Companies continue to favour shared services centres over more traditional outsourcing methods – and finance and accounting functions are a big part of the consolidation conversation, a KPMG survey found.
Fifty-two per cent of survey respondents in the first quarter said centralising functions in shared services centres was their strongest area of growth. Survey participants were two dozen IT service providers whose clients outsource services.
Shared services, or the centralising of functions once performed in separate divisions of a business, was cited as the strongest area of growth (52%). Just 37% said they have seen growth in demand for traditional information technology outsourcing and just 27% for traditional business process outsourcing.
IT was the functional area where shared services approaches were most commonly used (63%), followed by finance and accounting (51%). Other areas the survey focused on included human resources, customer care and call centre, and procurement.
The survey also found that providers are seeing an increase in the use of cloud computing to complement, extend and, in some cases, supplant traditional outsourcing. In the next 12 months, live (as opposed to pilot) cloud services deployments at the business unit level are expected to rise to 92% from the current 50%.
“These findings highlight the fact that buyer organisations need to continue to improve their cloud skills and acumen, especially relative to addressing data security, risk and regulatory compliance requirements,” Stan Lepeak, global director of research for KPMG Shared Services and Outsourcing Advisory, said in a press release.
Overall outsourcing trends are expected to remain stable over the next year, according to the spring 2012 KPMG Global Business Outlook Survey. Sixty-eight per cent of the 6,200 companies that responded to that survey said their companies will be doing the same amount of outsourcing, while 14% indicated their outsourcing levels will increase. The number of respondents unsure about future outsourcing declined to 10% from 17% in the fourth quarter.
Additional CGMA Magazine resources
- Shared services: The keys to success: Shared services are no longer solely the preserve of large organisations. So what are the benefits for midsize businesses, and how can they manage a successful transition to shared services? Shared service centres rose to prominence in the early 1990s.
- Offshoring of back-office jobs to level off, study predicts: Employers continue to move business services jobs from the US and Europe to low-cost countries, but research suggests that the number of IT, finance, human relations and procurement jobs that can be offshored is dwindling.
—Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.