March/April 2009 www.FAOToday.com

Cover Story
around solutions, to pushing all non-core finance
functions to a center in India with Outsource
Partners International. With employee
turnaround at senior level positions high,
morale was running extremely low among the
accounting staff. The company was looking to
reduce run rate costs by up to $1 million. It
needed drastic change but lacked the in-house
resources to pull it off.
The right relationship was critical, in terms
of gaining executive sponsorship, executing
the plan, getting the right people working on
both sides of the plan, and avoiding excessive
whining. The chosen approach was a deep
dive, with no turning back.
Targeting the change agents was important,
said Jones and Sawyers. A senior finance officer
became their advocate of change, having
been through outsourcing in the past. He
knew the culture of the company and the
other people involved in the transition. Next,
they focused on standardization and communication.
Sawyers joked, “Communicate the
way we vote in Texas—early and often.”
The company conducted a site visit to India
to get to know the team. Sawyers noted that
cultural training in the U.S. isn’t always sufficient.
“In some cultures, saying ‘yes’ doesn’t
necessarily mean ‘I understand.’ Don’t assume
they really get it. Read between the lines. Dig
down and make sure people understand you.”
The on-site transition team held mixers
with employees. To create synergy, they
treated their outsourcing partners as employees.
Again, their success hung on communicating
and fostering a good relationship.
“What you don’t know really hurts productivity,”
said Jones. “Time differences matter.
We wanted our Indian partners to have a life,
so we agreed to split the schedule. We didn’t
realize how much backing up we do at night
when our partners are trying to get onto the
system, creating more latency issues.”
An additional gap existed in that the outsourcing
partner was moving toward a paperless
world, while SourceCorp were not. While
the outsourced team was sending information
electronically, U.S. employees were trying to
figure out how to print it all out. “We had a
gap to bridge,” said Sawyers.
To ensure communications were effective,
SourceCorp coached its team not to damage a
good relationship by inadvertently using the
wrong tone and coming across the wrong way.
Their advice:
• Set expectations early and monitor them.
• Facts and examples work best. Don’t be
too general. A conversation with a third-party
provider in a low-cost economy can be similar
to a conversation with your 17-year-old daughter:
“ Where you going?” “Out.” “Who you
going to be with?” “People.” SourceCorp
learned to find ways around that.
• Be fact-based to discover situations and
turn them around. Reconciliation wasn’t good
because the preferences weren’t the same.
Having established the base for a good relationship,
SourceCorp’s engagement has
‘Given the complexities
of the outsourcing
environment, we will
need to elevate the
game for our teams to
achieve FAME: Focus,
Align, Mobilize and
Execute.’
— Manish Sahai,
American Express
evolved to handle what they refer to as
STRM: Stuff That Really Matters. “We realigned
the department, pushing more work,
all transactional-level processes offshore to
India,” said Jones.
Continuing the theme of relationships and
communication, Manish Sahai, vice president,
Service Network Partners, Customer Service
International at American Express, spoke
about the importance of selling the business
case internally. “Given the complexities of the
outsourcing environment, we will need to elevate
the game for our teams to achieve
FAME: Focus, Align, Mobilize and Execute,”
he said. “You need to make sure there is alignment
up and down the entire organization.
You have to mobilize your business partners, as
well as your own organization.”
In preparing for the future, corporations
must focus on talent and their partner’s performance.
Sahai also noted that corporate social
responsibility will become key for many
companies from a branding perspective.
“The winners of the outsourcing industry will
know the art and science to consolidate, standardize,
and innovate in their partner relationships,”
he said. “They will be the ones that are
able to deliver business value and service excellence
through world-class partnerships.”
The development of any world-class partnership
has to include a certain amount of
managing expectations. Robert Arthur, chief
of staff of SourceNet Solutions, commented
that very often clients don’t know how to set
reasonable expectations.
Clients that have large-scale implementations
present challenges in the complexity of
their ERP systems. For example, said Arthur,
they might have three diverse ERPs, but want
to consolidate into one. Or, they might have a
timeline for what they are trying to accomplish,
but never meet it. “We set up the pricing,
plan the workforce, and operate based on
those timelines,” he said.
He noted that in the early days of outsourcing,
prospective clients were continuously asking
SourceNet to show them the data; now, the
question is what do the data tell them, and what
will they be able to do with that information?
One of the biggest lessons he said the company
has learned is that the industry is evolving
and constantly moving. In addition, other
groups besides CFOs are getting involved in
the processes. “We will see more creative ways
to generate working capital through processes”
in the future, he said.
SETTING STANDARDS
Other measurable trends gathering steam in
the industry are forming in the areas of standards
and practices. Bill Frech, partner and
managing director of CFO Services for TPI in
North America, noted that one of the latest
trends is that people are looking for smaller,
shorter-term deals. “They are outsourcing a
subset of the area they are looking at—they
might start with accounts payable or receivable
and test the marketplace, make sure it
works, but then we are seeing shorter term
deals, below the five-year mark.” He has also
noticed more providers trying to serve the
mid-sized market, although few have figured
out how to support it yet.
In addition to the movement toward “getting
small,” with smaller deals, smaller scope,
and smaller clients, the experts commented on
a need to establish industry-wide standards.
Bob Cecil, executive director of EquaTerra’s
Business and Financial Processes practice,
52 FAO Today March/April 2009 www.faotoday.com