Performance, efficiency and productivity take the spotlight of any open thought or brainstorming session in pursuit of growth. Especially so during times faced with challenges from new and unfamiliar effects (yes, like the boring grim pandemic we can’t wait to get it over with). One way or another, these point to one important metric, the operating costs. Decades ago the most popular solution to keep the operating costs low was the concept of ‘economies of scale’. It revolutionalised the industrial age.
Now, in the age of information and technology, or ‘Information technology’ (as tech geniuses would call it), the performance, efficiency and productivity form a large part of the equation to optimise Operating Cost and scale the business.
Here are a couple of Common growing pains for Accounting Practices and businesses in the services space,
- With limited time to get the job done, your resources get pulled in several directions, stretched thin: Building capacity, driving up efficiency and increasing productivity is a key goal. The driving factor for growth in a competitive environment is built around the idea of getting the most out of your resources. But with limited time at their disposal and too many things to juggle your current talent pool has a lot to do.
- Lost opportunity cost of Flagship services (vCFO and other strategic advisory services): A common problem for Accounting practices is that, your team is busy in working IN your business rather than ON it. Compliance and admin work drains the time that could have been spent on client-facing activities. That leaves your workforce short of time for high-margin strategic advisory work including the sought after vCFO services. Outsourcing can give you the time to grow and while having your offshore team handle the critical non-client-facing tasks. This not only puts the time at your disposal, it also increases your capacity to take on more work and drive more revenue for your firm.
- Mismatch in the local availability of talent and price expectations of your customers: As the client’s most trusted advisor your strength for your client is your experience in handling the financial records and compliance in line with the government’s regulations and constant amendments. The problem is, many individuals business owners are forced to make do with solutions they can find. With growing client needs, the fulfilment system comes under constant stress. Client expectation from their accountants/trusted advisors in terms of value for money has seen an increase in the recent times. Your workforce expects for challenging and rewarding work, balancing these scales is a challenge for growing accounting firms. Admin work and compliance eats into the time that could be set aside for high-value functions.
How else can outsourcing help?
Some of the benefits of outsourcing are very noticeable and some are inconspicuous.
For instance, outsourcing makes it possible to scale your business and mitigate the need for the massive investments involved with building capacity and the infrastructure to support this ecosystem.
Change is a lot of work
A Novel example
The healthcare emergency showed how quick businesses can adopt solutions to keep up the productivity despite challenges including travel restrictions, social distancing and etc. This unprecedented global change disrupted economies, businesses and lives of users and contributing work force.
Businesses experienced that work from home measures had an unexpected positive outcome; savings in the form of cost and time. The takeaways from this unpreparedness to adoption can be summed up as changes in the following,
- The way we work
- The potential to increase efficiency in the long-term.
- Willingness to explore new solutions.
- The ability to adopt digital technologies
- The rise of work force operating from home
The quick adoption rewarded many organisations with signs of productivity gains and savings.
The above situation offered an equal risk and opportunity to all businesses including your competitors. A key element to consider when considering outsourcing is the impact outsourcing can on your competitive advantage in the marketplace.
What are the risks?
Every successful leader arrives at a strategic dilemma. Having reached maximum capabilities with the current resources, a familiar predicament when looking to up the performance one level would be: why consider outsourcing?
“Doing the same thing over and over again, but expecting different results” is just not very progressive. Tried and tested processes are the safest way to the finish line as long as the performance metrics do not matter. It gets you to the finish may be in-time too.
On the flipside, if you are unsatisfied with your current position, begin to explore the solutions to improve your position. The spark for most who started outsourcing and succeeded was this question, “if there is a competitive advantage and it can help optimise the costs and resources, then why not”?
Boobalan Madhavan | AccSource | www.accsource.com.au
48/237 Miller Street,
+ 61 406 727061