Advancements in technology, combined with a growing demand for consistent processes across organizations, are encouraging more companies to centralize their finance operations.
A recent survey of 200 U.S. CFOs conducted by Everest Group, revealed that 49 percent of respondents have fully centralized their finance and accounting processes. This means these functions are now managed entirely by corporate finance teams, reflecting a significant shift toward streamlined, organization-wide operations.
An additional 35 percent of CFOs reported using a “hub-and-spoke” model. In this approach, a centralized team develops standardized finance processes, policies, and procedures, while individual business units or departments tailor execution to their specific needs. Meanwhile, 17 percent of CFOs continue to rely on decentralized models, where finance operations are managed independently by individual business units.
The movement toward centralized finance models is largely fueled by the deployment of advanced technologies. These include process automation, analytics, artificial intelligence (AI), and machine learning, which are often integrated into existing IT infrastructures. Although many enterprises still rely on outdated legacy systems, more organizations are adopting tailored tech solutions to improve efficiency and streamline operations.
According to the survey, centralized finance models deliver multiple benefits:
Streamlined operations and workflows
Consistent policies and procedures
Enhanced data accuracy and control
Economies of scale
Increased organizational efficiency
Business process outsourcing (BPO) is also playing a critical role in reshaping finance operations. CFOs in the survey identified management reporting, billing, accounts receivable, and capital budgeting as finance areas with the highest return on investment (ROI) from outsourcing. Operational efficiency was the most cited objective for outsourcing, followed by improving business metrics and customer satisfaction.
The survey findings show procurement as a good starting point for organizations hesitant to outsource. Even small cost savings in procurement can yield substantial financial benefits.
Overcoming the resistance to change is critical, the survey noted. Deeply entrenched legacy systems and stop-gap solutions often lead to wariness about adopting new technologies or processes. Concerns about potential implementation errors, high costs, and disruption to current operations remain common.
As companies continue to weigh the costs and benefits of centralization and outsourcing, the adoption of advanced technologies and innovative operating models will remain a key driver of transformation across the finance landscape.
Outsourcing finance processes to CFO service providers offers companies access to high-level financial expertise without the cost and commitment of hiring full-time executives. These providers bring a wealth of experience in areas like strategic planning, forecasting, and process optimization, enabling businesses to address complex financial challenges efficiently. By leveraging outsourced CFO services, organizations can focus on their core competencies while benefiting from objective insights, advanced technologies, and industry best practices. This approach is particularly advantageous for small to mid-sized companies that may lack the resources to build a robust internal finance team but still require the strategic guidance and operational support needed to scale effectively.
If you are a business owner or CEO within the San Francisco Bay Area and Silicon Valley, in need of an experienced fractional or outsourced CFO to help your company control costs, increase profit margins, improve cash flow as well as identify strategic growth opportunities, our highly skilled outsourced CFO services provide direct access to high-quality expertise in a cost-effective manner.
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