Shared services vs outsourcing: the multi-site choice

Key takeaways

Shared services vs outsourcing is a choice between centralising back-office work inside your own business and handing it to a provider. For multi-site or multi-brand SMEs, a shared service team removes duplicate admin at each site. Outsourcing goes further on cost and cover. Many businesses centralise first, then outsource the standardised parts.

• Shared services: one in-house team serving every site or brand.
• Outsourcing: a provider runs the centralised work.
• Shared services: removes duplication and keeps control.
• Outsourcing: adds lower rates, cover and flexibility.

What is a shared services model?

A shared services model moves common back-office work, such as finance admin, HR admin, purchasing and customer service, out of individual sites or brands into one central team that serves them all. The team stays in-house; the gain comes from standard processes and removing duplicated roles.

• In-house vs outsourcing: which model is more cost-effective?
• Opening another site? Centralise admin first

What does shared services save?

Savings come from removing part-time admin at each site and running one standard process. If four sites each carry 15 hours a week of admin, 60 hours in total, a central team with standard processes may do it in 45. That saves about 780 hours a year, around £14,400 at £18.45 per worked hour, before any change of location.

• Staff utilisation rate: the cost of paid idle time

How does outsourcing compare?

Outsourcing the same centralised 45 hours a week at an indicative £12 per hour costs about £28,100 a year, against about £43,200 for the in-house shared team at £18.45 per worked hour, before overheads. It also brings cover and flexibility. The cost of outsourcing is a little less direct control over the central team.

When should shared services stay in-house?

When central work needs deep knowledge of each site, such as complex job costing, or when regulation or client contracts require the work to stay within your own organisation. It is also a sensible first step before outsourcing, because it forces processes to be standardised.

• Document your processes before you outsource

When should the central team be outsourced?

When processes are standard and documented, volumes vary between sites or seasons, and you need extended hours. Outsourcing the shared team, or parts of it, adds the rate saving and cover on top of the centralisation gain.

• BPO Solutions for UK businesses

What makes centralisation fail?

Sites that keep their own ways of working, unclear service levels between the central team and sites, and no single system. Agree standard processes and response times with site managers before moving work, and measure them monthly.

• BPO SLA examples you can adapt

Which functions suit shared services first?

Start with functions that are similar at every site and easy to standardise. Leave site-specific work, such as local supplier relationships or on-site staff management, with the sites until the central team is working well.

• Supplier invoice processing and payments admin.
• Payroll collation and HR admin.
• Customer email and booking admin.
• Management reporting across sites.

• In-house vs outsourced accounts payable

What does this look like in practice?

A pattern we see in UK hospitality groups: each venue manager handles supplier invoices, rotas and bookings admin. Centralising these into one process, run by a managed team, frees managers for the floor and gives head office one view of costs.

• See client work

Shared services checklist

Use these steps to plan.

• List admin tasks and hours at each site.
• Standardise the process across sites.
• Agree service levels with site managers.
• Cost an in-house central team and an outsourced one.
• Move one process first and measure it.

Next step

Tell us your sites and the admin each carries. We will cost shared services in-house and outsourced in a 30-minute call.