ANSR Hackett Grp., Inc.(The) (MM)

Study Shows That Only 4% of Finance Processes are Currently Outsourced, While Companies Use Shared Service Centers 65% of the Time Despite the widespread attention and publicity paid to finance outsourcing, companies are doing very little of it today, and onshore or offshore shared service centers remain the preferred options, according to findings of a new Business Process Sourcing study from The Hackett Group, a strategic advisory firm and an Answerthink company (NASDAQ:ANSR). Hackett's study found that companies today outsource only 4% of all finance processes, while they turn to onshore or offshore shared service centers 65% of the time. Companies said they expected their use of outsourcing to more than double in the next three years, but reliance on shared service centers will increase slightly as well, and shared services is expected to remain the preferred sourcing alternative for finance by a wide margin. While the majority of shared service center utilization is currently onshore, companies also said they planned to nearly double their use of offshore shared services over the next three years, from 7% today to 13%. This makes offshore shared services nearly twice as attractive as outsourcing to companies, today and in the near future. "It's not hard to find people who will tell you that comprehensive or full-service outsourcing is a tremendous growth wave in finance right now. But our analysis tells a very different story," said Hackett Senior Business Advisory Penny Weller. "While companies are looking at expanding their use of outsourcing and offshoring, it represents an almost insignificant portion of their finance efforts today. In fact, it's the least popular sourcing option we looked at. Meanwhile, companies are seeing tremendous value in moving finance processes to shared service centers, and are making this their primary sourcing approach." According to Hackett Senior Business Advisor Julio Ramirez, "There's no doubt that there are potential benefits to outsourcing finance, such as leveraging lower-cost labor or getting access to critical systems to enable process automation. But companies can get much of this benefit by taking a best practices-driven approach to shared services. Then, once they have streamlined and centralized, they often look at whether finance processes can be eliminated completely through technology, and sometimes consider selective outsourcing. But in most cases, companies see the perceived risks of outsourcing finance, led by compliance and control concerns and unknown total costs, as far outweighing the benefits." Hackett's study, which looked at 11 finance process areas, also found a clear trend away from decentralized finance operations. Currently, companies reported that 27% of finance processes remain decentralized, making this the second most popular sourcing alternative. But in three years, companies said they expect this number to be reduced by more than half. At the same time, in addition to an increase in the use of shared services, companies said they expect to increase by 150% the number of finance processes that are fully automated. To see the full version of this research, please click on the following link for the Hackett Research Insight Center: http://www.thehackettgroup.com/insights/fin0406 Companies interested in participating in The Hackett Group's next annual Business Process Sourcing study can visit the following link to find and complete the survey form: http://www.thehackettgroup.com/surveys/sourcing More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at info@thehackettgroup.com; or on the Web at http://www.thehackettgroup.com. About The Hackett Group The Hackett Group (http://www.TheHackettGroup.com), a strategic advisory firm and an Answerthink company, is a world leader in best practice research, benchmarking and business transformation services that empirically define and enable world-class enterprise performance. Through the acquisition of REL Consultancy Group, a global leader in generating cash improvement from working capital, we offer Hackett-REL Total Working Capital services to liberate cash flow from operations through improved working capital, reduced costs and increased service quality. Hackett-REL has helped clients in more than 60 countries free up over $25 billion through working capital improvements in the last 10 years alone. Only The Hackett Group empirically defines world-class performance in sales, general and administrative (SG&A) and supply chain activities with analysis gained through 3,500 benchmark studies over 14 years at 2,000 of the world's leading companies. Our clients comprise 96 percent of the Dow Jones Industrials, 77 percent of the Fortune 100 and 92 percent of the Dow Jones Global Titans Index.