Almost all respondents to the survey, which included more than 70 finance directors and was conducted by technology law firm Tarlo Lyons, said the extra expenditure was driven by business expansion.
The most commonly outsourced functions are IT support, treasury and finance.
However, Tim Couldrick, a partner at the firm, warned that outsourcing is not straightforward. He said: ‘Long-term outsourcing contracts have been likened to a Los Angeles marriage. More effort appears to go into the establishment of the pre-nuptial agreement than in doing the necessary groundwork to ensure that the relationship is viable.’
He added that is was clear the outsourcing market was expanding. But he warned outsourcing providers, which include accountancy firms and specialist companies, that more than 60% of users had changed their service provider in the last five years. ‘Performance is easily the largest single factor in the decision to change,’ he said.
The majority of respondents were very satisfied with outsourcing but most may not renew their existing suppliers.
An Accountancy Age/Reed Accountancy Personnel Big Question survey in January revealed that more than one in ten finance directors were considering outsourcing more of their company’s finance function in the next two years.
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