Finance, BPO, Opportunity, Outsourcing
Finance BPO opportunity
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Outsourcing finance in the right way could trim a hefty 35 percent from existing costs, says research; addressing transactions, process change
Recently, research showed how business process outsourcing (BPO) can cut as much as 20 percent of existing costs from the human resources (HR) function. Now, new research from AMR finds that finance BPO can produce cost savings of 35 percent.The reason for that is pretty simple, with AMR noting that common finance functions including accounts payable (AP), accounts receivable (AR), general ledger, and fixed-asset accounting "provide a company with little strategic value, but done inefficiently, can drive up operating costs."
If you're spending more than 1 percent of revenues on these and other finance functions, it's time to take a serious look at outsourcing finance. Plenty of other enterprises are doing so; AMR estimates that the number of finance BPO adopters has doubled since 2001 and now stands at 25 percent of all those surveyed. This kind of adoption interest is driving BPO, not just in finance but across all categories. AMR says that the BPO marketplace will grow by 33 percent by 2007.
Finance BPO encompasses both transaction-centric services and finance transformation. In the transaction category, which is easier for vendors and enterprises alike to tackle, companies can consider lower-cost offshore providers, from whom AMR names players like Wipro, Tata, and Infosys. Once you're ready to layer in process improvements, full-service vendors like IBM, HP, Accenture, Capgemini, BearingPoint, and ACS can help. AMR recommends that finance BPO adopters begin with low-complexity transactions and make their way up the value chain.
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