Page 67 - BA1 Integrated Workbook STUDENT 2018

The contemporary transformation of the finance function

Outsourcing the finance function

2.1 Introduction

For most organisations, financial services are non-core and there
are benefits from outsourcing some or all of these services.

Benefits include:

 Cost reductions.

 Higher quality service provision.

 Can focus on core competencies that add value.

2.2 Internal outsourcing

Internal outsourcing involves the consolidation of an organisation’s
finance activities to one site or shared service centre.

Advantages Disadvantages

 Headcount reductions.  Fall in staff morale.

 Reduction in cost of premises.  Cost of redundancies.

 Systems consolidation.  Lack of systems integration.

 Tax savings.  Major set up costs.

 Favourable labour rate.  Full outsourcing may be a better
option.
 Improvements in quality.

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