Outsourcing as a productivity tool: highlights from a recent forum explore how outsourcing can enhance efficiency, especially in the finance function.

• Author: Marshall, Jeffrey
• Position: Special Report: Productivity Challenge

The word "productivity" conjures up dry statistics offered regularly by economists and economic luminaries like Federal Reserve Chairman Alan Greenspan. Broad macroeconomic indices of corporate productivity are widely watched, important and the subject of considerable debate.

But internal company productivity is clearly more of an issue for company managers trying to drive results. Objectives there often fall into the realm of efficiency -- getting the most bang for the buck by driving the most revenue out of the infrastructure. In recent years, outsourcing has become an important component of that strategy and has become widely seen as a way of both cutting costs and improving efficiency.

At a recent seminar sponsored by Creditek, a firm specializing in outsourcing accounts receivables and related finance functions, a group of experts analyzed what outsourcing can mean, both in general and for improving the finance area. The session, held during the summer in New York, was moderated by Financial Executive Editor-in-Chief Jeffrey Marshall and brought together: Joseph Shalleck, a partner with Marakon Associates; Richard Roth, managing director with Hackett Benchmarking & Research; Corey Torrence, CEO of Creditek; Kathleen McCabe, a vice president with the Corporate Transformation Group at Morgan Stanley & Co.; and Joe Vafi, a vice president and analyst at Robertson Stephens & Co. A similar session was planned for FEI's Forum on Finance and Technology in September.

What follows are excerpted highlights of a transcript from the session.

STRATEGY:

SHALLECK: How do you develop a strategy and deliver that strategy in a way that returns and growth will exceed investors' expectations? That gets into the business models that you develop and the way you implement them... Improving shareholder value is the product of this long chain of activities that actually starts with the capabilities in the organization and stops along the way in the strategies that you choose...

If you're able to manage receivables and working capital better than your competition, that's going to give you an advantage in product markets. So you can set various benchmarks for yourselves and think about improving your service quality and your efficiency relative to those benchmarks...

Another view is: well, let's use outsourcing, but let's use it tactically in areas where, on an individual service basis, it makes sense. And there's a long list of companies that are using a mix of...