Smart Sports has relied on its own staff to manage all aspects of its business. However, it

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Smart Sports has relied on its own staff to manage all aspects of its business. However, it has grown sufficiently large to consider how best to manage certain support functions. Sam is considering whether he should employ an IT specialist to implement and maintain a new integrated software package or whether he should simply buy-in the expertise from consultants when he requires it. He estimates that the costs of employing a specialist would include a salary of £60,000 and a contribution to the pension fund of £5,000. To carry out the work, the specialist would require training on three courses per year at £500 each, use of the telephone of £200, and travel expenses of £500. The specialist would also be able to cover work currently carried out under contract, for which they pay £11,500 per annum. Nina estimates that it costs £1,500 on average for every member of staff to use the space in the office (covering rent, heating, and canteen) but that they would not need to increase the work space if the specialist joined them. Nina has also investigated contract consultancy costs and estimated that they would need to hire an IT consultant for 34 weeks at £50 per hour with a working week of 35 hours, in addition to the existing contract.

a) Should Smart Sports employ a specialist or buy-in consultancy advice when they need it?

b) What other considerations should be taken into account before making the final decision over which products to make and which to buy-in?

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Accounting A Smart Approach

ISBN: 9780199587414

1st Edition

Authors: Mary Carey, Jane Towers Clark, Cathy Knowles

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