Q: What are some of the trends you see in finance and accounting outsourcing?
Ans: We see a definite uptick in the demand for finance and accounting, outsourcing services over the last 12-18 months. The downturn in the global economy has definitely been a key factor that’s driving the demand. What we are seeing more is global deals, companies that are looking to outsource their finance and accounting back office operations not just in North America, but also across Europe, Asia Pacific and Latin America. We are seeing many more comprehensive deals as against the single function deals. So CFO’s are more than willing to outsource their procure to pay, order to cash, record to report as well as decision support activities.
We have seen that the average size of the deal has gone up. That’s primarily because of the fact that deals are getting more global, deals are getting multi-tower. We are seeing an increase not just in core finance and accounting processes, but we are also seeing CFOs looking to outsource some of the more industry specific processes. Things like loyalty accounting, things like sales incentive and commission accounting; in the insurance industry we have seen clients outsource fiduciary accounting so on and so forth.
Q: Are there benefits of FAO which go beyond cost savings?
Ans: There are many benefits that finance organizations can get from outsourcing beyond the labour arbitrage. While cost savings is a given, other benefits that companies can derive include process standardization, implementation of best practices and implementation of technology enabled transformation initiatives.
Companies can also expect improvement in service levels and improvement in matrix and reporting. Because of the scale that a service provider like WNS brings to the table because of our vast experience of delivering similar processes across multiple clients, we are able to implement best practices on our clients’ processes; we are able to standardize them. One of the key benefits from moving a decentralized accounting organization to a centralized shared service environment is the ability to standardize their processes.
Q: What makes an FAO program successful?
Ans: Finance and accounting outsourcing relationship is pretty much like a marriage. So there has got to be collaboration between the customer and the service provider. Collaboration is key, communication channels are extremely important.
A big difference that I have seen in my experience of some successful outsourcing programs and the not so successful outsourcing programs, has been governance. There’s got be management commitment with both parties you go to implement a very strong governance program. Governance that works across the entire organization, governance that is proactive, governance that is always on.
Q.How can companies fully leverage FAO (What is the range of processes in F&A companies can outsource)
Ans: The scope of finance and accounting outsourcing services is extremely broad. Almost every activity that falls within the gamut of the CFO’s organization can typically be outsourced, obviously in different proportions.
Service providers like WNS can deliver transactional processes, deliver processes that require judgment, processes that require more technical accounting knowledge. At WNS we have the capabilities to deliver our services in 4 broad domains; procure to pay, order to cash, record to report and decision support. From transactional to rules based to processes that require decision making - we can do it all.
We have also seen clients outsource activities that are outside of the core F&A domain, but activities that are very industry specific. So for example in the travel area, passenger revenue accounting or inter-airline accounting; in the insurance space, fiduciary accounting are some other processes that are very industry specific that can also be considered for outsourcing.
Q: Some examples of work done by WNS?
Ans: At WNS we have over 6,200 FTEs that deliver finance and accounting outsourcing services to over 55 clients in different industries. Some of our clients are Fortune 500 companies, global brand names. For example, for large Fortune 500 professional risk advisory services company,WNS provides end-to-end finance and accounting outsourcing services from procure to pay, where we do accounts payable, we do vendor master management, we do disbursements to order to cash, where we help them with cash application, billing, collections; credit management to the entire gamut of functions that happens within the controllers organization, from very basic functions like journal entry to inter-company account reconciliations, all the way helping their organization close their books on a month-to-month basis, we also help them with consolidation services.
So, pretty much end-to-end scope is what we do within WNS.