Do not waste money and time just outsource!

10 Jun

As a result of the financial crisis now more and more companies are trying to reduce their operating costs by finding a cost-effective access to new technologies that would enable them to easily adapt to the unstable business environment. How you can imagine the easiest way for them to achieve that is by outsourcing. Hudson & Yorke mentioned that common industrial estimates show that outsourcing provides banks with savings of around 20-40%. That is why it is very clear that financial organizations would continue to invest further in outsourcing services.

In his recent post “How Outsourcing Payroll Services Can Save a Company Money” Jamie Simpson states the various advantages of outsourcing. How he and many other professionals suggest, the main benefit from outsourcing payroll services is the decrease in costs, when payroll is no longer completed inside the company. When firms want to complete these services by themselves they would need to purchase expensive hardware and software, that first – have to be updated on regular basis and second – employees have to be trained in order to work with this software. By outsourcing companies can forget about these disadvantages. Another very important benefit stated by Simpson is the time saved. By outsourcing, managers and employees can concentrate on far more important duties.

Stuart Drew mentions in his post “The true cost of outsourcing in Financial Services” that not only cost and time saving are the benefits of outsourcing, but also contractual flexibility and professional services are becoming more important to the Financial Services industry. To prove his opinion he gives a very illustrative example with one of the world’s top 25 banks, namely London-based Barclays bank, which has expressed its commitment to offshoring. He also says that the most outsourced processes by financial services institutions are IT, followed by call centres and HR. Another interesting argument that Stuart Drew gives in support of IT outsourcing by banks is that by doing so, they are able to react quickly to the regulation requirements and risk management, as means of providing capacity. How he mentions in the last sentence of his blog post, it is very likely for outsourcing to become the main practice adopted by companies and financial institutions.

How you can understand from the opinions of business professionals, outsourcing business processes, especially in the financial sector, is becoming a tendency that companies would have to follow if they want to survive in the intense business environment. So next time when you cannot decide which software to purchase for your HR or Financial department, just quickly open your search engine and write down “outsourcing”, maybe you would find an easier and cost-effective way.

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One Response to “Do not waste money and time just outsource!”

  1. angiethiem June 13, 2011 at 5:04 pm #

    The topic seems to gain a lot of importance and standart nowadays. I just read Sophie’s blogpost about cloud computing (http://agirlsbusiness.wordpress.com/2011/06/12/cloudy-with-chance-of-success/#more-655), which talks more or less about the same system. Even in my pricvat surrounding I get to hear more about projects likes this (so my mum hired e.g. a sperate firm for the payroll accounting ) and I wondered why the subject is rising so fast. Thanks to your post I get to understand the advantages and started to have an opinion… More or less I can say, that the system seems to be really efficient and may have even more hidden and detailed advantages. Though I personally don’t like the development, because less people will be actually employed in the firm and success will be more and more important for each single individum. Otherwise – next outsource! Personal relations and trust will get lost on the way….
    Anyway – good topic, nice post! Well done

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