- HIT THE DECK
- Posts
- Overhauling Overheads
It’s budget season: you know the scene… that CFO email drops into your inbox with all the subtlety of a brick through a window:
"We need to cut costs by 10% - come prepared to next week's review"
Your heart sinks. Another year of defending "overheads". Another round of explaining why, no, we can't just "trim the fat". Another session of justifying why head office isn't just a bloated cost centre.
And then comes your favorite conversation: explaining to divisional MDs why their recharges are going up.
"So let me get this straight” they'll say, "Not only do I have no say in these costs, but you want me to take a bigger hit to my P&L?"
Central Services (left); Divisional MD (right)
But what if this year was different…?
THE PROBLEM: Why Head Office is such a ball ache
Whether your company calls it head office, central services, central overheads - it’s often a problem area. Here’s why:
#1 No one owns it.
Unlike a division with a clear MD and P&L responsibility, head office is fragmented. Every C-suite member has some budget tucked away somewhere:
CEO: Strategic projects
CFO: Finance operations
CHRO: People initiatives
CTO: Technology infrastructure
#2 Decision paralysis
This fragmentation creates a deeper problem: murky decision rights.
Take something as simple as office coffee:
Property owns the vendor relationship
HR owns employee experience
Facilities handles daily operations
Finance tracks the costs
Senior leadership sets the culture
Who makes the call?
This isn't just about coffee. The same complexity exists across the division - hot desking, IT service hours, office locations etc etc.
Property & Technology discussing who owns the desk-booking SaaS tool
#3 It’s all over the place
It’s a patchwork quilt of costs
Day-to-day operations
One-off projects
Strategic initiatives
Group-wide costs
All bundled together as one amorphous blob of spend.
#4 Recharge nightmares
“Why should I pay this Tech charge? It took my team months to get new laptops!”
Every division hates paying for head office. Every recharge discussion becomes a battle.
#5 it’s just unsexy.
It's seen as just a cost centre - a rock dragging down profits when you glance at the consolidated accounts.
To summarise…
Head office proposes a unique challenge. With no single owner, it becomes:
Everyone's problem but no one's priority
A target for cuts but never for investment
Viewed as a cost drain but not a lever for growth
THE REFRAME
So we've established head office is a mess. A fragmented, expensive, hard-to-manage mess that no one really owns.
But before we dive into solutions, we need to fundamentally rethink how we view head office. Not as a problem to be managed, but as a solution to be improved.
Here's the paradigm shift that changes everything: Head office isn't a cost centre - it's a collection of service centres.
Think about it: No organization spends money for fun. They spend it to solve problems and meet needs. Every area of head office delivers services to your company - whether through internal resources or third-party providers.
Now whether that service is done well?? That is fair game for debate.
Take a simple example
FUNCTION: Technology
TEAM: Service Delivery
SERVICE: IT Service Desk
BUSINESS NEED: Employee productivity relies on working laptops. Laptops break. When laptops break, employees need help from IT to get them working again.
This hierarchy is structured by the atomic unit of the division - business needs.
Business Needs: the fundamental problems and requirements of the organization that must be addressed
↓
Services: specific solutions deployed to address these business needs
↓
Teams: groups assembled to deliver and manage these services
↓
Functions: teams organised by related capabilities & expertise, delivering connected services
And this is where finance - specifically FP&A - can grab the nettle and deliver value.
THE OPPORTUNITY
Why? Because we:
See the full picture across functions
Understand the interconnections between services
Have relationships with all stakeholders
Speak both operational and strategic languages
Most importantly - we can cut through the complexity to drive clear, aligned decision-making
This void is your opportunity. With cost pressures, digitial transformation and AI being the answer to every workplace problem, the timing has never been better.
So where do we start?
THE BLUEPRINT
We start at the top.
A modern head office typically includes:
Technology
From keeping the lights on to driving innovation
Infrastructure to end-user computing
Security to digital transformation
Property
Not just buildings, but entire workplace ecosystems
From facilities management to front-of-house
Real estate strategy to project delivery
Core Support
Finance, Legal, HR, Comms
The essential services that keep business running
Both operational and strategic support
Value-add
Strategy, Change & Transformation, PMO
Driving future growth
Managing complex change
Executive
C-Suite, Board
Corporate governance
Strategic leadership
Group-wide Costs
Costs incurred centrally but driven by the whole Group
Share schemes, long-term incentives
Corporate insurance
Each has its own sets of nuances & challenges, but building a deeper understanding enables you to be in the box seat of shaping what the future of whole division looks like.
NEXT STEPS
Over the coming weeks, we'll deep dive into each function, including
Transforming cost lines to service catalogues
Value measurement frameworks
Real-world examples
Implementation playbooks
But before we jump feet first into these next week, here are three things you can do right now:
WHAT YOU CAN DO TODAY
Map One Service
Pick a service you know well (like that office coffee)
Document who's involved
List out the actual business need it serves
Note any gaps in your knowledge - could you explain it to your CEO?
Slice & Dice
Pull your latest head office cost report
Group costs by service (not cost centre)
Identify areas where you're unclear what service is being provided
Mark which costs are truly head office vs group-wide
Start conversations
Ask one of your stakeholders how they organise their service delivery
Find out their biggest pain points in delivering these services?
Find out their biggest challenges in explaining their services to management?
Learn to understand the business through their world view.
Next week, we’ll be back - starting with Technology - the function that touches every part of your business.
Ready to grab the nettle? Drop a comment below sharing your biggest head office challenge. Let's tackle this together. 👇