2007-03-28 09:03:59 -
LONDON, March 28 /PRNewswire/ --
- LogicaCMG Study Finds That Ever-Increasing Compliance and Regulation
Issues are Tying-Up CFO Resource
The burden of handling compliance and regulatory issues has become a
major obstacle to outsourcing finance and accounting (F&A) business
functions, according to research among UK CFOs by LogicaCMG, a leading
business consulting and IT services company.
Increased regulation and emphasis on governance was identified by CFOs as
the most significant barrier to outsourcing. Only seven per cent currently
outsource any F&A functions,
with 68 per cent stating that the burden of
current financial regimes is holding them back. The severity of sanctions as
a result of a regulatory infringement is an overriding factor in the CFO's
desire to retain direct control of their finance function.
Kevin Radley, UK COO & finance director at LogicaCMG, commented: "CFO
time is being tied up with the management of work that could potentially be
outsourced. They are currently dealing with day-to-day tasks when time could
be spent focusing on medium and long-term issues. This could leave companies
short of resource to manage mission critical business opportunities. The
number of recent M&A deals, and the prevalence of approaches made by private
equity companies mean that CFOs need time to develop and defend their
business position. They need to be focusing on the future not managing the
minutiae."
Over 50 per cent of the CFOs questioned had outsourced at least one area
of their business, and a further 19 per cent planned to use outsourcing in
the near future as a means of reducing costs. But the same CFOs are 66 per
cent less likely to outsource their own finance and accounting function than
they are to outsource other business areas, citing regulation and compliance
as the restricting factor.
The large amounts of financial management resource devoted to compliance
and regulatory issues, combined with day-to-day work means that senior
finance executives' time for other mission critical activities is limited.
"CFOs face a difficult choice. There is general acceptance at board level
that outsourcing is a very valuable business tool. Our research has found
that outsourcing is on the agenda of 84 per cent of leading UK companies and
companies that outsource their F&A functions have shown savings of up to 35
per cent. CFOs who introduce outsourcing have more resource and time to
manage the increased regulation and compliance demands. But concerns over the
loss of direct control and existing work load pressures are stopping them
from making the change," added Radley.
The research involved interviews with 50 of the UK's FTSE 350 companies.
Further face-to-face interviews were then carried out to get qualitative
insight in to the data. Most CFOs agreed that many payroll and general
finance activities were ideally suited to outsourcing, with only 31 per cent
saying that they would not consider this option. With 21 per cent saying that
they have plans to outsource their F&A function in the foreseeable future;
this could still become a leading area of cost savings for companies.
Notes to Editors
About LogicaCMG
LogicaCMG is a major international force in IT and business services. It
employs around 40,000 people across 41 countries. LogicaCMG's focus is on
enabling its customers to build and maintain leadership positions using
LogicaCMG's deep industry knowledge and its track record for successful
delivery. The company provides business consulting, systems integration and
IT and business process outsourcing across diverse markets including telecoms
and media, financial services, energy and utilities, industry, distribution
and transport and the public sector. Headquartered in Europe, LogicaCMG is
listed on both the London Stock Exchange and Euronext (Amsterdam) (LSE:LOG;
Euronext:LOG) and traded on the Xternal List of the Nordic Exchange in
Stockholm. More information is available at www.logicacmg.com.
Source: LogicaCMG Plc
