Outsourced Finance Global Delivery Model

Outsourcing financial responsibilities has matured with businesses around the world. Outsourcing finance functions such as bookkeeping, auditing and other services are more efficient in terms of cost and time. The Outsourced Finance Global Delivery Model (GDM) provides a comprehensive solution that can be adapted to fit the specific needs of each individual business. It offers a unique blend of accessing resources onshore or offshore for ultimate convenience, cost-effectiveness, and scalability. GDM has become the go-to strategy due to its versatility and ability to meet an array of organizational needs while still optimizing efficiency and productivity. This has been especially beneficial during this time of widespread disruption, providing business partners with the solutions they need in order to succeed.

The Face of Outsourced Finance Global Delivery Model

Gartner defines a Global Delivery Model as
“the optimum combination of processes, end-to-end methodologies and quality procedures, with high-quality skills and resources available internally or externally, in requisite quantities, on a global basis, that enables organizations to maximize the quality of their solutions while minimizing the overall cost and delivery time of their finance outsourcing services.”
Transferring the complete Finance process operational responsibilities to third-party Solutions Partner or establishing a shared services centre offshore from one or more Global locations is what we refer to as the Outsourced Finance Global Delivery Model. Operational teams are assigned several tasks. The procedure is managed via distributed project management. This methodology can also be utilized to deliver a project that is specifically tailored to the needs of the client.

There are various kinds of models:

1. Onshore Delivery Model
2. Nearshore Delivery Model
3. Offshore Delivery Model

Onshore Delivery Model

Here, from the initial consultation to project completion, the Solutions Partner is situated on the client's site(s). The client will interact with the representatives in person. Additionally, a thorough comprehension of the needs and guidelines of the client. Communication and information flow is most effective in this model, allowing for improved management and control.

Nearshore Delivery

According to this strategy, a consultant works remotely while living in the same city or nation as the customer. Multiple onshore work sites might exist. Some Solutions Partners may work on-site for the client, while others may operate from a remote location within the same region. This paradigm might incorporate both Onshore and Offshore components.

Offshore Delivery Model

From the beginning to the end, every task will be completed at one or more offshore locations by an outsourcing team. For improved project control and manageability, project or delivery managers allocate tasks at both the client's and the offshore location.
Some businesses employ a hybrid model, which combines Onshore, and offshore methods. The cost-effectiveness of the offshore approach is offered by the hybrid. But it also enables face-to-face communication. Both of these are essential to avoid communication lapses and guarantee the success of your efforts.

How Finance Processes succeed in Global Delivery Models

Accounting processes are no longer seen as separate activities with distinct goals. They now have a broader mandate to be delivered in collaboration with associated procurement and supply chain operations. Accounts payable, for example, is both a transactional Accounting and a transactional procurement process. It has been repurposed under the description of Procure-to-Pay (P2P), which includes end-to-end delivery of accounts payable, travel and expenses, invoice processing, Requisition-to-PO, sourcing support, and inventory management. Similarly, the F&A definition now includes end-to-end procedures such as Order-to-Cash (O2C) and Record-to-Report (R2R). As a result, mature GDM provides seamless delivery of the Finance & Accounting process with minimal duplication of effort.
FP&A uses automation in the service delivery model to gather internal data from cross-functional systems and mix it with external data about customers, economic conditions, emerging legislation, and more. FP&A will be able to produce considerably more accurate and constantly refreshed projections in a fraction of the time by combining this data with advanced analytics.
By having these processes setup and run through Global delivery models, businesses are able to leverage on efficiency, unmatched access to talent and business continuity.

Six pillars of Global Delivery Models

Our effective method for interacting with clients and providing them with value is the Outsourced Finance Global Delivery Model and this is supported by six pillars:

Engagement Model
Processes
Tools
People
Infrastructure
Governance

Engagement Model

Determining the engagement model is the first step toward a brilliant Outsourced Finance Global Delivery Model. This enables flexibility in construction. The most popular engagement models include the following:

Fixed price
Time & material with SLAs
Retainer-based model with SLAs.

Model	When to use?	How does it work?
Fixed price	When at least 80% of the needs are known, a fixed budget and cost are employed. This is Helpful in providing a fixed cost, fixed timetable, and a defined scope.	Collaborative participation from clients and stakeholders to gather requirements, clarify scope, and make prompt decisions.
Time & material	Expected modification in scope. Projects with evolving requirements and undocumented processes. High dependency on stakeholders for decision making and external factors.	This model employs the capacity-building approach and takes into account the amount, complexity, and utilization of technology. Customers can use this approach to find specialist teams and reserve time for work. Costing is calculated using team members' actual hours worked.
Retainer-based	Hours that are guaranteed to be a definite number and a fixed team.	For long-term contracts where knowledge retention is crucial, this model is helpful. With full visibility of productivity, this model enables customers to work with particular, identified teams during optimal hours.

Processes - Outsourced Finance Global Delivery Model

When the proper set of procedures are followed, engagement models are successful. An engagement's key components, including global programme management, risk management, communication management, and planning and oversight, are all integral parts of the model and critical to the success.

People

In the knowledge economy, "people" are seen as the most valuable resource; in fact, this concept is frequently acknowledged as the foundation of the Outsourced Finance Global Delivery Model. Excellence in delivery is ensured in large part by skills and competences.
In a Global delivery model, based on skill shortages, competency development is done, and a framework like this makes sure that skills are updated frequently. The competency-based framework is a cutting-edge method of determining the degree of abilities needed for various job profiles. By ensuring that the appropriate candidates are found and hired for the appropriate positions, this structure contributes to increased productivity.
These competencies can be divided into:

Vertical Competencies
Technical Competencies
Functional Competencies
Behavioral Competencies

For each role and level, the framework establishes the minimal competency standards, which are subsequently evaluated using tools and interviews.
Engaging them emotionally and intellectually is another factor to take into account. Innovative approaches for employee involvement include entrepreneurial endeavors, innovation hubs, etc.

Infrastructure

The fifth pillar, infrastructure, is extremely important in many different ways in a framework for Outsourced Finance Global Delivery Model.The global data center market garnered a market value of US$ 101.79 Billion in 2022 and is expected to accumulate a market value of US$ 209.8 Billion by registering a CAGR of 7.5% in the forecast period 2022-2032.
IoT, Cloud, etc., together with data, analytics, and insights are now easily accessible thanks to the development of digital infrastructure, which has made the globe a highly linked place. SaaS (Software as a Service) is becoming the new standard as the globe migrates to cloud-based infrastructure.
However, this is posing challenges on disaster recovery and business continuity more difficult. It has become absolutely essential to be able to offer high uptime, disaster recovery, and availability 24 hours a day.
Infrastructure is necessary for the delivery of digital services, and without those services, infrastructure providers would have little use for their facilities.
Two critical aspects in this include:

Information Security
Business Continuity

To assess risks and vulnerabilities, businesses need to carry out adequate and timely assessments. Additionally, exercises in gap analysis and vulnerability assessment may be beneficial in this regard. A strong cloud security framework, coupled with business continuity and disaster recovery technologies, are required to counter attacks. To ensure that the repairs work, it is crucial to first identify the business risks. Take into account the following elements to identify threats:

Nature of business
Nature of assets and their vulnerabilities
Review of existing controls
Observations and interviews of employees
Incidents that occurred
Feedback and opinion of management

Regular business impact analyses are performed to pinpoint the most important company infrastructure, projects, and procedures. The results aid in determining the degree of risk, its criticality, and its influence on projects and data.

Governance

The sixth pillar of the Outsourced Finance Global Delivery Model, which has developed through time, is governance. The following are the main parts of the governance framework:
Communication Metrics and Management Reporting Compliance on regulations and models Engagement Reviews

1.Communication:

This is an important aspect in any governance model that comprises different types and mechanisms of communication. A good communication plan can bridge gaps between distributed teams.

2.Metrics and Management Reporting:

Visibility in service provision, productivity, utilization, and timelines are some of the most critical elements in an engagement. These can best be achieved via real-time visibility and usage of tools.

3.Compliance on regulations and models:

Governance is significant from the compliance and regulatory standpoint. Third-party audits and security frameworks are critical. Implementation of standards such as ISO27001:2013 help achieve a majority of the regulation requirements.

4.Engagement Reviews

Governance and reviews go hand in hand. Timely evaluations of project planning, execution, and delivery as well as risk management can assist in taking appropriate action. Additionally, independent opinions on ensuring conformity with standards and models are provided by third-party audits and quality assurance reviews.

Benefits of Outsourced Finance Global Delivery Model

Helps to minimize cost & offers 24x7 resource convenience.

Expertize and knowledgeable Operational team.

Distribution and integration of workload in a smart manner.

Faster response to changing client requirements.

Mix and match Onshore and offshore resources.

Prolonged workday and handover to onshore teams by offshore teams provide faster project completion

Back-up facilities in global locations in case of emergency or natural disaster.

Highly accessible and flexible resourcing which provides low risk.

Improves transparency and visibility.

Diverse work environment.

Challenges of Outsourced Finance Global Delivery Model

Challenges on virtual Communication

Timezone Coordination

Cultural Sensitivities and Relationship Building

Despite the above, GDM offers significant benefits in terms of costs, resources, and project completion time. The service model has matured over time and now is globally accepted as well.

In Summary

The Outsourced Finance Global Delivery Model (GDM) is an effective solution for businesses that wish to reduce costs without compromising on project quality. This strategy provides a framework with techniques for success and aims to achieve a consistent resource supply with geographically distributed teams offering dynamic and adaptable finance solutions. GDM has enabled businesses to save time and money by utilizing experts from all over the world while remaining dedicated to meeting the highest standards of quality and service.

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