Which of the following is an alternative to outsourcing?

• A. Shared services organization
• B. Expanding in-house payroll
• C. Increasing supplier monitoring
• D. Reducing automation

Answer: (A)

Centralising internal delivery of common services into a shared services organization is a practical alternative to outsourcing. A shared services center brings together functions like payroll, HR, finance, or IT for the whole business and runs them as a single, standardized operation. This setup aims to achieve economies of scale, reduce duplication, and improve consistency and control, while keeping activities inside the firm rather than handing them to external providers. It offers the efficiency and cost benefits of outsourcing in some ways, but with internal governance and alignment to company policies. Expanding in-house payroll stays within one function rather than creating a centralized, multi-function service hub; increasing supplier monitoring is about managing external providers rather than choosing how to deliver services; reducing automation would typically undermine efficiency and isn’t an alternative to outsourcing.