Traditionally, Cost Centers were used to allocate costs to different parts of the organization. The newer concepts of Profit Centers also include the revenue side. Service Centers extend this concept sometimes giving internal organizations the option to aquire services internally or externally - so a Service Center could actually external as outsourced.
Compiere provides a variety of options to model these concepts. At the center is the Organization entity. In Compiere, you can create unlimited organizational entities. You can define and differentiate different types of organization (Division, Store, Legal Entity, ...) and maintain multiple organizational hierarchies (ownership, logistics, reporting, ...). Organizations can be linked to (external) Business Partners for easier management of legal entities as well for outsourced service organizations.