There are five common mistakes when planning to adopt finance and accounting business process outsourcing (BPO), says analyst Gartner.
The analyst has provided CFOs with a formula to avoid them:
Mistake 1 - Providing insufficient funding for the internal sourcing management team
Many organisations fail to dedicate experienced staff to this initiative, leading to multiple problems in the early years of the deal. Gartner recommends creating a mixed-discipline team comprising sourcing experts, IT and HR personnel and legal and operational members of the finance and procurement teams.
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Mistake 2 - Not including the IT team in the early planning stages of the F&A outsourcing project or in the transition planning stages
The IT layer is often overlooked by the business process manager in terms of the overall impact on the organisation's IT and business intelligence strategies. Gartner advises the early inclusion of the IT team, including the software contracts manager as well as IT ERP and security specialists who can ensure that unnecessary delays in accessing internal systems are avoided.
Mistake 3 - Racing to issue a request for proposal (RFP), instead of conducting research to learn about the market.
Gartner advises buyers to ask the BPO providers for clear guidance on how they will use the latest tools for automating F&A processes to enable the IT team to evaluate the different approaches. The best-practice use of sourcing and research consultants is also recommended, together with gaining insight into the latest inshore and nearshore issues that have arisen.
Mistake 4 - Asking the BPO provider to monitor too many service-level agreements (SLAs)
The more mature adopters of F&A BPO have established fewer service-level agreements (SLAs) and not more than 15 key performance indicators (KPIs), even for complex work, making for more meaningful evaluation of providers. The CIO's team can help the finance team to prioritise which agreements to focus on and how to blend these with KPIs.
Mistake 5 - Failing to get sufficient acceptance and collaboration for a project from business divisions and country locations - at the financial and technical support levels - and by the inability to obtain documentation about existing process activities.
Integration with existing processes must be costed-out and agreed with the provider in advance. The CIO and team should be in a position to help the business make the optimal decision to pursue an internally managed shared-service centre or outsource to a business process provider.