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ACCA Strategic Professional · Strategic Business Leader · Finance transformation

Brindle Foods has a shared service centre handling accounts payable for four divisions. Management wants to decide whether to keep the activity in-house or hand it to an external provider while retaining control of the outcome. Which description correctly distinguishes the two options?

A shared service centre is owned by the group and serves its own business units, while outsourcing transfers the activity to an external third party under a contract. Both centralise work, but control, ownership and risk differ, so they are not identical.

  1. AAn SSC is owned by the group and serves its own units, whereas outsourcing transfers the activity to an external third party under a contractCorrect
  2. BAn SSC always serves external customers, whereas outsourcing is always internal
  3. CBoth are identical because the activity is centralised in each case
  4. DOutsourcing keeps the activity inside the group, and an SSC places it with a supplier

Explanation

A shared service centre is an internal, group-owned unit serving group businesses, while outsourcing places the activity with an external supplier under a contract and service levels. The other options reverse or blur this distinction.

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