Economic crisis drives firms to outsource

What are the benefits of outsourcing and how can it help companies in a crisis period?

In today’s economic climate, the demand for outsourcing is surging as businesses respond to the unprecedented market conditions and imperative to change both quickly and dramatically. Outsourcing is a valuable strategy in a market where there is stress, disruption, merger and acquisition activity and other drivers for rapid change.

More than ever, companies are looking for an outsourcing service provider that they can trust to provide a direct and immediate response to their business challenges. Many are under intense pressure to make dramatic cuts in their general and administrative (G&A) costs and are looking to outsource all or most of their back office functions. Some are also looking beyond immediate and sustained cost savings to solutions to improve cash flow and drive topline growth.

And regardless of what services they pursue, more clients are choosing to bundle services together to maximize the efficiency of the corporate back office.

Liquidity and preserving capital is paramount today, especially for companies in survival mode. Through finance and accounting (F&A) BPO and procurement BPO services companies can collect cash more efficiently, reduce their DSO (days’ sales outstanding) and thereby improve their cash flow, and achieve sustained savings that are delivered to the bottom line. Put simply, companies have the ability to find the cash, and then keep it.

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Specifically, F&A BPO can help improve a company’s working capital through increased speed of cash collected as well as by paying invoices on time to reduce penalty payments and secure early payment discounts. Procurement BPO can be leveraged to gain category management expertise, market insight and economies of scale for sourcing savings.

Outsourcing can help speed growth by improving workforce productivity, assisting with post-merger integration, optimizing application portfolios and streamlining IT operations. For instance, companies can use learning BPO to help reposition them for the future by improving productivity and driving revenue through training and expansion into new markets or geographies. Human resources BPO can help optimize workforce performance and productivity while enabling the HR organization to become more scalable and capable of addressing business requirements. And F&A BPO can help integrate back office functions following mergers and acquisitions activity and help support inorganic growth for our clients.

From the IT outsourcing perspective, application outsourcing can help create new business value through optimization of application portfolios, improved ROI and decreased total cost of ownership – all while improving quality by 50 percent or more and increasing productivity by more than 40 percent.

Infrastructure outsourcing can streamline IT operations to prepare for mergers, acquisitions and expansion, as well as release non-discretionary funds to support bringing new products to market.

Traditionally, most people have thought cost management was the primary benefit of outsourcing as it helps to cut costs quickly and provides sustained cost savings over time.

Application outsourcing industrializes application development, maintenance and support to align IT investments with a client’s strategic imperatives and can reduce costs by as much as 50 percent. Infrastructure outsourcing can help companies rationalize IT infrastructure and the supplier base; reduce service delivery costs through automation, industrialization and improved productivity; and save on non-labor IT costs through effective spending management.

Business process outsourcing can contribute to cost management in a number of ways. F&A BPO can help drive better financial transparency and cash performance while driving down costs. Procurement BPO can help drive sustained savings, increase transparency, and control and manage the supplier base more efficiently. And custom BPO solutions can be tailored to companies’ specialized cost management needs.

Whatever their needs — whether cost management, improving cash flow or strategic growth — companies have the ability to experience greater success through outsourcing if they select a provider with the global scale and the expertise to support their business as it grows and changes, especially in today’s challenging times.

What is Accenture’s experience with outsourcing services internationally and locally?

In BPO globally Accenture has 20 years of experience, over 350 clients, service client operations in 150 countries over 50 delivery locations, over 31,000 employees and supports 38 languages.

Global BPO Vertical and Horizontal Offerings include: finance and accounting, procurement, customer contact, learning services, HR, health administration, insurance, engineering, supply chain and utilities.

Local BPO Offerings delivered include: finance and accounting, procurement, customer contact, HR and recruitment, insurance and customer contact

How is the Bucharest center doing in Accenture’s business? What type of services does it offer?

Bucharest Delivery Centre has grown steadily since its creation in Q4 2006 with 25 percent growth in our last financial year ending August 2010.

What development plans do you have in the coming period?

We have, for the next 12 months, 35 percent employee growth already planned in terms of contracted client deals and we expect this to grow further as we close out more opportunities. So our key focus is to attract, recruit and train the best language skilled talent in the market and to continue to grow and mature our current teams to deliver high quality service to our current and future clients.