THE COMPETITIVE world of international business has left what was once considered the back-office safe haven relatively exposed. In an environment where senior executives are continuously looking at streamlining operations and minimising costs, more companies are choosing to outsource their non-core but critical functions to external specialists so businesses can focus on core operations. While the United States may have led the revolution in outsourcing of finance and accounting functions, Europe and Australia are fast catching up. With the trend more recently taking centre stage in this part of the world, outsourcing has become the buzzword in many Asian cities, including Hong Kong. More than 70 per cent of senior executives in a study conducted by Accenture and the Economist Intelligence Unit in 2003 forecast that demand in this area would become even 'more prevalent' over the next three years. 'Outsourcing will play a huge role in the growth of any business,' said Mark Brayan, chief operating officer of Talent2, an end-to-end human resources outsourcing solutions business, responsible for the payroll of more than a million people. Mr Brayan said outsourcing of finance and accounting functions would continue to soar in the next three years before reaching a mature plateau, when companies would start looking at other outsourcing opportunities. The most commonly outsourced finance and accounting functions include those that have a high transaction volume but a low value and are internally focused, including account receivables, financial accounting, billing and invoices. Raphael Young, senior manager with Accenture's Strategy Practice in Hong Kong, said outsourcing these functions meant companies could concentrate on the value-added finance areas such as strategic planning, business planning, accounts analysis, interpretations and special projects. 'Budgeting and forecasting are least likely to be outsourced,' he said. Outsourcing objectives have also changed slightly over time. 'While cost savings used to be the main driver of outsourcing and still remains important, corporations are now also wanting better control, transparency and risk management to fulfil compliance pressures through outsourcing so they can concentrate on high-value finance functions and make better business decisions,' Mr Young said. The Accenture and the Economist Intelligence Unit study found that some companies were increasingly using outsourcing as a strategic weapon for change. In particular, companies were looking to outsourcing as a way of shifting corporate structures so that they became more globally organised along business lines rather than being divided by geography. Outsourcing can also bring an outsider's discipline to reviewing and reshaping entire business processes, helping companies execute ambitious improvement plans, according to the survey, which was conducted with senior executives from 236 companies drawn from a variety of industries across North and South America, Europe and Asia. With multinationals leading the outsourcing trend principally because of their need to ensure consistency across global operations and meet specific compliance standards, a diverse range of companies have taken to the concept. From the energy sector to chemicals, logistics, travel and electronics, automotive to financial services, businesses are all waking up to the promise of outsourcing. Small, medium and large companies have all embraced the trend. Mr Brayan said: 'Clients can decrease or increase cost depending on the type of service they are after. Large companies typically go for more complex functions while smaller companies are after simple ones.' On average, companies were able to cut costs by 25 per cent and improved service quality significantly when they outsourced their finance and accounting functions, he said. In Asia, the outsourcing trend is gaining popularity and is set for further growth, given China's economic boom. Mr Brayan said that with companies fuelling growth through expansion and new hires, organisations were keen to capitalise on their talent by ensuring that staff focused on the core business and by responding to growth opportunities with a scaleable infrastructure rather than having growth hindered by the need to carry out back-office services. Other key reasons that could prompt organisations into outsourcing their financial and related functions include business contraction and operational complexity. Shirley Tsang, director of business services at Tricor, a Bank of East Asia Group company that provides integrated business, corporate and investor services for clients in the region, said there were 'hidden advantages' to outsourcing. 'Outsourcing ensures there is a guaranteed staff base at all times and companies don't need to worry about staff movement or employees going on leave,' Ms Tsang said. She said the consultancy handling the outsourced financial and accounting functions would be able to draw on a large pool of professionals with specific expertise that a large company would not ordinarily be able to afford, while small to medium-sized companies would often just make do with a jack of all trades to fulfil the functions.