The MacNair Travel Leadership Blog

BPO: The Answer to Relieving the Pressure on Financial Capabilities

Posted by Mike MacNair on Apr 12, 2016 12:00:00 PM

BPO: The Answer to Relieving the Pressure on Financial CapabilitiesThe future of finance is here, requiring a new and improved way of managing expectations based around your team’s financial capabilities. Globalization, increased competition, advancing technology all work to improve a business’ function; yet for SME Financial Executives, these improvements also increase the pressure to provide value-added results for your business. An increase in your CEO’s need for transparency and visibility into finances does not always equal an increase in staff. Finance executives are increasingly being asked to do more, do it better, and do it with fewer resources.

Now is the time to utilize all of the resources and tools available to ensure the areas that fall under the purview of the finance department are working in sync, and furthermore, with all departments within your business. In order to bring value to your department, and provide strategic direction to your business, it’s essential to utilize business process outsourcing (BPO) resources.

What are the challenges facing Finance Executives (that BPO can fix?)

As the CFO of your business, one of your top priorities is to make a positive impact on your organization. Yet, challenges exist that prevent you from achieving optimal alignment between investments and overall business performance. Following are potential challenges that can prevent you from achieving the best results from your business’ financial capabilities.

  • Managing tasks outside of expertise – today’s CFO doesn’t simply account for revenue and expenses in a business. Departments such as operations, IT and human resources may fall within the Finance Executive’s management area. Since these departments are not within your immediate area of expertise, you may have limited knowledge of their function and therefore they tend to fall to the bottom of your “to do” list, negatively affecting control and consistency.
  • Lack of available talent – great talent is hard to find, especially in today’s global, highly competitive economy. Finding and retaining top talent that provides a positive impact to your business is challenging, and will continue to strain your organization, resulting in an even larger gap between expected financial capabilities and available resources.
  • Limited resources and opportunities for value creation offered by the global economy - The global economy can create virtually limitless possibilities for new ideas. Yet, today’s tight budget management can limit your accessibility to internal processes, data, tools, organizational structures, governance and skilled workforces needed to capitalize on these new markets. This can result in lost revenue-generating business opportunities.
  • Enterprise performance management – there’s no question that your EPM system provides access to vital data which can bring value to the strategic success of your business; at the same time, this advanced system requires CFO’s to be even more visible when it comes to predicting future outcomes and providing strategic assistance to effectively manage the business bottom line. When underlying business processes need to be closely managed, your bandwidth for providing strategic direction based on EPM is severely limited.
  • Lack of time – it’s quite simple; there are just not enough hours in the day to manage the people and processes within the finance department, provide accurate and strategic financial information to benefit the business, while at the same time ensure all business financial capabilities are moving at the highest level.

How can BPO provide solutions, meet these challenges and relieve the pressure?

Business process outsourcing (BPO) is contracting the operations and responsibilities of a specific business process to a third-party service provider. This typically includes business processes like human resources, accounting and travel management. Partnering with industry experts that provide specific, task-oriented solutions improve processes and increase efficiencies.

The good news is that BPO can provide the solution needed to meet the above challenges and in turn, provide a long list of benefits to your organization. Effective utilization of BPO resources can provide the following solutions:

  • Internal process improvement – as you consider the options for outsourcing, you will naturally analyze the current processes and systems within your organization. This will lead to smaller, yet important, process improvements within your departments, increasing overall efficiencies.
  • A team of experts to perform specific tasks that are not core to your business – this is BPO at its best. Leveraging BPO to take over the “non-essential” tasks within your finance function will significantly improve your results. For example, sourcing top IT talent to enhance and/or upgrade your business’ ERP system can save your business thousands of dollars and provide the expertise that simply may not be available to you from current employees. This increases overall productivity and control within your department.
  • Effectively manage the required functions within the financial department – there are many finance functions that can be managed through a BPO relationship with little risk involved. General accounting, financial reporting, fixed assets, accounts receivable and accounts payable are functions that can potentially allow your top talent to focus on innovation or provide strategic direction on overall process improvements, resulting in increased efficiencies and reduced costs.
  • Provides consistent, continuous improvement – when someone from outside your business has the ability and knowledge to perform internal business functions, they can also share best practices and provide expertise on finance capability improvements.
  • Improved bottom line – utilizing BPO resources will allow your employees to focus on the tasks that are within their expertise, giving them time to improve the overall function of your business. BPO will increase efficiency, leading to long-term cost savings.
  • Increased compliance – when you work with an expert BPO resource, your business need is their top priority; mitigating the possibility of other issues getting in the way, as sometimes happens with employees who have too many tasks. This laser focus allows them to perform tasks with the utmost effectiveness, increasing business compliance and control.  
  • Allows for flexibility and scalability – utilizing BPO services allows your business to move and flex as needed to meet the demands of new customers, or invest the time needed to explore and process new ideas. Time can be spent on developing ways to generate additional revenue, versus managing underlying processes.
  • Gives the CFO time to meet the demands of the CEO to provide strategic direction and visibility in the marketplace. There’s no question that CEO’s are demanding more visibility and transparency into the financial capabilities of your business. When you utilize BPO resources, your time can be spent providing robust, real-time information that provides strategic benefit and operational efficiencies while keeping expenses in check.

The financial capabilities of your business are essential to its success, providing strategic direction and high level information to enhance overall business performance. Through the use of BPO resources, your time can be used effectively to provide insight and knowledge and added value into your business objectives, allowing for effective budget management and increased profits.

Interested in learning more about how to successfully enter into a BPO partnership? Download 5 Key Reasons Why Outsourcing Fails and What to Do About It.

5 Key Reasons Outsourcing Fails and What to Do About it

Topics: CFO, business process outsourcing