Combining IT outsourcing and business process outsourcing initiatives under the same umbrella can bring major advantages -- for companies that can overcome the obstacles.

While a few companies still flinch at the thought of turning over their noncore processes to external providers, most organizations now see outsourcing as a crucial tool in this high-ly competitive business environment. "There's almost no escaping outsourcing," says Mark Hodges, chairman and co-founder of New York City-based outsourcing advisory firm EquaTerra Inc. "It's now a question of how a company approaches the issue."

IT outsourcing (ITO) and business process outsourcing (BPO) initiatives have become staples of corporate strategy. But some innovative companies are now moving beyond these basics by simultaneously outsourcing their IT function and select business processes to a single provider. "Bundling" these initiatives enables an organization to accelerate its drive to focus on its core competencies and on processes that add value to its products. And the cost benefits are attractive: Some businesses reap savings in the neighborhood of 30 percent more than they could achieve through separate ITO and BPO projects.

Bundled outsourcing is still in its infancy; its viability has been proven only in the last few years with advances in technology and improved integration of IT systems with business processes. As with any major outsourcing initiative, the barriers for entry are high -- a typical BPO deal now runs close to $69 million, according to London-based research firm Datamonitor PLC -- so executives are approaching this new strategy with caution.

Still, a growing number of CFOs are pondering the possibilities. "Today, business leaders recognize that it makes sense to restructure business processes at the same time they undergo major system implementations or changes," observes Andrew Kris, chairman of the advisory board for the Shared Services and Business Process Outsourcing Association (SBPOA) in Brussels, Belgium. "The combination of ITO and BPO can serve as a powerful catalyst for business transformation."

Venturing into bundled outsourcing requires considerable planning and keen attention to detail. In addition to a solid understanding of the projected cost benefits, decision-makers must have a firm grasp of their organization's core competencies and the initiative's probable effect on everyday business operations. Finance executives play a central role in any outsourcing project, and they must guide the extensive number-crunching and strategic analysis that a bundled outsourcing initiative requires.