique is that it records actual behavior, not what people say or their opinion. The
observation technique can provide greater insights than an actual survey technique. On the
other hand, the observation technique does not provide us with any insight into what the
person might be thinking or what might motivate certain behavior.

3.6 Data collection procedures

The researcher first sought authority to carry out the research from the Ministry of higher
and tertiary education, science and technology development. The researcher contacted the
institution through the offices of principal and vice principal. The vice principal call a
meeting with the heads of divisions and departments and introduced them to the researcher
and told them that they should assist the researcher since he had formal authority to conduct
the research. The researcher then made appointments with the two interview subjects and
distributed his questionnaires to department personnel. Ample time was given to the
respondents to privately respond to the questionnaire. The researcher later collected the
questionnaires.

30
3.7 Reliability and validity
According to Ayodele (2012), reliability refers to the balance between what the researcher
record as data, and what actually comes in the natural setting that is being studied. A test is
reliable if it yields consistent results. To ensure reliability the researcher used multiple
instruments (triangulation) which are questionnaires, interviews and observations. Validity
refers to the extent to which an instrument measures what it purports to measure or rather
how truthful the research results are (Walden; 2012). Data will be collected from reliable
sources and the questionnaire to be used will be examined to ensure relevance of questions
asked. The researcher also used triangulation which is a powerful technique that facilitates
data validation (Payne and Payne 2009).

3.8 Data presentation and analysis

After data is gathered, Pie charts and graphs will now be used to represent diagrammatically
the responses from the questionnaires and interviews. The data gathered through interviews
and questionnaires is going to be presented in diagrams such as bar graphs, pie charts and
tables. The researcher will mainly use the Statistical Package for Social Sciences (SPSS)
tool in the presentation of pie charts, bar graphs and tables. Data analysis will mainly
involve drawing meaning from the data and comparing with related studies to identify areas
of similarity and difference. Where possible, subject to availability of secondary data, other
mathematical techniques will be used to analyze data e.g. trend analysis etc.

3.9 Summary
This chapter outlined the methodology for the research, which is based on the literature
review, questionnaires, interviews and observations. The chapter explored various
techniques and methods used in carrying out the research. The data gathered answered
research questions and uncovered other practical aspects related to utilization of service
centres. The chapter detailed how the researcher gathered data for the research and the
advantages and disadvantages of the methods used in gathering data. The following Chapter
will discuss and analyze the research findings from surveys that were carried out.

31
 CHAPTER IV

DATA PRESENTATION AND ANALYSIS

4.0 Introduction
This chapter looks at the presentation and analysis of findings obtained by the researcher,
as indicated in the methodology, through questionnaires, personal interviews and
observations. This chapter is also concerned with data interpretation and discussion. The
primary and secondary data collected seeks to accomplish the objectives mentioned in
chapter one and to respond to questions using data collection instruments elaborated in the
previous Chapter. The chapter comes at a point when the researcher has obtained responses
from questionnaires, has conducted interviews and observations have been made.

4.1 Data response rate analysis

4.1.2 Response from questionnaires

A total of 16 questionnaires were distributed to employees working within service centres,
seven of them being heads of departments and nine being department staff. All of them
were returned meaning a favourable response of 100% was received. This was probably
due to the fact that the vice principal was coordinating the data collection process to ensure
the researcher gets access to the information he required. Also the questions were not too
many and were easy to understand.

Table 4.1 : Questionnaire response rate and interview success rate

Respondents Success rate (%)
Target Actual

Questionnaires 16 16 100%
Interviews 2 2 100%
Source: primary data, 2017

32
4.1.3 Interview Response Rate
A number of other responses were collected during interviews with those respondents who
had time and were keen to discuss additional open ended questions. The researcher
managed to discuss with the head of technical division and the vice principal. The
interviewee opinions will play a significant role in the conclusion of the research. The
interviews were 100% successful as shown in figure 4.1 since all the targeted respondents
were interviewed.

4.2 Primary data presentation and analysis

4.2.1 Purpose of service centres

Question 2 in section B of the questionnaire sought to identify the main purpose of utilizing
service centres at KPP, from the standard reasons as per known practices. The scale of 1
and 2 was use with 1 being agree and 2 being disagree.

Table 4.2 : Responses to reasons for using SCs

Descriptive Statistics
N Mean Std. Deviation
to reduce costs 16 1.1250 .34157
to enhance quality and improve efficiency 16 1.0000 .00000
to reduce service completion time 16 1.2500 .44721
to generate additional revenue 16 1.3750 .50000
Valid N (list wise) 16
Source: primary data, 2017 (by SPSS)

The lead reason for employing service centres, according to the information in table 4.2, is
to enhance quality and improve efficiency (with a mean closest to 1) with generation of
additional revenue being the least of the reasons for establishing service centres (with a
mean furthest from 1). On average the respondents agreed that all of the above mentioned
reasons are motives for establishing service centres at KPP. The standard deviation, which
can be seen as the measure of bias of the mean in relation to actual results, is highest on “to
generate additional revenue” (0.5).

33
In addition to the already mentioned reasons, the interview respondents identified other
reasons for adopting and using service centres, which are to achieve self-reliance and self-
sustenance as an institution thus eliminating the dependency syndrome, to benefit from
concentration of expertize, to provide practical skills and exposure to real world scenario
to students in the technical division; and to facilitate easy control and monitoring of
processes. The findings are partly in concurrence with the study carried out by Janssen and
Joha (2006) which found out that the motives for establishing shared SCs include to achieve
lower control and maintenance costs, to achieve accountability and control, to reduce over
capacity, to focus on core business, to allow sharing of risks, to professionalize service
delivery and create a one stop shop. The study also identified standardization of
functionality as a key driver for SCs.

Question 3 under section B of the questionnaire intended to identify the impact of using
SCs on the lead purposes of employing SCs. There were three responses made available to
the respondents thus a scale of 1 to 3 was used with 1 being negative, 2 being no effect and
3 being positive.

Table 4.3 : Responses to impact of SCs on lead purposes

Descriptive Statistics
N Mean Std. Deviation
operational costs 16 2.4375 .89209
quality of service 16 2.8125 .40311
performance of the institution 16 2.6875 .70415
Valid N (list wise) 16
Source: primary data, 2017 (by SPSS)

Quality of service and performance of the institutions have their means close to 3 thus they
were identified as having been positively affected by the use of SCs at KPP. Operational
costs had a mean of close to 2 meaning the respondents were of the opinion that the use of
SCs at KPP had no effect on operational costs. This is in contrast to Microsoft (2016) which
pointed out that the use of SCs is driven by cost reduction. The measure of bias is highest
on ‘operational cost’ being at 0.89209, which might be the main reason why operational
costs were identified as not being affected by the use of SCs at KPP.

34
4.2.2 Benefits of using service centres
Question 5 in section B of the questionnaire sought to identify the benefits that KPP has
enjoyed from using SCs. The responses available used a scale of 1 up to 5 with 1 being
strongly agree, 2 being agree, 3 being neutral, 4 being disagree and 5 being strongly
disagree. Focus will also be on the benefits that have not been realized through the use of
SCs which would have been expected, under normal circumstances, to be enjoyed through
the use of SCs at KPP.

Table 4.4 : Responses to benefits of using SCs

Descriptive Statistics
N Mean Std. Deviation
focus on customers and processes 16 2.2500 .85635
reduce cycle time i.e. time taken to carry
16 2.6250 1.31022
out processes of service delivery
addition to organization revenue by the
16 2.5625 1.03078
service centre
efficiency in carrying out the functions
16 1.8750 .71880
being performed by service centres
reducing cost of providing the service 16 1.8750 .71880
enhancing the overall performance of the
16 2.5625 .96393
organisation
allow management to focus on the core
16 2.3125 1.01448
competences and mandate
Valid N (list wise) 16
Source: primary data, 2017 (by SPSS)

In the table 4.3, four benefits have been identified as having been realized through the use
of SCs at KPP. These benefits had a mean close to 2 (agree) and these are focus on
customers and processes, efficiency in carrying out the functions being performed by
service centres, reducing cost of providing the service and allow management to focus on
the core competences. This is partially in agreement to the finding of Janssen and Joha
(2006) who identified focus on core competence; and reducing control and maintenance
costs as some of the key motives of SCs.

35
The findings also tend to concur with a study by Miskon (2013) which found out that the
use of SCs bring about economic benefits which include cost reduction through leveraging
resources, removal of duplicate processes, customer orientation, professionalization of
service delivery, enable collaboration, continuous improvement and standardization.

The other three benefits received, on average, neutral responses indicating that the
respondents were not of the opinion that these benefits were realized through the use of
SCs. These are reduce cycle time, addition to organization revenue by the service centres
and enhancing the overall performance of the organization. It can therefore be said that
these benefits were not realized. Standard deviation shows the extent by which actual
responses deviated from the average response (mean), and it is highest on reduced cycle
time’ (1.31022) and it is lowest at ‘reducing cost of providing the service’ i.e. (0.71880).

In response to question 1 under section c of the questionnaire, the respondents identified

other specific benefits enjoyed by KPP which are easy access to information, clear
organizational structure, fitting of security bugler bars at the institution premises, servicing
of college vehicles, construction of water tanks, improvement of machinery in workshops,
quick decision making with service centres, construction of staff housing and creation of a
good working environment.

4.2.3 Factors promoting or hindering service centres

The respondents to the interviews pointed out several factors both internal and external that
either promote or hinder the performance of service centres. The economic climate that the
country is facing was identified as one of the factors hindering the performance of SCs. The
government is faced with serious financial constraints due to harsh economic environment
which interprets into limited budgetary funding capacity. The institution does not get
sufficient funding from government to finance its operation which includes financing of the
service centres. The economic conditions also make it difficult for the technical division
which provides services to both internal and external customers, to attract and retain
external customers for the wide range of services it offers. The labour supply from the
central government employer also a factor to consider.

36
The freezing of posts by the government means the institution will not receive addition to
its staff compliment thus personnel shortages were identified mainly in teaching staff and
staff in other support departments. The centralization of systems and decision making in
government was also mentioned. For any change to be made to a process, system or cycle
there is need for government approval and the process of trying to pursue such change
becomes very long and procedural. This makes continuous improvement difficult to
achieve and flexibility and adaptability is compromised. An example of the procurement
cycle was given where it was too long and disruption to operations and loss of clients is the
result. Trying to make changes is not possible due to rigidness of the system. These finding
were in line with those of the London Centre of Excellence annual report (2006) which
identified government policy and financial pressures as hindering SCs.

4.2.4 Challenges in implementation of SCs.

Question 7 under Section B of the questionnaire intended to identify the challenges that
were being faced in the implementation of service centres at KPP. The responses available
used a scale of 1 up to 5 with 1 being strongly agree, 2 being agree, 3 being neutral, 4 being
disagree and 5 being strongly disagree. Table 4.4 on the next page shows that four
challenges had a mean of close to 2 (agree) which means that, on average, all the
respondents agreed that these challenges have been encountered at KPP. These are lack of
organisational flexibility, complexity of the system, resistance to change and long project
completion timelines. These are the lead challenges, out of the ten mentioned, being faced
at KPP. The other six challenges received had a mean of close to 3(neutral) meaning they
were not encountered at KPP. The measure of variation of actual results from the mean was
highest on ‘lack of clear accountability and responsibility within SCs’ (1.02470) and lowest
on ‘rise in costs of operation’ (0.63246).

In response to question 2 in section c of the questionnaire, the respondents mentioned other

challenges which are cash flow challenges due to poor revenue collection, limited financial
resources, non-cooperation from other staff members, shortage of working space, labour
shortages, limited technical skills and expertise, lack of automated services and conflict
between line staff managers.

37
Table 4.5 : Responses to challenges in the implementation of SCs

Descriptive Statistics

Std.
N Mean Deviation
lack of organizational flexibility towards
diverse needs of customers 16 2.4375 .96393

complexity of the system 16 2.4375 .81394

resistance to change by various stakeholders
16 2.3750 .80623
including employees
lack of clear accountability and responsibility
16 2.8750 1.02470
within SCs
over standardization of systems and processes
16 3.0000 .89443
causing rigidness
ineffective communication systems 16 2.6875 .94648
unexpected and unplanned operation costs in
16 2.8125 .65511
SCs
long project completion timelines 16 2.5000 .81650
rise in costs of operation 16 3.0000 .63246
weak corporate culture that does not support
16 2.7500 1.00000
adaptability and change
Valid N (list wise) 16
Source: primary data, 2017 (by SPSS)

Interview respondents also identified other challenges. One challenge is that the institution
only pays for services rendered by the technical division, in line with the production policy,
after normal working hours which becomes a drawback to service delivery and the payment
is also not consistent. There is also conflict of interests due to clash between lecture time
and production requirements. The use of students who do not have experience threatens
quality of service rendered. There are also too many channels to follow before supply of
service to external customers is approved which leads to loss of business thus bureaucratic
system. Funding required for provision of services to both internal and external customers
is difficult to obtain.

38
There are also challenges experienced in the procurement process which include slow
processing of requisitions, lost requisitions, follow ups to the requisitions which disrupt
other operations and bottle necks due to many procedures. The human resources department
is responsible for all personnel related issues which include logging in and out of work and
approval of leave days, which created a control challenge on punctuality and an
accountability challenge on whether absent staff were formally approved or they are
absconding duty. This is mainly due to communication problems between the human
resources department and the management responsible for staff monitoring (head of
division). Kasyoki (2011) conducted a study which concluded that the main challenges in
decentralized shared services are poor management skills and resistance to change. This is
in partial agreement to the findings of this research which identified resistance to change as
one of the lead challenges. This also concurred with Burns and Yeaton (2008) who said
strong change management and effective communication are key to the success of SCs.

4.2.5 Best practices in the implementation of SCs.

Question 6 under Section B of the questionnaire sought to identify the best practices being
followed by KPP in the use of service centres. The interest of the researcher was to
determine whether or not best practices were employed in SCs at KPP thus more focus will
be on those practices that were not adopted at KPP. The response options given used a scale
of 1 up to 5 with 1 being strongly agree, 2 being agree, 3 being neutral, 4 being disagree
and 5 being strongly disagree. Table 4.5 on the next page shows that six challenges had a
mean of close to 3 (neutral) which means that, on average, all the respondents identified
these practices as having not been adopted in the SCs at KPP i.e. by being neutral. These
practices are professional corporate governance methods and principles, use of formal
contractual agreements in service delivery to sister departments, restructuring of processes
that were previously performed at departmental level and standardizing them into SCs,
change management principles and methods, competent leadership and support from
management; and continuous improvement of processes in order to adjust to diverse
customer needs. The measure of deviation of actual results from the mean was highest on
‘lack of clear accountability and responsibility within SCs’ (1.02470) and lowest on ‘rise
in costs of operation’ (0.63246).

39
Table 4.6 : Responses to use of best practices in SCs

Descriptive Statistics
Std.
N Mean Deviation
professional corporate governance methods and
16 2.5625 .96393
principles
employ modern technology in operations 16 2.5000 .89443
use of formal contractual agreements in service
delivery to sister departments 16 2.6875 .79320

restructuring of processes that were previously

performed at departmental level and 16 2.7500 .85635
standardizing them into SCs

change management principles and methods 16 2.6250 .71880

competent leadership and support from
16 2.5625 .62915
management
continuous improvement of processes in order
16 2.6250 .88506
to adjust to diverse customer needs
Valid N (list wise) 16
Source: primary data, 2017 (by SPSS)

The respondents to the interviews identified other practices employed at KPP. There is a
reward system in line with the production policy where for services provided by an
academic department either to internal or external customers, the department staff and
students are rewarded in money terms. There is also a work for your fees programme were
students, mainly under the technical division, provide services and the rewards from such
services go towards payment of their fees.

The best practices employed by KPP are partly in contrast with a study by the Association
of Chartered Certified Accountants (2002) which said the key critical success factors are a
clear vision, strategy and support from senior management. The practices being employed
by KPP are also in contrast with study by Miskon (2013) which concluded that success
factors in the implementation of SCs include change management, effective

40
communication, establishing a reward system, integration of information technology, team
work, stakeholder involvement and top management support.

4.2.6 Recommendations from respondents

Question 3 under section B of the questionnaire intended to determine whether SCs are
achieving their intended purpose and hence should continue to be used, or if they are not
behaving as intended and should be dropped.

Figure 4.1 : Recommendations to continue using SCs

Source: primary data, 2017 (by SPPS)

Figure 1 shows that 93.75% of the respondents recommended the continued use of service
centres and the reasons cited are that SCs reduce costs, instil life skills for learners, they are
cheaper and faster, they reduce idle time and they improve quality.

41
Question 3 under section C sought to find the solutions to the challenges being faced by
KPP in the opinion of respondents. The question was open ended and several responses
were obtained and these will be discussed below. Capacity building and training to equip
employees manning the SCs with requisite skills need to execute their mandate effectively
and efficiently. Improve communication among key stakeholder was also identified as
necessary for the timely identification of deficiency and formulation of appropriate
corrective action. The adoption of current or modern technology was mentioned as a critical
factor in facilitating efficiency within SCs. The need for corporation and unity of purpose
was emphasized to ensure that collective efforts are made towards achieving the common
good. Formulation of policy regarding the operation of SCs was said to be vital because it
will ensure that implementation and functioning of SCs follows a defined strategic and well
laid out path hence delivering standardization of systems.

Consultations with stakeholders before implementation is needed for the incorporation of

stakeholder needs and timely response to user needs. The prioritization of resources where
possible was said to be important to ensure that key tasks and resource needs are executed
first with respect to their level of importance. Regular workshops should be conducted to
equip personnel with required skills and to act as a platform for all parties to share
experiences and ideas thus allowing for collective decision making and consultation.
Financial support should be sought from government were possible to reduce the financial
problems being faced by the institution. Support from top management is needed to instill
confidence in staff member in the execution of their duties and ensure that every action
taken has the blessing of top management. Infrastructure development is required to
capacitate the SCs and ensure availability of requisite facilities from which the SCs operate.

The respondents to the interviews also made recommendations. One recommendation made
was that the approval process for service provision to external customers should be
shortened for service centres in the technical division. It was said that it is better to provide
the customer with the service first then follow authorization procedures later. Another
recommendation was that some functions should be integrated into customer departments
and not fully centralize them into service centres, mainly the procurement and human
resources departments.

42
The head of the commerce division also suggested that that the service centres should
absorb some of its students for attachment so they can gain experience from within, mainly
the purchasing and supply; and accountancy students. The recommendations made by
respondents were partly in congruence with a study by Kasyoki (2011) which made
recommendations which include developing transparent working policies, making staff
development plans, establishing effective communication systems, pursuing enhanced
managerial training and creating consultation group and electronic groups. This was also in
line with Wenderoth (2013) who recommended clear communication of activities.

4.2.7 Other background information

Question 1 under section A of the questionnaire intended to determine the exposure the
respondents had to SCs and the experience level, with respect to time, they have
accumulated in implementation of SCs. It can be said that the respondents had satisfactory
experience since every respondent had more than 2 years working in their respective SC
department.

Figure 4.2 : Responses to years of experience

Source: primary data, 2017 (by SPSS)

43
Question 2 under section A of the questionnaire aimed to determine the professional
competency of the respondents thus whether they are qualified to occupy the positions they
have and their capacity to deliver on the functions of the SCs. The results below show that
all respondents held at least a diploma or better. It can therefore be said that the SCs at KPP
are manned by qualified and competent personnel capable of professionally discharging
their duties within SCs as to the mandate of the departments they fall under.

Figure 4.3 : Responses to level of educational qualification held

Source: primary data, 2014 (by SPSS)

Question 1 under Section B of the questionnaire sought to obtain information on whether

the respondents possessed any management related qualification that gives hive the
requisite management and governance skills that are necessary for the proper management
and governing of SCs. Despite 3 respondents (18.75%) who had no management related
qualifications, as shown in figure 4.4 on the next page, all other respondents had at least a
management training workshop certificate.

44
Figure 4.4 : Responses to level of management qualification

Source: primary data, 2017 (by SPSS)

4.3 Secondary data analysis

The secondary data obtained by the researcher was mainly financial statements consisting
a trial balance, income statement and balance sheet. The researcher picked out only that
information that relates to service centres at KPP. The extract below was made from the
trial balance.

The researcher chose a simple way of analysing the financial statements through a
comparison schedule which compares the years 2014 and 2015. This allows the easy
assessment of the changes to key account balances that are directly affected by the
performance of service centres. The discussion is made with reference to figure 8 on the
next page.

45
Table 4.7 : Trial balance extracts comparative schedule

Extract trial balance as at 31/12 2014 2015 % change

increase/
(decrease)

Income
Canteen/meals/catering 5255 21048 300.53
College development fees 0 0 0
Computer levy 0 0 0
Production units/projects 47816.30 29100.50 (39.14)
Tuck shop sales 50372 12104.55 (75.97)

Expenditure
Canteen expenses 4108 0 (100)
Cleaning materials and sanitation 10572.60 14843 40.39
Kitchen utensils 2413 0 (100)
Learning/training materials 3299 6333.50 91.98
Project expenses 78928.75 44653.34 (43.43)
Repairs and maintenance 27355.66 17245.64 (36.96)
Staff development 0 6302 100
Uniforms and protective clothing 550 785.50 42.82
Vehicle repairs and running costs 80326.16 88094.21 9.67
Workshops and agriculture shows 11499 0 (100)

Other balances
Surplus/(deficit) 90335.08 88219.16 (2.34)
Accumulated fund 50657.59 59762.66 17.97
Cash at bank 59762.66 96011.87 60.66
Source: secondary data, 2017

46
The absence of any income towards college development and computer financing income
is adverse and worrying because this makes it difficult to acquire more computers in the
bid to adopt modern technology in SCs and other departments. The development of the
college is also key since it will also translate to development that benefit SCs operations.
Income from production units fell by 39.14% while income from tuck shop sales fell by
75.97%. This is unfavourable because it threatens the viability of these SCs even though
they are still contributing positively to income. Canteen services had its income increase by
300.53% which is a good outcome for the SC.

Canteen expenses and kitchen utensils dropped by 100% which is positive since it reduces
the overall expenses of KPP. Project expenses also dropped by 43.43% which can be related
to the corresponding fall in projects income, which shows in decrease in operations of
production units.

Repairs and maintenance expenses dropped by 36.96% which is favourable while vehicle
repairs and running costs rose by 9.67% which is unfavourable. Uniforms and protective
clothing expenses have increased by 42.82% and since this service is provided internally
this is a rise in the costs of the relevant SC, applied arts, which is unfavourable.

Staff development expenses rose by 100% and this is positive since more resources are
being committed to capacitating the employees manning the offices including SCs. On the
other hand workshops and agricultural shows expenses fell by 100% which means less
resources are being committed to workshops which are key to skills development and
training. Agricultural shows also provide exposure to external customers for SCs like the
horticulture in the technical division, and this exposure is being cut short. Training materials
expenses have increased by 91.98% which mean that more resources are being committed
towards training of students who are a key part in SCs within the technical division.

The surplus dropped by 2.34% which is considerable small amount since it is below $2500,
it however needs management attention to understand whether such a decrease is not
performance related and determination of action to prevent such adversities in the future
where possible. Accumulated fund increased by 17.97% while cash in bank increased by
60.66%, both are favourable changes and this shows good cash flows for KPP.

47
4.4 Chapter Summary

This chapter presented and analysed research findings from the study which includes an
analysis of the data which was collected from the questionnaires and interviews. The
information that was given by respondents seems to correlate to the information that was
found from the review of literature in chapter 2. From the analysis of the data gathered, it
shows that SCs have significantly achieved their purpose but there is still need to improve
on their performance and formulate strategies to address the challenges being faced by KPP.
The next chapter summarizes research findings, concludes the research and gives
recommendations.

48
 CHAPTER V

SUMMARY, CONCLUSIONS AND RECOMENDATIONS

5.0 Introduction

This chapter focuses on summarizing the research findings, making research conclusions
and making recommendations where possible. The summary of research findings will
concentrate on the outcome of the previous chapter in relation to the research objectives.
Research conclusions will be made on the findings of chapter four, recommendations will
be made to KPP on how to improve the performance and operational efficiency of SCs and
on strategies to address the challenges.

5.1 Summary of findings

5.1.1 Nature and purpose of SCs

The researcher found out that the purpose of employing SCs at KPP is to reduce costs,
reduce service completion time, enhance quality and improve efficiency. The main service
centres at KPP are accounting, human resources, administration and information
technology. There is also a setup where the technical division, besides from being an
academic division, act as SCs and provide services to the entire institution. The key motives
or purpose of establishing SCs in the technical division where identified as the need to
achieve self-reliance and self-sustenance and eliminate the dependency syndrome; and to
provide practical skills and exposure to the real world scenario to students in the technical
division. The need to benefit from concentration of expertize was also identified and to
facilitate easy monitoring, and control of processes.

49
The study also found out that the use SCs had positively impacted on some of the lead
purposes of employing SCs which are quality of service and overall performance of the
institution.

5.1.2 Benefits of using SCs

The lead benefits that where realized from the use of SCs at KPP where enhanced
operational efficiency, focus on customers and processes, addition to organisation’s
revenue, focus on core competencies and reducing cost. There is untapped potential to
increase the benefits enjoyed from using SCs. There are other benefits realized at KPP
which are clear organizational structure, easy access to information, quick decision making
within service centres and various infrastructure developments. The benefits which were
identified as not having been realized at KPP are reduce cycle time, addition to organization
revenue by the service centre and enhancing the overall performance of the organisation.

5.1.3 Factors promoting or hindering the use of SCs

The current economic climate that the country is facing, which pose serious financial
constraints on government, was mentioned as hindering the use of SCs at KPP. The
institution in turn does not get adequate finance to meet it budget requirements to finance
operations including SCs. The technical division is also affected by the economic condition
as it fails to attract and retain external customers for the services it offers. The lack in supply
of personnel from the central government employer was also hindering use of SCs due to
the freezing of posts by the government, thus personnel shortages were identified mainly
in the teaching staff. The centralization of decision making and bureaucracy in government
structures hinder the change process and flexibility is compromised thus making SCs rigid
and lake adaptability. The procurement cycle was cited as one SCs area that is directly
affected by rigidity and lack of adaptability due to bureaucracy. The poor labour supply
was also identified as a factor hindering the use of SCs.

50
5.1.4 Challenges in the implementation of SCs

The main challenges identified as being encountered in the implementation of SCs at KPP
were lack of organisational flexibility, complexity of the system, resistance to change and
long project completion timelines. Interview respondents also identified other challenges.
The institution only pays for services rendered by the technical division, in line with the
production policy, after normal working hours and the payment is also not consistent. There
is also conflict of interests due to clash between lecture time and production requirements.
The use of students who do not have experience threatens quality of service rendered. There
is loss of business due to bureaucracy within the system. There are also challenges
experienced in the procurement process which include slow processing of requisitions, lost
requisitions and bottle necks due to many procedures. The human resources department is
responsible for all personnel related issues which created a control challenge on punctuality
and accountability.

5.1.5 Best practices in the implementation of SCs

The only best practice that was identified as having been adopted in the implementation of
SCs at KPP is employing modern technology in operations. The respondents to the
interviews identified other practices employed at KPP. There is a reward system in line
with the production policy where for services provided by an academic department either
to internal or external customers, the department staff and students are rewarded in money
terms. There is also a work for your fees programme were students provide services to
internal and external customers and the rewards from such services go towards payment of
their fees. The practices that were identified as not being adopted in the implementation of
SCs are professional corporate governance methods and principles, use of formal
contractual agreements in service delivery to sister departments, restructuring of processes
that were previously performed at departmental level and standardizing them into SCs,
change management principles and methods, competent leadership and support from
management and continuous improvement.

51
5.2 Conclusions

Nature and purpose of SCs

The purposes of employing SCs at KPP are to reduce costs, reduce service completion time,
enhance quality and improve efficiency. The main service centres at KPP are accounting,
human resources, administration and information technology. There technical division
houses several SCs. The key motives for establishing SCs in the technical division are the
need to achieve self-reliance and to provide practical skills and exposure to students.

Benefits of using SCs

The key benefits realized from the use of SCs at KPP where enhanced operational
efficiency, focus on customers and processes, addition to organisation’s revenue, focus on
core competencies and reducing costs. There is untapped potential to increase the benefits
enjoyed from using SCs at KPP.

Factors hindering SCs

The current economic climate that the country is facing was mentioned as hindering the use
of SCs at KPP. Personnel shortages were identified mainly in the teaching staff. The
centralization of decision making and bureaucracy hinder the change process and flexibility
is compromised. The procurement cycle is rigid and lacks adaptability due to bureaucracy.

Challenges in within SCs

The main challenges faced are lack of organisational flexibility, complexity of the system,
resistance to change and long project completion timelines. There is conflict of interests
exists due to clash between lecture time and production requirements.

52
The use of students who do not have experience is a challenge and there is loss of business
due to bureaucracy. The procurement process has slow processing of requisitions. The
centralization of human resources supervision creates control challenges.

Best practices within SCs

The best practices that are not been adopted at KPP are professional corporate governance,
use of formal contractual agreements in service delivery, restructuring of processes and
standardization, change management, competent leadership and support from management,
and continuous improvement.

5.3 Recommendations

5.3.1 Adoption of best practices

KPP should consider the adoption of best practices in the implementation of SCs.
Continuous improvement of systems within SCs should be pursued to ensure that SCs
remain relevant and efficient. Corporate governance principles should also be adopted
within SCs to ensure that their operations are conducted in a professional and transparent
manner. Support from top management should be made available so as to provide direction
and guidance, and to boost the confidence of staff members.

The use of service level agreements may also be considered for SCs within the technical
division so as provide formal agreements stipulating the nature of service being provided,
the product standards expected and the responsibilities for both parties. This will allow for
quality control and holding the parties to their obligations.

53
5.3.2 Countering barriers to the effective use of SCs

The major barrier identified is the economic climate which translate to financial problems.
KPP should capacitate the SCs within the technical division to make them productive and
viable economically. The institution can achieve this by securing markets for the productive
departments e.g. clothing, agriculture, construction etc. this will ensure the departments can
support their capital requirements and also contribute income to KPP. KPP should also
accord some level of autonomy to the SCs within the technical division so that they can
operate as a separate organ that services external customers, generate its own revenues and
returns, controls its resources (within the oversight of organisation policies) and controls
its own efficiency and viability. This will also give the platform for the students and staff
members to learn practical real world skills of entrepreneurship.

5.3.3 Policy formulation, implementation and control

The formulation of policy which governs the conduct of SCs can be useful to KPP. This
articulates clear methods of operations and procedures. The process of policy formulation
should incorporate stakeholder consultations and collective effort from all interested
parties. Policies should also be reviewed frequently to allow for flexibility and adaptation
to changing user needs. There should be hands on implementation of the policies adopted
and control of operations to ensure adherence to policy. The productivity policy already in
place must also follow these suggested practices. Policy consistency should also be
emphasized and consistent application across the various SCs should be ensured. It is also
imperative that policy formulation ultimately conform to the mandate of KPP.

5.3.4 Overcoming challenges within SCs

KPP should consider simplifying the systems within SCs. Complexity of the system can be
addressed by using formal documents that explain procedure to follow or steps to take in
any given system setup.

54
For example the procurement process or accounting process can be clearly and neatly
written down into a user manual to allow user to easily refer to the manual in case of any
challenge. The system should also be continuously reviewed with consultation to ensure its
user friendliness. KPP should promote inter-departmental cooperation and collective effort
from staff members to ensure performance of SCs functions are not met with resistance and
smooth operation is achieved. Quality control and monitoring of work carried out by
students should be implemented to ensure that acceptable levels of quality are delivered as
students engage in hands-on learning.

5.3.5 Untapped benefits of using SCs

There is need to ensure that SCs contribute positively to the overall performance of KPP.
This can be achieved party by adopting a strict performance evaluation system for SCs that
aims at assessing the contributions being made by SCs towards the whole institution. A cost
and existence justification policy can also be adopted for SCs evaluation especially within
the technical division so as to ensure relevance of SC to the institution. There is need to
ensure that cycle time is reduced, be it procurement cycle or accounting cycle time, to meet
operational deadlines. This can be collectively achieved by multi stakeholder forums such
as workshops and evaluation workgroups which can allow for collective identification of
deficiencies and weaknesses, and suggestion of solutions.

5.4 Areas for further research

The research work done here presents several possible areas of further research. Firstly
further research could be done on the changing nature of SCs from being the traditional
centralized functions for common shared services to potential for business diversification
and strategic partnerships that can form a critical part of the core business. Secondly further
research can be on whether it is viable to have SCs as opposed to outsourcing the function
to specialist organizations, or to establish inter-organization shared service centres that
provide common function in multiple organizations.

55
Lastly research can also be done on performance measurement within service centres to
determine what standard measures would be appropriate to evaluate the work of SCs since
they are not always output or profit oriented parts of the organisation.

5.5 chapter summary

This chapter has looked at the summary, conclusions and recommendations. The
recommendations are not exhaustive and more can be added to them. If the above
recommendations are to be taken up it may positively impact the performance of SCs at
KPP. From this chapter it can be safely concluded that the use of service centres is of benefit
to KPP and for continued enjoyment of benefits from use of SCs, best practices must be
adopted and upheld and challenges must be countered timeously.

56
REFERENCES

Association of Chatered Certified Accountants, 2002. financial shared service centres:

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APPENDIX A

QUESTIONNAIRE for departmental staff

Dear Sir/ Madam

REF: REQUEST FOR RESEARCH ASSISTANCE

My name is Tichafara Ethelbert Marecha. I am a final year student at Bindura University

of Science Education in the faculty of Commerce, doing Bachelor of Accountancy Honours
degree and l am carrying out a research on “Utilization of service centres as a cost
reduction technique: a case study of Kushinga Phikelela Polytechnic” and I am kindly
asking you to help me by filling in this questionnaire. Your responses will be confidential
and your contribution will be greatly appreciated.

Key terms and abbreviations

Service centres: those functions that are performed by a centralized or specialist

department and consumed by all departments at KPP.

KPP: Kushinga Phikelela Polytechnic

Instructions:

Ticks in the box to express your response to each statement [√] were appropriate, and give
response in writing were space is given.

Section A: background information

1) How long have you been working for this organisation?

<2yrs 2yrs-5yrs 5yrs-10yrs 10yrs <

61
2) What is the highest level of an educational qualification do you hold?
None certificate Diploma post Bachelor’s Master’s
graduate Degree degree
diploma

(Tick)

Section B: Structured questions

1) What management related qualification do you hold?

None Management Academic Diploma Bachelor’s Master’s
training or or post Degree degree
workshop professional graduate
certificate certificate diploma
(Tick)

2) The following factors were the main reasons for adopting and employ service
centres at KPP. Do you agree?

Agree Disagree

1) to reduce costs
2) to enhance quality and improve efficiency
3) to reduce service completion time
4) to generate additional revenue

62
3) How has service centres at KPP affected the variables mentioned below?
Negatively no effect positively

a) operational costs
b) Quality of service
c) performance of the institution

4) Do you recommend KPP to continue using service centres, and why?

Yes No

reasons……………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………

5) The benefits mentioned below have been realised at KPP through the employment
of service centres. Do you agree?
strong agre neutr Dis- Strong
ly e al agre ly
agree e disagr
ee
1 Focus on customers and processes.

2 Reducing cycle time i.e. time taken to carry out

processes of service delivery.
3 Addition to organisation revenue by the service
centre
4 Efficiency in carrying out the functions being
performed by service centres
5 Reducing costs of providing the service

6 Enhancing overall performance of the

organisation
7 Allowing management to focus on the core
competences and mandate

63
6) The practices mentioned below have been adopted at KPP in the implementation
of service centres. Do you agree?

Strong agre Neutr Dis- Strong

ly e al agre ly
agree e disagr
ee
1 Professional Corporate governance methods and
principles
2 Employment of modern technology in operations
3 Use of formal contractual agreements in service
delivery to sister departments
4 Restructuring of processes that were previously
performed at department level and standardising
them into service centres
5 Change management principles and methods
6 Competent leadership and support from
management
7 Continuous improvement of processes in order to
adjust to diverse customer needs

7) The challenges mention below have negatively affected the performance of service
centres at KPP. Do you agree?
Strongl agre Neutr Dis- Strongly
y e al agre disagre
agree e e
1 Lack of organisations flexibility towards diverse
needs of customers
2 Complexity of the system
3 Resistance to change by various stakeholders
including employees
4 Lake of clear accountability and responsibility
within service centres
5 Over standardization of systems and processes
causing rigidness
6 Ineffective communication systems
7 Unexpected and unplanned operation costs in
service centres
8 Long project completion timelines
9 Rise in the costs of operation
1 Weak corporate culture that does not promote
0 adaptability and change

64
Section C: unstructured questions

1) Are there any other specific benefits that KPP has enjoyed from using service
centres?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………

2) What other challenges is KPP facing in the implementation of service centres?

………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………

3) What recommendations do you propose to address the challenges and barriers in

the implementation of service centres at KPP?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………

THANK YOU FOR YOUR COOPERATION

65
APPENDIX B

INTERVIEW GUIDELINES for heads of divisions

1. What are the main reasons for employment of service centres at KPP?

2. What are the processes that constitute service centres in the division?

3. Do you think service centres provide the best solution for reducing costs in provision
of shared services, and has service centres reduced costs?

4. Are there any practices/success factors that are followed in the implementation of
service centres?
5. What factors promote or hinder the use of service centres at KPP?

6. Are there any challenges being faced in the implementation of service centres?

7. What strategies are in place and what strategies do you recommend to overcome the
challenges encountered?

8. Should KPP continue using service centres? Give reasons.

THANK YOU

66
APPENDIX C

67
68