Despite the hype about outsourcing, companies are relying more on shared services for Finance and Accounting (F&A). As much as 58% of financial processes are executed in onshore shared-service centers, whereas seven percent of processes are delivered using offshore shared-services centers according to a study by the Hackett Group.

Sixty-five percent of companies polled leverage the shared-services model. Outsourcing — offshore and onshore combined — accounts for only four percent of financial-process delivery. Another four percent of the processes are fully automated, and are hence location independent. As much as 27% of financial processes are still executed in a decentralized manner (See Chart 1).

While the companies expect their use of outsourcing to more than double in the next three years, shared services is expected to remain the preferred sourcing alternative for finance by a wide margin. In the next three years, companies see 13% of their finance work being executed by offshore shared-services centers, which is significantly more than what they would deliver through outsourcing (9%) — onshore and offshore combined.

As much as 60% of respondents perceived compliance and control as the biggest risk in outsourcing, while culture (40%) and security (33%) figured as the other key risks (See Chart 2).