Outsourcing & Shared Services Business Cases: Baseline Costs, Vendor Pricing, Transition Costs, Retained Organisation & Payback
Decide with numbers whether to move a back-office function to a provider or a shared service centre: the in-house baseline, per-FTE and per-transaction quotes, a location mix, transition and dual-running costs, the retained team, service credits, payback, NPV and a sensitivity check, with every cell checked as you go.
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About this course
This course builds a complete outsourcing business case for a fictional accounts payable team. You calculate the in-house baseline with loaded costs, space, IT and management overhead, then turn three provider quotes – per FTE, per invoice with volume bands and a minimum charge, and fixed plus variable – into comparable annual prices with ROUNDUP, XLOOKUP and MAX. You blend delivery locations with SUMPRODUCT, add knowledge transfer, dual running and contingency, cost the retained organisation and governance, and apply capped service credits. Finally you find the payback month, the NPV, the break-even volume and a tornado-style sensitivity chart. Every cell is checked as you go.
Lessons
- The In-House Baseline: FTEs, Loaded Cost, Overheads & Cost per Invoice Pro
- Vendor Pricing Models: per FTE, per Transaction with Volume Bands, Fixed + Variable & Minimum Charges Pro
- Location Mix: Splitting Work across Delivery Locations A, B & C and the Blended Cost Pro
- Transition Costs: Knowledge Transfer, Dual Running, a Severance Placeholder & Contingency Pro
- The Retained Organisation & Governance: What Stays In-House and the Future Run Cost Pro
- Service Levels & Service Credits: Met or Missed, Credits, the Cap and the Net Fee Pro
- The Business Case: Yearly Savings, Cumulative Cash, Payback Month & NPV Pro
- Sensitivity & Decision: Volume ±20 %, Price Swings, Break-Even Volume and a Tornado Chart Pro