Page 67 - E1 Integrated Workbook STUDENT 2018
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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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