In the business world, “outsourcing” has long been considered something disputable. But the rapid pace at which our web-enabled world has evolved is challenging that notion, particularly when it comes to finance and administration services. These are essential, sensitive functions for any company that can’t be overlooked or undervalued. At the same time, more firms are now learning how to leverage the cost-savings of the outsourced vendor model with the value-add potential of a nimble, effective finance team.
“Outsourcing isn’t just a cost-savings measure anymore.”
A recent survey from Deloitte makes a strong case for outsourced business operations, particularly finance and accounting. The company’s 2016 Global Outsourcing Survey polled executives from around the world on their thoughts and strategies related to outsourced business services. Across varying industries and revenue thresholds, the survey found that executives no longer see outsourced projects as simply cost-saving measures. Instead, they are increasingly learning that their business can grow strategically with strong vendor relationships.
One of the major developments that has allowed this shift in the vendor management world is, of course, cloud technology. It’s well-known that a cloud model can reduce upfront costs, but more executives are also using these tools to speed up the rate of change and drive innovation at many levels. The promise of the cloud model has demonstrated success and innovation at both ends of the traditional vendor relationship. Software-as-a-service providers are often chosen initially on the strength of their cost-saving and productivity-enhancing potential. But the SaaS and cloud model also enables more effective communication both within an organization and across vendor partnerships.
The ultimate outcome here is exactly what’s being seen in the business services market. More organizations are choosing to delegate tasks like finance and accounting procedures to vendors, in turn allowing more organizations to focus the bulk of their time, money and effort on innovating and adding value. Indeed, 57 percent of executives surveyed by Deloitte said their vendor partnerships enabled them to focus on core business functions.
Even more notable is the finding that vendors themselves are providing more advanced services than ever before. A small but not insignificant portion of Deloitte’s survey respondents noted that they turned to outsourced services to gain “access to intellectual capital,” and even inspire “broader transformational change.” These are not outcomes that would have been expected of managed service providers in the recent past.
Shared services changing outsourcing
One of the major drivers of change in the realm of business process outsourcing is the development of the shared services, cloud model. Writing in an article appearing in The Wall Street Journal, Deloitte advisor Simon Tarsh noted that BPO services have transitioned from simply offloading bulk transactional tasks to actually adding value to the organization as a whole. Tarsh and other researchers found that the modular delivery models enabled by cloud computing have led companies to actually accomplish more with their BPO vendors than had been initially planned.
When BPO vendors have the capability to go above and beyond their initial service agreements, it’s clear that there exists so much untapped potential. Going beyond transactional work like balancing accounts and creating reports, BPO vendors can now connect with their clients one-on-one through a web interface and collaborate at a much higher level.
Deloitte has found that modern BPO vendors now take on a wide variety of new roles in their client’s organization:
- Companies entrust third-party vendors with regulatory requirements to a much greater degree, according to Dan Kinsella of Deloitte and Touche.
- BPO vendors frequently delve into sophisticated consulting work, particularly in the F&A world. With access to a trove of financial data, vendors with the right tools can mine this information for valuable insights and strategize accordingly with the client.
- Overall, third-party vendors are helping F&A teams stay agile, responding to short-term needs as they arise while also collaborating and expanding to a big-picture perspective.
Adding all these developments together, the takeaway is clear for small startups as well as established firms: Outsourcing isn’t just a cost-saving move anymore. At least, with the right creative partner, it doesn’t have to be. Instead, clients and vendors work more closely and collaboratively than ever, using each team’s individual strengths and constant cross-talk to continually build on time and money saved.
Consero is among the leaders in this new breed of outsourced F&A services. Combining the people, processes and tools of a full-fledged F&A team, Consero helps businesses stay lean and strategic across departments and functions. Consero not only gives businesses the tools to streamline their F&A data and procedures, but also the expertise and support to learn and grow from timely data insights, and make quick decisions that will drive the business forward.