UK: Financial Planning & Analysis - The Next Frontier Of Business Process Outsourcing?

Last Updated: 1 March 2012
Article by Deloitte LLP

Most Read Contributor in UK, August 2017

Financial Planning & Analysis (FP&A) outsourcing is increasingly being used by leading global firms to provide a competitive advantage while others are using the opportunity to uncover additional savings by leveraging a wide range of service delivery options and process improvements to reduce costs and generate additional value.


In the past two decades, we have found that CFOs of large global companies have grown increasingly comfortable outsourcing transactional elements of their finance function; however, many remain apprehensive about outsourcing more complex, Financial Planning & Analysis (FP&A) processes. Nevertheless, some leading companies are exploring FP&A outsourcing as a means to develop a competitive advantage by reducing costs and increasing efficiency amongst a traditionally high cost, skill intensive set of finance activities.

While there are additional complexities associated with outsourcing FP&A, vendors have worked dili gently to develop capabilities and tools to make FP&A outsourcing a viable option. FP&A typically requires more judgment and finance experience than other functions and, therefore can provide significant potential for savings from automation, centralization, standardization and outsourcing. Additionally, many of these processes are judgment based, requiring a close working relationship with business users and corporate leadership. Vendors are focusing on developed, highly educated offshore talent with significant functional knowledge and experience in FP&A to support these offerings with marquee clients.

FP&A outsourcing is becoming the next process to outsource for many companies on the leading edge. We expect that over the next few years, FP&A outsourcing will become an increasingly standard offering in the marketplace, as companies seek to achieve additional savings, improve capabilities and reduce cycle times.

This research is based on recent interviews conducted with leading FP&A Outsourcing vendors and Deloitte's observations from supporting clients. We will explore current vendor offerings, profile two companies' experi ences with FP&A outsourcing and highlight several important factors to consider when evaluating FP&A opportunities at your company.

The argument

Specific FP&A activities are increasingly being outsourced

Financial Planning & Analysis processes are commonly a level of complexity higher than the traditional, transac tional outsourcing candidate processes. Generally, FP&A activities can be broken down into four categories:

Financial Planning & Analysis processes are commonly a level of complexity higher than the traditional, transac tional outsourcing candidate processes. Generally, FP&A activities can be broken down into four categories:

  • Planning: Finance is typically heavily involved in building company strategic plans due to its proximity to financial data that drive planning decisions. These activities typically include:
    • Budgeting: Financial Analysts are typically heavily involved in both building budgets for business units and support functions, as well as monitoring expen ditures on an ongoing basis.
    • Forecasting: Forecasting of future financial perfor mance based on external market variables (inflation, foreign exchange, economic growth, etc.). Business forecasts are critical inputs into both budgets and strategic plans.
  • Management Reporting: The creation and updating of management reports is one of the more time consuming and high touch tasks within the finance organization and is thus a key driver of cost.
  • Decision Support and Controls: While there is no list of activities that comprehensively defines decision support, it generally refers to financial analyses that are performed to provide guidance on business decisions (e.g. pricing analysis, M&A analysis, activity-based costing and ad-hoc financial modeling).
  • Specialized Experience: These activities commonly include specialized services such as actuarial analysis, risk management and specific classes of asset management, such as real estate.

While many FP&A activities are candidates for outsourcing, CFOs generally prefer to retain Strategic Planning, since they generally don't want to lose a seat at the strategy table. Certain Decision Support activi ties that require customized analysis stemming from close proximity to, and knowledge of, the business are also strong retain candidates, such as Tax Policy and Acquisitions and Divestitures. However, budgeting, planning, and management reporting are seeing increased outsourcing activity which can often be centralized and standardized, using both process and technology solutions, while reducing traditionally high costs and resource-intensive, long cycle times.

Figure 1: Common FP&A process

Outsourcing FP&A activities can support substantial operational savings

While there are some risks to outsourcing FP&A activi ties, the benefits that some companies have gained are significant. FP&A is typically a large cost center due to the decentralization, customized nature of these processes and the traditionally high cost of experienced labor. However, outsourcing vendors seek to streamline the redundancy through process standardization and centralization. If done effectively, the number of FTEs required to perform various FP&A tasks may be significantly reduced.

Additionally, the decentralized nature of FP&A functions, with Analysts working in close proximity to the business means that many companies are not optimizing their cost footprint. Labor arbitrage through centralizing headcount in low cost locations continues to be a meaningful source for cost savings.

Lastly, vendors are investing heavily in FP&A as a future revenue growth area. As a result, vendors are placing an increased emphasis on building tools, processes, and methodologies that will differentiate themselves in the marketplace and drive further efficiency. As competition between outsourcing vendors intensifies with new entrants in the FP&A marketplace, we expect that customers will accrue many of the benefits from this increased competition.

Evaluating FP&A outsourcing can uncover incremental opportunities for savings

Through the process of evaluating FP&A outsourcing, companies often uncover opportunities for savings from other service delivery options, even if outsourcing isn't the entire solution. Companies frequently identify broken processes and systems ripe for redesign or improvement. Others are able to realize savings from the full range of service delivery options, including Centers-of-Excellence (CoE), Shared Services Centers (SSC) or a hybrid outsourcing and CoE/SSC framework. These hybrid models commonly outsource more transactional sub-processes, while more complex activities, including management of the outsourced resources, are consolidated in a specialized CoE within a captive Shared Services Center.

Across large global organizations, FP&A processes are often inconsistently and ineffectively performed, making centralization and standardization a significant opportunity to reduce costs. Due to the "embedded in the business" nature of many FP&A organizations, the business is accustomed to customized and ad hoc reporting and analysis, much of which does not add value. While some customized reporting and analysis is typically required to support business decisions, it is important for companies to candidly look inward and eliminate unnecessary ad hoc reporting that does not add value.

With a targeted evaluation of FP&A outsourcing, companies can identify a range of savings opportunities and may form Centers of Excellence (COEs), incorporate select sub-processes in Shared Service Centers or outsource specific activities. All of these potential solutions can reduce costs, improve speed and quality through centralization, standardization, and provide savings opportunities. Embarking on an evaluation of FP&A outsourcing can be an effective first step for those looking to embark on a broader FP&A transformation journey.

Outsourcing vendors are scaling up their FP&A offerings to meet new demand from current and perspective clients

As the broader F&A outsourcing marketplace matures, vendors have had to invest heavily in capabilities and methodologies to continue to win business, with some 3,000 staff performing these activities with the market-leaders alone...F&A vendors are all looking for their next big growth opportunity and most see FP&A as the most likely candidate. Vendors are investing heavily in capabilities for two reasons:

  • Strong FP&A capabilities will help vendors grow and protect their largest accounts. The same apprehension that prevents many CFOs from outsourcing FP&A in the first place will drive apprehension around switching vendors. We expect vendor success in outsourcing FP&A to drive longer-term partnerships.
  • Demonstrating a full suite of capabilities, including both transactional and FP&A, will best position vendors to win incremental business. We expect future deals to become increasingly comprehensive in scope. As the market for transaction-based finance outsourcing matures, it will be increasingly critical for outsourcing vendors to be able to win higher complexity work to meet growth targets. We expect FP&A to be a primary area where vendors will focus to drive incremental services.

The hardest part is the transition

Some CFOs may be apprehensive about outsourcing FP&A for good reason. At many large organizations FP&A processes and technologies vary between business units and geographies. This lack of standardization makes big bang transitions to 3rd parties difficult, complex and highly time consuming. As such, vendors are seeking to improve the maturity of their transition capabilities to both win the trust of skeptical prospective clients and to be able to deliver on their promises. Depending on the vendor, two primary areas of focus appear to exist:

  • The technology transition — Working with fragmented management information systems across different business areas and geographies can be extremely difficult for vendors to manage. Many vendors are focusing on technology and tool standardization as the key to transformation.
  • The knowledge transition — One of the most common knocks on outsourcing FP&A is that it is difficult to outsource context-based high value work. Some vendors are focusing on the operational transition processes, including knowledge transfer and change management methodologies to quickly up-skill their staff. Many vendors are developing some version of a phased transition approach to maintain business continuity and service quality during the transition.

Vendors who clearly define and demonstrate both technology and knowledge transition capabilities are gaining competitive advantage in this business process marketplace.

Case Study: Global Technology Services Firm Realizes the Benefits of Centralization and Standardization Through FP&A Outsourcing

The situation

A leading Global Technology Services firm had a large and decentralized global finance organization nearly double in size of its nearest competitor. A lack of standardized processes and disparate financial systems drove far too much focus on administrative tasks rather than value-added business insight, driving a negative perception of Finance amongst its business partners. Other problems included:

  • A lack of a company-wide data strategy
  • No global process standardization or leadership
  • Disparate financial applications utilized across geographies

The unfortunate result was that the finance organization could not provide the timely insight to support critical executive decisions, despite close dependency of senior line management on their decentralized finance partners. The outsourcing vendor was originally brought in primarily to provide transactional support.

The solution

The vendor quickly gained the trust of its client and rapidly moved up the value chain to perform FP&A activities including decision support, analytics, and overall business advisory services. The client's processes were moved to one of the Vendor's offshore CoE's to facilitate consolidation. The vendor developed a clear strategy for transition, including granular analysis of the individual activities performed by staff, and separated those that were predominantly transactional (i.e. journal entry) from those that were more analytical in nature (planning, forecasting, etc.)

The vendor also worked with the client to implement common data standards, and consolidated the clients retained FP&A processes into a single CoE. This consolidation drove scale and standardization of the client's processes. A "back office-front office" delivery model was implemented, whereby the vendor drove standardization and process automation across all back office work, freeing the front office team to focus predominantly on the CFO's agenda.

The benefits

  • Improved business insight-Report standardization and the introduction of a single monthly management performance metric package
  • Reduction in cycle time-Conversion of legacy ledger queries to a simpler and more efficient format drove a reduction in time spent building reports, and freeing time for analysis
  • Increased forecasting accuracy-Introduction of new processes and forecasting techniques reduced forecast variance by 20-30%
  • Increased productivity — Automation introduced by the vendor resulted in savings of 100+ man days annually.
  • Cost Savings — Client achieved finance savings of 10%

Case Study: Leading Minerals Company Realizes Reporting and Analysis Quality Improvement

The situation

A leading global minerals company struggled with the quality of management reporting, due to the proliferation of ad hoc reports that failed to provide timely business insights required for executive decision- making. A particular need was Activity Based Costing models that were used to understand efficiency across multiple business units.

The solution

The outsourcing vendor utilized an initial team of 30 people to centralize the reporting function. In doing so, it was able to implement standardized processes to provide real-time reporting. In all, the vendor took over the following processes for the client:

  • Information Systems (Balance sheet and related reporting)
  • Competitor Analysis (Segmentation, SG&A spend analysis)
  • Audit Support (Preparation of financial reports, close package)
  • Activity Based Costing (Implementation of ABC model, cost analysis and reporting)

The benefits

  • Reduction in turn-around-time of reports from four days to two for over 50% of management reports
  • Automation of 40% of reports
  • Introduction of value-add analytics
  • Improved report accuracy

Competitive pressures to reduce costs and improve FP&A performance are key drivers leading companies to evaluate service delivery options

The real value from the recent uptick in FP&A outsourcing is the benefit companies are able to realize from the process of evaluating outsourcing as an option. Digging into a process, understanding and documenting the real business requirements, pain points, costs and resources required to perform FP&A activities offers firms a chance to take a total transformation approach. When done right, such a transfor mation can not only increase the bottom line through reduced costs, as we've seen, but also support top-line growth with better quality/more effective and faster management information.

While the initial catalyst for evaluating a complex set of business processes like FP&A activities may be solution-driven, i.e., outsourcing, an unbiased analysis can uncover additional opportunities to reduce costs through the full range of service delivery options, including; Shared Services, Centers-of-Excellence, outsourcing or hybrid operating models together with a host of process and systems improvements. All of these potential solutions can help companies to reduce reporting requirements and cycle times, resources costs and requirements, and increase speed-to-market of critical business information to support leadership decision support.

Once considered an untouchable part of the Finance organization, companies are beginning to realize that there can be significant quality benefits to centralization and standardization by leveraging a full range of service delivery options. As such, vendors are playing their part in the outsourcing space by heavily investing in FP&A capabilities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.