Outsourcing ‘Continues to Prove Popular’

Posted By Editorial Team|Sage UK| 17th April 2012

Outsourcing services remains popular with companies, as legal firms have reported an increase in clients renegotiating contracts with third party providers.

This is according to partner at KPMG Lee Ayling, who explained the 2012 Legal Pulse survey revealed the top 30 companies in this sector claim to be “busier than they have ever been”.

The expert described how the reason for the increase in workload was said to be due to firms focusing on maintaining or expanding their outsource requirements.

Mr Ayling stated: “They are involved in supporting their clients on the renegotiation of outsource contracts or on the procurement of additional services that were going to be provided under an outsourced agreement.”

The current economic situation may have led to many organisations moving towards using third party providers rather than hiring additional staff to complete day-to-day tasks.

For example, payroll outsourcing may appeal to small firms that cannot afford to pay for a full-time employee to deal with this side of the business.

In a bid to stay afloat and survive the challenging economic market, some companies may cut back on their staff numbers and turn to outsourcing as a means of reducing expenditure.

Mr Ayling noted in some cases, businesses are looking to extend their contracts with third party providers, so even more tasks are dealt with by an outside company.

It was suggested this increase in scope is more likely to happen as organisations “become more comfortable with services delivered by an outsource provider”.

The specialist described how in many cases businesses dealing with outsourcing systems such as HR and payroll solutions will not be based in the UK or Europe.

Mr Ayling explained services can be delivered from as far away as India and this can influence whether a firm will opt to use a third party provider.

He commented that when organisations become “more comfortable with services being delivered in that model”, they are more likely to consider handing over more of their administrative tasks to outsourcing companies.

Martyn Hart, chairman at the National Outsourcing Association, recently claimed freelancers are one work sector that is bound to benefit substantially from paying another company to focus on day-to-day administrative tasks.

“Debt collecting and bookkeeping are not billable hours and time spent on these activities could be better spent delivering your saleable service,” he remarked.

It was suggested freelancers should focus on delivering their products and perfecting their skill, rather than reject work as they have to balance their accounts.