What is a Shared Service Centre?

What is a Shared Service Centre?

• A. Internal Outsourcing
• B. Centralising operations that existed in more than one part of the organisation
• C. External Outsourcing
• D. Fragmenting operations

Answer: (B)

A Shared Service Centre is an internal unit that centralises routine, high-volume activities that many parts of the organisation previously did separately. By bringing tasks like payroll, accounts payable, HR admin, or IT support into one central service, the company gains scale, standard processes, and tighter control over quality and costs. The services stay inside the organisation, but they are delivered from a single centre rather than replicated in every division. This is different from outsourcing to an external provider, and it’s not about splitting work into many separate parts; it’s about consolidating to a single, efficient internal hub.

A Shared Service Centre is an internal unit that centralises routine, high-volume activities that many parts of the organisation previously did separately. By bringing tasks like payroll, accounts payable, HR admin, or IT support into one central service, the company gains scale, standard processes, and tighter control over quality and costs. The services stay inside the organisation, but they are delivered from a single centre rather than replicated in every division. This is different from outsourcing to an external provider, and it’s not about splitting work into many separate parts; it’s about consolidating to a single, efficient internal hub.