A captive shared services organization is a wholly-owned subsidiary of the organization to which it belongs and has no external customers. This means that the parent organization controls the processes and technology the shared services organization employs to deliver services. The SSO’s governance structure is confined to officials of the parent organization and the parent organization together with the shared services center make decisions about capital investments for the SSO. However, just as the shared services organization is captive to the parent organization, customers are captive to the shared services organization. Being a captive shared services organization and having a captive customer base simplifies things considerably for the shared services organization. Instead of multiple customers with sometimes competing demands, the SSO has only one customer, the parent agency and its business units, to satisfy. And business units are not free to go elsewhere for services offered by the SSO although the SSO may well outsource some of its services. But what is a positive for an industry shared services organization can be a negative for a government shared services organization.

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