EQUATERRA AND OUTSOURCING TODAY RELEASE RESULTS OF LANDMARK RESEARCH STUDY ON THE ROLE OF BUSINESS PROCESS OUTSOURCING (BPO) IN FINANCE & ACCOUNTING

NEW YORK (April 12, 2005) —EquaTerra, a multi-national outsourcing and insourcing advisory firm, and Outsourcing Today LLC, publishers of HRO Today, HRO Europe and FAO Today magazines, today released at the HRO/FAO Executive Summit at the HRO World conference the results of a ground-breaking research study on transforming the Finance & Accounting (F&A) function.  The study – in which more  than 120 qualified F&A decision makers in a highly representative cross-section of company sizes and industries participated – focused on two critical issues:  what efforts organizations are undertaking to improve their F&A operations, and what role Business Process Outsourcing (BPO) can and will play in transformation of the function.  Key findings and excerpts from the study also appear in the March/April issue of FAO Today magazine.

                  Said Stan Lepeak, Managing Director of Research for EquaTerra, “The data points and analysis covered in this study provide finance executives with a peer’s “how-to guide” for addressing their most pressing issues:  continued cost reduction, improved delivery of traditional and value-added services, and maintenance of adequate compliance levels.  Finance executives needing answers regarding transformation of the F&A function will gain significant insight from the results.”

Key data points and analyses covered in the study include:

• The top objectives of the F&A function/areas targeted for improvement efforts
• F&A process improvements undertaken/being considered
• The outsourcing option – current state of the market
• Current & planned F&A outsourcing environment
• The importance of outsourcing to meeting a range of goals
• Outsourcing concerns/potential BPO challenges
• Outsourcing service provider selection criteria
• Geographic outsourcing options and preferences
• Key influencers and decision makers

Key study findings include:

• The top two objectives of F&A organizations include improvement of the internal control environment and improvement of the capability and competency of F&A staff
• Traditional improvement efforts such as mandatory expense reduction, new IT implementation and reorganizations have already been undertaken by most organizations, but a full 50 percent of respondents cited outsourcing – particularly offshore – as next on the process improvements to-do list
• Price/overall economic proposition and process expertise/quality topped the list of criteria when selecting an outsourcing service provider
• Cultural fit ranked relatively low (only 16 percent) on the list of service provider selection criteria
• Transition/implementation was cited as the most challenging aspect of F&A outsourcing
• The ranking of preferred outsourcing locations – offshore, external regional processing center, combination of external/offshore and on-site/at company site – were extremely close, coming in at 21 percent, 26 percent, 26 percent and 27 percent, respectively

A major conclusion drawn from analysis of study results is that IT and BPO can, and will, play a strong and growing role in enabling cost-effective F&A transformation.  The emphasis for end-user organizations must remain, however, on investing adequate resources to develop the processes and gain the competencies required to determine when outsourcing is right for them.  Further, it is important to overcome the challenges cited by undertaking F&A transformation to ensure it is implemented successfully.  The emphasis for service providers – in addition to continually improving core operational process and global service delivery capabilities – is to consistently define, contractually commit to, and then actually deliver cost-effective services that drive measurable business process performance improvements that enable F&A transformation.

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