The pros and cons of “build versus buy”
Once activities have been designated as either best-in-class or best-in-cost, companies can decide whether they want to “build” an activity – keeping it in-house – or “buy” or outsource certain activities to an external provider. Some businesses choose a hybrid approach to make the most of the efficiency and effectiveness of their tax and finance function.
The in-house option has both pros and cons. An internal transformation that allows a company to retain and improve its tax and finance function may be the most traditional and familiar approach, creating the least disruption. However, it’s an option that requires significant management focus and capital investment. The biggest challenge may not be around the initial investment and effort but the ability to sustain a robust tax and finance function in a rapidly changing environment.
Outsourcing to a managed services provider can be a more effective way to reduce overall tax costs and risks, by shifting IT and other expenditures to a third party who has already made large investments in world-leading technology, a cutting-edge data platform, global delivery centers and a network of specialist talent. However, there are also downsides to outsourcing , as it requires a significant transition effort, as well as management and governance of the new operating model.
Reimagining your tax and finance function with managed services
Despite the effort, managed services can minimize costs and maximize the performance of the tax and finance function - producing higher quality results, reduced risk and increased transparency.
In fact, the cost savings and added value achieved by managed services, when delivered by a provider with a trusted tax and finance brand and regulatory credibility, are simply unmatched by even the most well-resourced team. And, critically, by taking the burden of tax and finance compliance out of the business, companies can pivot internal resources for more strategic activities.