Success factors in Finance & Accounting Outsourcing

FAO Research, an independent research firm focused exclusively on the FAO and procurement outsourcing markets, has put together a list of criteria that companies have used to achieve success in their Finance & Accounting outsourcing models:

Working with a Sourcing Advisor Upfront: Four of 10 nominees for our 2008 FAO Awards involved sourcing advisors’ guidance that enabled the prospective customers to have a methodology and processes in place that could lead to successful provider selection, and contract, and manage expectations. 

Effectively Creating and Demonstrating a Future State: Customers with an FAO 2.0 mindset upfront understand that their engagement is being initiated for more than pure cost-cutting reasons, and that a focus on FAO could help them achieve long-term goals as opposed to short-term wins. 

Multiple Supplier Service Delivery Locations: The geographic diversity of FAO service providers’ delivery centers is of extreme importance to FAO customers, as they understand that having access to similar cultures and language skills as their employees and customers as well as having different cost options and geopolitical risk spreading are critical factors for their long-term, global business successes. 

Industry Expertise: Companies that aim to achieve FAO adoption seek to align themselves with service providers who have “been there, done that” with peers in their industry.  Process knowledge and technical expertise requirements differ by industry, as do the drivers and inhibitors for business success in each industry. Innovative companies understand that and aim to leverage the industry acumen of their suppliers to achieve long-term contract success.  

Senior Management Involvement in the Project Upfront and Throughout: Every successful implementation and FAO engagement involves the buy-in and direct involvement of senior management at the start of the project. 

Single, Dedicated Point of Contact: Since outsourcing is a services business based on relationships, single points of accountability are crucial to manage the many parties involved in ensuring contract success, including transition managers, governance leaders, administrative personnel, and the like. 

Introduction of Flexibility into Service Delivery: Adding a component of variabiliy accommodate evolving business requirements, seasonal fluctuations, etc. 

Previous Business Relationship:  It’s helpful to know the company you are working with from your previous relations with them, but it’s not always imperative.  

Establishing FAO Objectives Upfront: These may include cost saving targets, accomplishments desired, or some other types of quantifiable measures so that you can have realistic goals to achieve and also benchmark against after you embark on the FAO endeavor. 

For F&A Outsourcing to be successful, clients need to have well established goals in mind that include more than cost-cutting.  As important as that is, the choice of an F&O outsourcing provider must be part of an overall strategy to deliver finance services globally.