DISCUSSION TOPICS

CENTRAL SERVICE FUNCTIONS

EVOLUTION AND REVOLUTION

A discussion paper on the problem of the ever changing nature of central service provision and some help in identifying where you are in the cycle.

GROWTH IS VITAL BUT SO IS PRUNING

THE STAGES IN THE LIFE OF A CENTRAL SERVICE FUNCTION

1. IDENTIFICATION OF POTENTIAL ECONOMIES OF SCALE
2. CREATION OF CENTRAL SERVICE FUNCTION
3. EXTENSION OF ACTIVITIES
4. COST GROWTH
5. ALLOCATION OF COSTS TO OPERATIONAL UNITS
6. DISPUTES OVER ALLOCATION METHODOLOGY
7. SERVICES CHARGED FOR

• AS PROVIDED

• AT AGREED LEVELS

• AT AGREED PRICES

8. DISPUTES OVER FULL/MARGINAL PRICING
9. TRANSFER PRICES SET BY CENTRE
10. OPERATIONAL UNITS SOURCE FROM THIRD PARTIES
11. IDLE RESOURCES AT CENTRE
12. CENTRAL UNIT DISBANDED/DISPERSED/OUTSOURCED
13. SEE 1. ABOVE.

THERE IS NO SOLUTION - BUT UNDERSTANDING THE GAME HELPS