February 18, 2005

In the ideal B2B world, all enterprises would outsource their key functions (Ex: information technology, finance, human resources, call centers, etc.) and just keep control of their brands only.

While that's a plan that makes sense to IT vendors and certain futurists, it simply doesn't fit well with the way the world is today.

That said, there is a well established trend toward outsourcing, and enterprises need to have reliable information on hand to make the decisions that are right for them. One interesting source of guidance comes from a survey done by Accenture pertaining to finance business process outsourcing (BPO).

Specifically, Accenture talked to enterprises about what finance BPO processes they thought needed to remain in-house in order for compliance and governance objectives to be met. Here's how it played out:

--- Budgeting and forecasting: 81 percent
--- Treasury and cash management: 71 percent
--- Management information and analysis: 68 percent
--- Financial risk management: 66 percent
--- Financial reporting: 57 percent
--- Tax compliance: 41 percent
--- Debtors/receivables: 31 percent
--- General and financial accounting: 30 percent
--- Creditors/payables: 27 percent
--- Financial systems application management: 19 percent
--- Employee travel/expenses and payroll: 11 percent
--- Other: 2 percent

This shows enterprises what their peers think about what segments of finance BPO. By this standard, something like financial systems application management can be easily farmed out, since only 19 percent of companies find it necessary to keep this in-house.

This is a pretty safe way to proceed. What vendors say, though, is that cost savings go up as you move up this chain. If you move not only the transactional but also the reporting, risk management, and other process functions to an outsourcer, say the vendors, you can save 35 percent over your existing costs.

Whether or not this holds true in your business case, the survey figures above indicate what your enterprise peers think about safe and easy finance functions to outsource and as such can constitute at least an entry into the space.

Source: Line 56