Koncordel plc is an information technology company. The company provides a portfolio of information technology services. The services provided by Koncordel include software development, software integration and maintenance, and mobile application services. Koncordel currently has its business set up in seven different countries. Each business unit is independently handled by its own business leader who is responsible for the end-to-end project delivery cycles. The business leader of each unit is equipped to handle all the operations related to the unit independently. The company is performing well and is planning to expand its services to three more countries. Apart from their core business function, each of the seven business units of Koncordel has the following departments.
• Payroll department – The payroll department of Koncordel manages the payment of wages to its employees, wage deductions and the maintenance of records relating to wages.
• Order management and billing department – The order management and billing department of Koncordel manages the orders that Koncordel receives for its products. The department also generate invoices that are sent to its customers and keeps track of invoice payments that are overdue.

• Accounting – prepares the financial statements of the business unit in compliance with the accounting framework. The department also prepares cost accounting statements to determine the profitability of the services offered by the business unit.
• Workplace security – provides security to the office premises and the personnel of the business unit.
• Training – provides on-the job training to new employees as well as to existing employees.
• Legal – makes sure that the business unit follows laws and regulations.
• Customer support – provides maintenance and after-sales services for its products.
• Facilities – plans, designs and maintains the infrastructure of the company.
• Technical support – resolves technical issues with desktops and laptops used by employees of the company. In the current year, Koncordel has recruited a new vice president. The vice president is very happy with the performance of the company. However, to improve efficiency and reduce costs, the vice president has suggested that some of the departments of the company can be organized into a shared service centre or can be outsourced.

Required
1. Based on the new vice president’s inputs, the senior management of Koncordel is planning on developing a strategy to develop shared service centres and outsourcing non-core operations. Based on the activities performed by each of the departments, identify those that can be organized into shared service centres and the departments that can be outsourced.
2. Koncordel is planning to develop shared service centres for some of its departments. Explain the pricing issues faced by shared service centres.
3. Koncordel has decided to outsource the activities of some of its departments. Explain the advantages of outsourcing. Comment on the outsourcing of the activities of Koncordel’s accounting department.