Have the TPI Top 5 delivered to your inbox
Sourcing Considerations for Finance & Accounting
- Source Toward a Vision Beyond Wage Arbitrage. Typically, initial Finance & Accounting (F&A) BPO contracts are structured around staff augmentation. But, Finance executives are tending to award contracts to partners who can help to refine a vision for a transformed Finance function over time. Vision matters.
- Reputation Matters. A reputation for delivery excellence is an increasingly critical factor for socializing an F&A Outsourcing relationship. With most decision-makers typically being the CFO or Controller, selecting a provider with an installed base of business is perceived as a risk-mitigator.
- Finance Executives Start with Focus. Accounts Payable, Accounts Receivable and Time & Expense are the more common processes targeted for initial outsourcing. That said, buyers are less accepting of multiple service provider handoffs as the appropriate long-term solution, so the ability scale services across functions is part of most F&A sourcing strategies.
- Buyers are not Leveraging F&A BPO to Drive System Transformation. In the vast majority of F&A BPO contracts, the buyer retains ownership of the existing F&A systems. Yet, technology is starting to integrate/bundle with process for F&A BPO offerings. Ultimately, heightened risk will follow from the use of disparate systems. This, and the desire to avoid capital expense, might change the strategy in the coming periods.
- Flexibility in Pricing Models is a Key Service Provider Differentiator. In F&A BPO contracts, there is great variation in pricing (FTE-based mechanisms and unit-based pricing). Clients have been willing to pay a premium for certain deal components such as customization and professional services – reflecting buyers’ needs to leverage sizable legacy investments and accommodate existing systems and processes. This might change in today’s challenged economy.
Let the experts at TPI guide you to immediate improvements in the face of tough economic conditions!
