FEI examines alternative ways of sourcing financial operations

WASHINGTON, Nov. 27, 2007 -- The Financial Executives Research Foundation (FERF), the research affiliate of Financial Executives International (FEI), has released the results of a new study on the management issues and economics of various approaches to corporate sourcing of financial operations.

The study, sponsored by The Siegfried Group, revealed multiple insights on the implementation and use of sourcing approaches, including a strong emphasis that sourcing decisions be made in the context of the business as a whole.

Entitled "Building an Agile Finance Function," the study assesses the input of senior financial executives from 18 large U.S. companies, including 11 Fortune 500 companies, on their use of four common approaches to sourcing: shared services, co-sourcing, off-shoring and outsourcing.

"Through this study, financial executives highlighted the need to adopt a thoughtful and well-conceived approach to sourcing. They have clearly emphasized that this approach should integrate the varied aspects of sourcing not only into a corporation's business model, but its corporate culture as well," said William Sinnett, director of research at FERF. "External sourcing of even a single function can meet with serious resistance in companies in which the culture is unprepared to acknowledge sourcing's potential benefits."

A majority of the companies interviewed currently employ more than one sourcing alternative.

"This suggests that agility in financial functions often requires a combination of approaches to financial operations," said Sinnett.

Of the 18 companies interviewed by FERF, eight indicated the use of one sourcing alternative, while six use two sourcing alternatives and four use a combination of three.

The study also revealed that co-sourcing, also known as accounting resource services, was one of the faster growing sourcing alternatives. Surveyed companies perceived accounting resource services as an opportunity to use consultant-quality professionals from an outside provider to assist internal teams with major project implementation. One executive explained, "These could be special projects which have a four to six month life span, and it does not make sense to hire full-time people for these projects." Another explained that his company's aim is to deploy accounting resource services strategically in order to make costs more variable, enable a focus on more strategic activities, and access external skills and talent.

"Companies that use, or are contemplating the use of, accounting resource services and other sourcing approaches will find that FERF's study contains valuable insights and information," said Robert Siegfried, president and CEO of the Siegfried Group. "In an increasingly competitive global marketplace, these approaches have become a valuable tool to help U.S. companies deploy accounting and finance staff more efficiently."

This content has not yet been Rated.

To Rate content, please Login.