Upfront: Shared Services Trumps Finance Outsourcing

The high profile that finance-function outsourcing enjoys in the media belies the fact that most companies opt for a shared-services approach instead. According to research from The Hackett Group, companies outsource only 4 percent of all finance processes, while they turn to onshore or offshore shared-service centers to manage 65 percent of them. Although the surveyed companies said they expect to more than double their use of outsourcing in the next three years, they will also slightly increase their reliance on shared-service centers. The survey report predicts that shared services will remain the preferred sourcing alternative for finance by a wide margin.

"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," says Penny Weller, a Hackett senior business adviser in Atlanta. "But our analysis tells a very different story. While companies are looking at expanding their use of outsourcing and offshoring, it represents an almost insignificant portion of their finance efforts. In fact, it's the least popular sourcing option we looked at."

The study also found a clear trend away from decentralized finance operations. Today, 27 percent of finance processes remain decentralized, but respondents expect this number to decrease by more than half within the next three years.