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July 05, 2007

European News

IBM and Gruppo Monte Paschi Siena announced a 260 million euro IT Services agreement for IBM to help cut costs and improve efficiencies for the Italian bank's Operational Consortium. The new agreement is an extension to an existing 420 million euro contract signed in 2003, and is expected to bring approximately 48 million euro in cost savings over the new 6-year term.

LOOMING STAFFING CRISIS IN UK ACCOUNTANCY...Staffing problems in accountancy firms is a major issue the industry seems to be ignoring. While most practices are just about managing to keep their heads above water, this will not remain the case for much longer if urgent steps are not taken now, according to Simon Crompton of MYOB, the global business solutions provider:

“The inability to get enough bums on seats is a major business issue for accountancy practices. It can jeopardise work standards, demoralise team members and seriously impede an accountancy practice’s ability to grow. It is for these reasons that of all of the challenges facing the profession today, the ability to recruit and retain staff has to rank as a top priority. So I am amazed that the profession does not seem prepared to tackle the issue head on.

“I am seeing first hand how accountancy practices are struggling to recruit enough graduates and how this is forcing up wage inflation at that level. At the same time, holding onto people and offering them dynamic career progression also seems to be becoming far harder – a phenomenon that is not helped by the average age of a practice partner rising to 57. As accountants determine strategies to deal with these recruitment and retention issues, so other resource-saving activities need to be considered.

“It is a recognised fact that accountancy practices are increasingly looking to grow their business through offering added value services. By definition, this means that the core bread and butter work is reaching ‘commodity’ status where it is neither a differentiator nor very profitable. As such it would seem to me that accountants need to find strategies to free up the valuable staff resourcing to concentrate on the value-add. I would suggest it is therefore time for accountancy practices to seriously consider the role that outsourcing of non-critical work could bring.”

Posted by jbowles at July 5, 2007 12:59 PM