As working remotely becomes the new normal in a world with COVID-19, finance leaders can rely on a judicious combination of external expertise and robust technological platforms in order to meet business continuity needs.
Outsourcing is not a new concept for most businesses. Business leaders and CFOs usually consider outsourcing arrangements for various reasons, with the most common being to overcome the challenges of high staffing costs, to surmount difficulties in finding skilled resources in the local market, and to provide additional support during peak workload periods.
The rapid global spread of COVID-19 has created unprecedented challenges for CFOs, who are having to constantly recalibrate their operating model in order to navigate the turmoil that the crisis is leaving in its wake. Since the beginning of the pandemic when national governments began applying travel restrictions, physical distancing measures as well as full-scale lockdowns, it quickly became evident that the need to transition to a remote work environment was imperative for business continuity and indeed future growth.
Grappling with the ‘new normal’
As companies mobilised to ensure staff safety and business continuity, in-house Tech and Compliance teams were put under extreme strain as they grappled to grasp and fulfil the unexpected IT requirements while still ensuring that relevant controls and data security were not compromised.
As the impact of the crisis continues to unfold, a lot of businesses are still struggling to resume ‘BAU’ and have been unable to execute their contingency plans to their full extent. Some businesses are still facing disruption in client servicing and require immediate capacity support for critical functions in order to provide a release valve to their local staff.
For many businesses, recovery is expected to be long and painful. CFOs are therefore increasingly focused on looking at ways to create efficiency within internal functions while ensuring proper capacity planning to take on new business projects and initiatives. This crisis has also underlined the need for robust technological platforms to allow automation of certain key functions.
Why is outsourcing even more relevant now?
As organisations struggle to manage existing resources at full capacity in a remote working situation, it is clear that outsourcing can bring much needed relief along the following lines:
- Sharpen focus on core areas: By pivoting to an outsourcing arrangement for certain functions, such as accounting and compliance, CFOs can focus on areas that yield higher margins while having peace of mind that these back-office functions (which are considered high maintenance and non-core) are being taken care of in an efficient and timely manner. This approach will also allow companies to dedicate more local resources to regulatory matters such as complying with economic substance requirements.
- Reduce capital outlay on staff: Outsourcing allows companies to access technical expertise while reducing the need for capital outlay. This is even more important in times when businesses are having to deal with a dispersed workforce that is not operating at full capacity.
- Allow flexibility in meeting staffing needs: Having an outsourcing model that sits alongside the core team provides companies with the flexibility to upsale and downscale outsourced staff depending on business exigencies.
- Access high-end technology at reduced cost: Companies are able to leverage the investments that outsourcing service providers have made in high-end technology and secure networks to ensure the robust and efficient processing of data without the need to invest in any in-house software.
- Support business continuity needs: Resources in an outsourcing model become an extension of a company’s core team and provide the benefits of having a disaster recovery centre that sits in a different location.
What it means for CFOs
Even before the COVID-19 crisis broke, the modern workplace was showing promising signs of change. CFOs were already innovating with new and flexible labour models – prompted by a combination of cost criteria, the shifting landscape of technological disruption, the changing generational expectations of a millennial workforce and the need for agility to take advantage of new business opportunities.
However, what may have been tentative experimentation before COVID-19 has now become a pressing need that organisations can no longer afford to ignore and, in fact, would be well advised to fully leverage. This pandemic has sown the seeds of an unprecedented opportunity to evaluate new and diverse staffing strategies and open the doors wide to innovative technologies that can forever increase the agility and resilience of the organisation.
Get in touch
Please contact me if you wish to discuss how IQ-EQ could support your company’s outsourcing requirements:
E: [email protected]
T: +230 213 9902