Recent Trends in F&A Globalization
As global/emerging markets expand, event small and mid-sized companies are forced to expand to emerging locations to support the local compliance, language, trade limitations etc.
Pay per transaction is fast gaining traction with companies that typically outsource their F&A activities to 3rd party vendor partners.
Functions that are most matured for global sourcing are
- Order to Cash*
- Procure to Pay*
- General Accounting*
- Treasury & Tax*
- Closing & Reporting*
*Some activities of these functions might not be suitable for global sourcing depending on the geographic location
3rd party outsourcing is the most preferred model for outsourcing F&A.
Source: Zinnov 2007, 2008 & 2009 Benchmarking Study
Countries in APAC Region have attractive cost structure to provide F&A services
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Zinnov Launches 2010 IT Benchmarking Studies
Zinnov is launching a comprehensive 2010 F&A survey to address the following needs :
- Business needs and compliance: In the new economy, many companies are struggling to keep pace with the changing compliance requirements. As financial non-compliance is unacceptable, we will benchmark the compliance risks at each activity level and risk mitigation strategies
- Global Sourcing Maturity : Companies often plan in isolation and there is a need to understand the qualitative and quantitative aspects of global sourcing including offshorability of activities, quantum of activities sourced from remote locations, financial insights from global sourcing etc.
- Process Level benchmarking: The need to understand how peer group companies are performing across various metrics and various F&A processes is becoming critically important as companies continue to look for cost savings
- Lack of Disciplined Methodology: Average of Average really does not mean anything to many executives. Many benchmarking studies do not provide the correct granular level information and aggregate too much resulting in poor decision making. We have designed a powerful methodology to solve for this
- Comprehensive Taxonomy: Our taxonomy and quantitative modeling is very powerful as you will get analysis by location, by process, by metrics and by engagement model. A revolutionary approach in benchmarking Click here to sign up
Companies typically outsource their transaction processes in the initial stages before moving up the value chain of their functions. | |
Interesting Graphs from Zinnov 2009
Shared Services Benchmarking Studies
- Propensity to offshore various F&A functions and activities
- Shared Services Globalization Maturity in the Industry
- Suitability of locations based on capability and cost attractiveness
- Emerging countries maturity on critical parameters
- Poland as a nearshore destination for Europe
F&A Global Sourcing Trends:
Sound bites from the global grounds:
"Challenges due to small F&A team forced us to leap into a pay per transaction model, we are thrilled with the results "
Source: Director of Finance, Silicon Valley, CA
"The salary differential for F&A resource (between US and India) is much higher than what we have seen for engineering/IT talent. Our ROI per resource is 40% higher than others"
Source: VP, Finance, Boston, MA
"The vendor we selected transformed our F&A processes using their systems and automation techniques"
Source: Discussions from Confluence 2010- Santa Clara, CA |
