Outsourcing the Financial Chain: an Empirical Analysis of Sourcing and Partnering Potentials

While many firms have used advancements in information and communication technology to optimize their supply chain and primary processes, there is still a substantial efficiency potential associated with financial processes. In this paper, a conceptual framework for a systematic financial chain management is developed. Based on this, an empirical survey with the Fortune 1,000 enterprises of Germany shows that while outsourcing of the financial chain is still quite rare it can be successfully used to focus on core competencies. A main finding is that CFOs tend to systematically overestimate the quality of their financial processes and especially the firm’s competencies compared to external experts. This is an important cultural barrier to a value redesign that could offer substantial efficiency improvements.