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Getting more out of offshoring the finance function

Companies aren't getting the most out of their offshoring programs. Key design changes would help.

APRIL 2007 • Michael Bloch, Shankar Narayanan, and Ishaan Seth

offshoring finance accounting article, outsourcing finance strategy, Corporate Finance

The quality of offshore providers of finance and accounting services has never been higher. Many have made significant investments in the control and monitoring mechanisms needed for high-end functions, regulatory requirements, and complex finance processes such as valuation reviews, legal-entity control, and tax preparation. Some have even hired risk-and-control officers to deal with Sarbanes-Oxley, Basel II, and SEC reporting.

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	Getting started and staying with it Offshoring can be a cornerstone of a sweeping effort to transform a company’s finance function. A successful effort can take years to accomplish and requires significant investments of capital and resources. Executives who attempt such efforts should pay close attention to at least three critical elements of the execution plan. CFO leadership. Offshoring never lies easily on the organizational palate. As with any transformation effort,¹ top managers must continually reinforce their commitment to it. CFOs in particular should personally communicate their vision of offshoring as a commitment of the overall finance function and assume responsibility for staffing offshoring programs with the best internal and external talent available. Anything less is a recipe for failure. In our experience, companies that try a bottom-up approach—sending small projects offshore— never reap...