Outsourcing Not a Big Hit in Finance Circles

April 20, 2004 (PLANSPONSOR.com) - Despite the apparent popularity of outsourcing in general, few companies see real benefit to taking their finance operations outside.

New research from The Hackett Group, a business advisory firm, including a survey of companies with older shared service centers, found little to no outsourcing of key finance areas. Most companies surveyed said they were unlikely to increase outsourcing in the next three years.

The reasons: concerns over cost, quality, and control, along with the fact that insufficient empirical case studies exist that quantify the value of outsourcing finance, according to Hackett’s research.

A total of 74% of the companies surveyed by Hackett do not outsource any complete finance processes. In addition, six out of 10 reported that their outsourcing levels have not changed in the past three years. When asked to break down their current use of outsourcing of four major finance processes (accounts payable, accounts receivable, general accounting and payroll), only payroll showed any significant number of companies (26%) using outsourcing. Another 5% of the companies indicate that they outsource accounts payable while no companies outsource accounts receivable or general accounting.

“Companies may be comfortable outsourcing sub-processes such as rekeying of vendor invoices or other data, check printing, or managing freight payments,” said Hackett Senior Business Advisor Penny Weller, in a news release. “Yet when companies have already expended significant time and energy to centralize complete processes such as accounts payable and accounts receivable within shared services, they are unlikely to consider outsourcing these processes today unless the economic benefits of doing so become overwhelmingly clear.”

More information on The Hackett Group’s Finance Shared Services Business Advisory Service is available: by phone at 404-682-2323; by e-mail at info@thehackettgroup.com; or on the Web at www.thehackettgroup.com .

The Hackett Group’s analysis is backed by research into best practices in use at more than 2,400 client organizations, including 97% of the Dow Jones Industrials.