STAMFORD, USA: Technology will play a key role in helping chief financial officers (CFOs) deliver on an increasingly complex agenda and understand what drives corporate performance and value, according to Gartner Inc.

However, increasing economic uncertainty means that the urgency to deliver this understanding is even greater, coupled with the need to reduce costs and optimize operating efficiency wherever possible.

Significantly restructuring finance operations can be challenging and many organizations are considering outsourcing some or all of their finance processes.

Finance and accounting (F&A) business process outsourcing (BPO) is becoming increasingly commonplace. Although the market for outsourced finance and accounting services is beginning to mature, Gartner maintains that buyers are often not sufficiently organized prior to outsourcing to fully realize potential savings.

"What is often overlooked is the vast amount of work that needs to take place in advance of outsourcing in order for the outsourcer to support these finance processes effectively," said Cathy Tornbohm, research vice president at Gartner. "It's important to avoid losing precious time at the start of the initiative through lack of preparation and to be able to cost accurately the business and IT implications of the outsourcing endeavor."

Ms. Tornbohm said that there are five common mistakes that organizations make when planning to adopt F&A BPO:

Mistake 1: Providing insufficient funding for the internal sourcing management team Many organizations fail to dedicate experienced staff to this initiative, leading to multiple problems in the early years of the deal. Gartner recommends creating a mixed discipline team comprising sourcing experts, IT and HR personnel and legal and operational members of the finance and procurement teams.

Mistake 2: Not including the IT team in the early planning stages of the F&A outsourcing project or in the transition planning stages. The IT layer is often overlooked by the business process manager in terms of the overall impact on the organization's IT and business intelligence strategies. Gartner advises the early inclusion of the IT team, including the software contracts manager as well as IT ERP and security specialists who can ensure that unnecessary delays in accessing internal systems are avoided.

Mistake 3: Racing to issue an request for proposal (RFP) to learn about the market, instead of conducting research to learn about the market. Gartner advises buyers to ask the BPO providers for clear guidance on how they will use the latest tools for automating F&A processes to enable the IT team to evaluate the different approaches. The best-practice use of sourcing and research consultants is also recommended together with gaining insight into the latest inshore and "nearshore" issues that have arisen.

Mistake 4: Asking the BPO provider to monitor too many service-level agreements (SLAs). The more mature adopters of F&A BPO have established fewer service-level agreements (SLAs) and not more than 15 key performance indicators (KPIs), even for complex work, making for more meaningful evaluation of providers. The CIO's team can help the CFO's team to prioritize which SLAs to focus on how to blend these with KPIs.

Mistake 5: Failing to get sufficient acceptance and collaboration for a project from business divisions and country locations, at the financial and technical support levels, and by the inability to obtain documentation about existing process activities. Integration with existing processes must be costed-out and agreed with the provider in advance. The CIO and team should be in a position to help the business make the optimal decision to pursue an internally managed shared-service center or outsource to a business process provider.

"We strongly advocate a joint approach by finance leaders and the CIO to ensure that BPO deals are successful," said Ms. Tornbohm. "Having an IT strategy that supports the whole organization is vital and the CIO can help the CFO's team to avoid common mistakes as well as taking proactive steps to ensure that team members are well briefed about all the technical and outsourcing implications at the start of the process and, indeed, whether the process is suitable and ready for outsourcing."