Goal setting analysis You have interviewed an executive of a company that plans to outsource strategically important
Question:
Goal setting analysis You have interviewed an executive of a company that plans to outsource strategically important services. What key insights can you get from the following excerpt of your interview about outsourcing finance and accounting activities? Do these insights generalise to outsourcing other service or manufacturing resources? Explain.
The main reason for us to outsource finance was focus; that is, I mean to say, finance has two main pillars. One is business controlling, and the other one is transactional accounting.
We came to the conclusion that when you have so many different sites that are often small accounting transaction groups, on the one side you may lack the skills and great quality to really develop a world-class accounting process. And on the other side you also have difficulties in standardisation and harmonisation when you have your own local accounting teams spread around in so many different countries. And thirdly in the context of focus, we want to focus on the value-added thing in the finance and accounting function, which should be the role of the controller as a business partner, the colleague who understands the information, and who can analyse the information and can give good business support to the business management. While transaction accounting should be harmonised, standardised and automated, when you have that in larger centres, we expect more quality in these processes because of the size and the greater possibility to harmonise and standardise. When you have large, focused shared service centres, then you can afford to allocate leading level top professionals into these centres in order to manage world class processes in the area of procure-to-pay processes, recording and reporting processes, and order-to-cash process, this would be uneconomical without centralisation and creation of critical mass, e.g. when working with decentralised small accounting teams in 100 or more individual sites.
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