The Problem of Silos in Outsourcing

Filed in archive Best Practice on July 21, 2008

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In a recent posting, Cathy Tombohm of Gartner is quoted as saying "[w]e strongly advocate a joint approach by finance leaders and their CIO to ensure that BPO deals are successful." To those of us who have participated in multiple outsourcing deals, this is self-evident. However, many customers fail to involve key company constituencies when outsourcing, leading to delays and challenges in execution of the deal.

There are many reasons why companies do this - departmental siloing, a desire to keep things quiet, internal power struggles, frustration with IT, frustration with legal, etc. However, with IT providing the nervous system of every corporation, not involving them early can mean that certain expected functionality is missing from the project, that project delays adversely affect the implementation guidelines, and that unexpected costs seriously compromise the project's ROI.

It is important, therefore, to involve these key players in an F&A (or any other) outsourcing early in the process - to ensure that the economics of the deal work and that the processes and procedures used by the BPO provider can be implemented in a timely manner.