The choice and process of outsourcing financial tasks has to be a carefully evaluated process. The reason is that a minor mistake in this regard can 'make' or 'break' the future prospects of the organization. Both the involved partners need to understand the causes of outsourcing this job and weight the 'costs incurred' and 'benefits experienced' in the light of those realities. The assessment of this process is possible by using the indicators under various perspectives like- Screening, Outsourcing Partner Capability, Outsourcing Process assessment and Benefits Accruing from the job. The parameters under Screening can be- Infrastructural and Technological Competency, Staff Training and Learning ability, redundancy factor and Number of Support Systems. These help in finalizing the grounds on which the weeding out of the 'non-suitable' partners from the lot can be done. Outsourcing Partner's capability can be judged using metrics like 'accuracy meeting ratio', 'expectation fulfillment ratio', 'pre-set requirement conformance degree' and 'migration and streamline index'. The process of outsourcing can be assessed by using the parameters such as 'task outsourcing fraction', 'decision making alignment', 'on-going accounting savings' and 'cost savings ratio'. Finally, one can gauge the benefit that accrue from the outsourcing by using the indicators such as 'increase in other activities', 'quality assurance index', 'number of data security measures adopted' and 'number of successful projects that occurred because of the financial outsourcing decision'.
Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
Ideally, you need to have a strategy (in a form of a strategy map) before you start thinking about the ways to measure its execution (KPIs). Don't have a strategy map yet? Use free Strategy Map Wizard to create a strategy map for your current business challenges. The wizard will:
The whole process takes on average 6 minutes. Give it a try right now - it's free.
bonus.
Financial outsourcing is about handing over the 'financial operations' to an outsider, who is believed to be more proficient at carrying out those tasks. The concerns can be either 'lower costs' or 'expertise' that compels the concerned organization to go for outsourcing its financial operations.
The off-shoring decision however, always has to be a very well-thought one as the quality of output from outsourcer i.e. outsourcing operations can 'make or mar' the growth of 'receiving organization'. Moving on, looking at the fact that 'finance drives everything', it becomes all the more important to choose the outsourcer intelligently after giving a good look at all the aspects involved that possess even a 'minor' role in the process.
By preparing a balanced scorecard to reflect the factors having an impact on 'growth of outsourcing act', it is possible to calculate the movements and make further improvements.
This 'measurable approach' sets the stage for a successful 'financial off-shoring relationship'. The underlying reason is the transparency brought with this tool, thereby enabling all the involved parties know about the events and happenings of the act.
This is the actual scorecard with Financial Outsourcing Dashboard and performance indicators. The performance indicators include: screening perspective, infrastructural and technological competency, staff training and learning ability, redundancy factor, number of support systems, outsourcing partner capability perspective, accuracy meeting level, expectation fulfillment ratio, migration and streamline ease index, pre-set requirements conformance degree, outsourcing process assessment perspective, task outsourcing fraction, decision making alignment, on-going accounting savings percentage, cost savings ratio, benefits accruing perspective, increase in other activities, quality assurance index, number of data security measures adopted, number of successful projects that occurred because of financial outsourcing.
Download a trial version of Financial Outsourcing Estimation Balanced Scorecard or purchase a full version online.
How is this book different from 796 other book titles about KPIs on Amazon?
"Before writing a single line, I formulated some guiding principles, one of them was: "If our clients ask, "How can I find a good KPI for..." - I want this book to provide a perfect answer."
