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OUTSIDE UPSIDE: FINDINGS FOCUS THROUGH FINANCE OUTSOURCING
Author(s) -
Clements Stewart
Publication year - 2003
Publication title -
journal of applied corporate finance
Language(s) - English
Resource type - Journals
eISSN - 1745-6622
pISSN - 1078-1196
DOI - 10.1111/j.1745-6622.2003.tb00525.x
Subject(s) - outsourcing , staffing , business , standardization , general partnership , process (computing) , knowledge process outsourcing , incentive , finance , function (biology) , opportunism , service (business) , accounting , process management , industrial organization , marketing , economics , computer science , management , market economy , evolutionary biology , biology , microeconomics , operating system
More and more companies are outsourcing aspects of the finance and accounting function to cut costs and increase process efficiency. This article draws on survey results and numerous real‐world examples to make the case for outsourcing finance and accounting functions, either outright or through shared service centers. As expected, cost and efficiency gains can be dramatic. But there are also important strategic benefits, including the freedom to focus on core businesses, greater access to specialist knowledge, standardization of processes across business units, and the ability to launch operations quickly without staffing back offices. Maximizing the benefits of outsourcing requires careful planning and execution. Executives who have successfully navigated the process recommend allowing adequate time to ensure buy‐in and consensus building, incorporating the appropriate performance‐based incentives, taking steps to build morale during the transition, ensuring proper oversight, and building a strong partnership with the provider. When properly implemented, outsourcing is a powerful ally in the corporate struggle to cut costs—and it can be a vital complement to strategy as well.