Business Administration Outsourcing



Until recently the benefits of outsourcing were available almost exclusively to the biggest companies alone. Only they offered the economies of scale that made it worthwhile for the largest outsourcing service providers — with their customized programs—to woo them. Small and midsized companies went uncourted and unserved. And these companies paid the price for that. That price was substantial. According to a mid-’2000s study by the Institute of Management Accountants (IMA), midsized companies spend 51 percent more on finance and accounting services than do large companies and maintain 79 percent more headcount. This cost is even more painfully felt in the HR department, where, compared to large companies, midsized companies maintain twice the headcount and rack up twice the expense.

Finance people are still dragged into the day-to-day transaction processing work, instead of analysis and decision making.