Did Your SMEs Derail Your Finance and Accounting Outsourcing Plans? | Sherpas in Blue Shirts

Posted On October 16, 2013

It’s a curious conundrum. Finance and Accounting Outsourcing (FAO) has proven its ability to deliver savings of 30-45 percent, and usually provides other non-financial benefits such as better transaction documentation/auditability, faster and richer reportability, and dynamic workflow.

So why are FAO transitions far more hesitant and spasmodic than those of Information Technology Outsourcing (ITO) or other Business Process Outsourcing (BPO) functions?

The answer may reside among enterprises’ subject matter experts (SMEs), who may unintentionally disrupt the FAO progression. Now, before CFOs, controllers, or accounting directors raise their arms in protest, let me explain.

Consider that F&A, with its inflexibly cyclical, month-end, quarter-end, and year-end closing peaks, regularly places a significant and critically important load on SMEs plates. Is it any wonder that they request breathing room – sometimes of several weeks, or even months – between outsourcing exploration and execution, so they can focus on top-down priority projects?

Consider that F&A has the potential to immediately impact stock price or create the possibility of legal proceedings, thus negatively affecting the business to a far greater extent than any other function. Is it any wonder that SMEs, often inadvertently, spawn enough fear, uncertainty, and doubt about missing internal and external reporting cycles, and thus raise the “real and present danger” flag about outsourcing unless certain components are de-scoped?

Following is Everest Group’s advice for avoiding or counteracting SMEs’ derailment of FAO plans:

  • Acknowledge that value is greater in FAO than in most other functions, and it is worth the extra effort
  • Recognize competing demands, and adjust the timeline and/or add extra external resources to compensate
  • Invest time in reference calls and site visits to build comfort that FAO works elsewhere in equally complex environments
  • Commit internal SMEs’ time to explore the intricacies of their areas directly with service provider SMEs to build comfort that FAO can work in their own environment
  • View demonstrations of workflow, intelligent document management, and other service provider tools to help drive excitement for a better way
  • Where de-scoping occurs, consider it a first step to future expansion, rather than a “deal killer”
  • Engage senior leadership including key client stakeholders early and often to witness the value potential and garner their support in driving past obstacles

Have your organization’s FAO plans been disrupted by internal forces, either unintentionally or purposefully? Do you firmly believe that outsourcing in all but the most basic activities is too risky for F&A? Please share your experiences and perspectives with other readers!