3 minute read 26 Mar 2020
Surfer riding a wave at Uluwatu Indonesia

How managed services can free you to go out and create waves

By

Paul Clark

EY Global Managing Partner – Managed Services

Leader of change. All-in on helping clients achieve their vision. Proud husband and father. Sports fan.

3 minute read 26 Mar 2020

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More business leaders are looking at the head office as a place to unlock value and maintain competitive advantage.

“We don’t compete on how great our finance or tax function is – but if they’re not effective, it’s a huge issue. And that’s a hard business case to make when it comes to prioritizing investments.”

This comment was made to me recently by a senior executive and it highlights how far the world has come from outsourcing low-end, often IT-related processes to more efficient specialist information technology outsourcing and business process outsourcing providers based offshore. The latest evolution of managed services is solving a more complex equation for companies in a business environment that is changing rapidly due to three key drivers: 

  1. Regulation is increasing and becoming more complex
  2. Technology is accelerating at a pace that makes it difficult to maintain, oversee and steer  
  3. Talent to manage the challenges of global business is harder to find and retain

Together, these factors mean it is harder than ever to run a business, with leaders increasingly distracted and slowed down by the effort and resources needed to control noncore but critical head office activities.

In fact, we’ve found that most C-suite executives spend about 80% of their time on simply “running” their business – and only 20% on value creation. The focus is not surprising considering the stakes. Regulatory and compliance missteps can not only be extremely costly, but see directors held personally liable.

But spending so much time on just keeping up won’t see your business get ahead. Flipping those 80/20 figures is critical to focus your efforts where they can add the most value: growth and innovation. This is why more businesses are turning to managed services – it’s simply the most effective and value-added way of running an organization, and all it entails.

By uncovering new insights around tax, finance, risk management and financial crime, managed services can truly transform key operations – they won’t just be more efficient but more effective.

Does your HQ need an injection of IQ?

This is where managed services can change the game. Where outsourcing once helped companies take cost out, managed services now focuses on adding value in, across all elements of the business. Yes, it will deliver cost efficiency, but that’s more a function of the fact that most organizations still require a fair degree of transformation in their core functions. 

The real magic happens when deep domain expertise is combined with global reach and a state-of-the-art technology stack that leverages both new technologies and common data sets. By lifting the burden where it’s heaviest – in tax, finance, risk and compliance – managed services can truly transform key operations, enhancing performance and introducing innovation. With an injection of new IQ, Head office can add more value, and allow leaders to get back to focusing on what matters – driving growth and maintaining competitive advantage in a fast-moving business landscape.

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Summary

Managed services has its roots in outsourcing – but it’s not the same. The distinction is an important one to understand for all CFOs and COOs. Managed services can solve businesses’ most complex challenges around their core functions – ensuring that they are not just run with an eye on compliance, but with a vision for the future.

About this article

By

Paul Clark

EY Global Managing Partner – Managed Services

Leader of change. All-in on helping clients achieve their vision. Proud husband and father. Sports fan.