At HJS Accountants we can provide businesses in the Southampton area with help and advice. The following outlines the pros and cons of outsourcing core functions.

Outsourcing non-core operations has become very popular in recent years. Businesses now routinely outsource processes from cleaning to customer enquiries.

Other common areas for outsourcing include: payroll functions; human resources (insurance, recruitment etc); marketing; information and IT systems; and delivery.

The advantages

There are obvious potential benefits:

  • Management is free to concentrate on the core business
  • The use of resources, including human resources, is streamlined and more focused
  • Cost savings are achieved through economies of scale
  • Both risks and rewards are shared
  • Quality of service benefits from specialisation
  • Budgeting costs becomes more reliable in these areas because they are tied into contractual agreements.

Possible pitfalls

But there are also disadvantages to outsourcing:

  • Your customers do not draw a distinction between the core services that you provide and the outsourced services supplied by others, so any shortcomings on the part of the contractors reflect on you.
  • Some companies have also experienced dissent and demotivation within their own ranks as a result of outsourcing functions such as IT to contractors who do not share the same corporate culture and so do not treat employees in the way they expect to be treated.

A question of balance

As with most things outsourcing is a question of balance. For most businesses there will always be operations they can safely put in the hands of others and achieve both improved efficiency and cost savings.

But equally there will also be operations over which they will want to retain control. The art of good management is to know which is which! We can help you make the right decisions.

If you are in the Southampton area and would like professional assistance from experienced accountants and business advisers, contact HJS Accountants.

Southampton Office

12-14 Carlton Place
Southampton
Hampshire
SO15 2EA

Tel: 02380 234 222

Winchester Office

6 Charlecote Mews
Staple Gardens
Winchester
SO23 8SR

Tel: 01962 842000

Reading Office

3 Richfield Place
Richfield Avenue
Reading, Berkshire
RG1 8EQ

Tel: 0118 9511 115

London Office

90 Long Acre
Covent Garden
London
WC2E 9RZ

Tel: 0203 470 0777