25th August 2017
Kathryn Moran, haysmacintyre
Partner and Head of Outsourcing, Kathryn Moran, at MSI's London based accounting member haysmacintyre, writes for CEO Today Magazine about the fundamentals of outsourcing and the benefits it can have for time-poor CEOs.
Outsourcing is now a mainstream agenda item for key decision makers to consider in businesses of all sizes. It encompasses a broad range of services, business, production and manufacturing processes. The development, growth and maturity of the outsourcing market, together with the advent and rapid development of technology means that outsourcing is no longer just a cost-saving consideration. It is a critical component of the risk management toolkit.
Businesses, from growing start-ups through to international corporations, often stand to gain more from the breadth of skills and expertise that outsourcing can provide than through direct hires. Of course, outsourcing can save money and time, allowing key decision makers to concentrate on vital processes and strategic plans, but costs should not be the over-riding driver in the decision.
The outsourcing market is one that is constantly evolving with new entrants emerging and developing technology changing the landscape. For time-poor CEOs looking to get the maximum out of their staff and streamline their business, outsourcing various elements and processes is definitely worth considering – but what are the key factors to bear in mind?
Identifying functions to outsource that are not strategically important is crucial. These will differ from one business to the next. Elements of the business that give you a competitive edge should not be outsourced, and often repetitive or more administrative tasks are better suited. We always advise outsourcing elements of your business that you understand, so that you can keep control and measure the performance of the provider.
To help with this decision it can be helpful to look at what you are hoping to achieve through outsourcing and then work backwards – what improvements do you want to make? If you are aiming to strengthen resource, improve your service and performance, manage risk and/or achieve cost savings, your outsourcing programme should reflect this.
Outsourcing functions such as accounting, IT, business digitisation, legal or HR means the responsibility to keep abreast of legislation and industry advancements lies with the provider, not the business. Although the ultimate responsibility for compliance with legislation still rests with the business, day-to-day it’s reassuring for many to know that external specialists are also engaged. Mirroring the right skills with the right tasks greatly increases the chance of the outsourcing being successful and a viable business decision.
Considering the various outsourcing offers in the market and comparing them is useful – overseas firms continue to offer competitive pricing where their employment costs are lower. However, the advances in technology have meant that some services in particular are now accessible by businesses in the UK, as price points have changed with efficiencies gained through technology. Businesses now have ready access to a wide range of outsourcing solutions and talent both at home and overseas. Language and culture continue to be considerations for businesses, and foreign firms have responded to this by investing heavily in the training of their own workforce. The risk of currency fluctuations when choosing to outsource overseas should also be considered.
Read more about Outsourcing: What you need to know
haysmacintyre are a full service, award winning mid-tier firm of Chartered Accountants and tax advisors in central London, providing advice to entrepreneurs, fast-growing and owner-managed businesses, charities and not for profit organisations across the UK and internationally.
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