South Florida-based Mt. Sinai Foundation didn’t need Moses to tell its executives they needed help in the accounting/finance area. The foundation was due for an annual non-profit asset audit, a requirement of the bonds that had been issued for its managed property, the Mt. Sinai Hospital. A subsequent product of this audit challenge revealed that although Mt. Sinai had an internal IT department, it was unable to support the foundation’s Windows 2000 network requirements, which was the basis for its back-office work.
The Mt. Sinai Foundation was dealing with a great deal of upheaval in its financial department. The foundation had gone through a number of internal changes, including three different directors. “We needed someone to pull everything together and create a uniform system in a stable, organized environment so we could complete our audit on time,” said Amy Perry, president and CEO of the foundation. “In the beginning, we didn’t anticipate having to outsource these duties. But we had to put together a consistent financial system and implement a software conversion. We discovered this would have been difficult for any one financial director to accomplish on his or her own, considering the expertise required.”
So the eleventh commandment was: Thou shalt outsource. Down from the mount came Total Support, a Miami-based firm specializing in a variety of back-office outsourcing services. For Mt. Sinai, Total Support took a two-pronged approach.
Initially, Mt. Sinai asked the supplier to standardize its financial system so the department could complete its audit, according to Carlos Garcia, president of Total Support. Then, the organization asked the supplier to identify its IT financial support shortcomings and develop a plan to address them.
“Total Support systematically developed a process that we could live with in the long term that will serve as a legacy for our financial department to work efficiently. They’ve become an integrated part of our team,” says Perry.
Perry says this outsourcing relationship is successful because both sides nurtured the relationship. Mt. Sinai had worked to develop personal relationships with it supplier, treating its team as if they were its employees, because from an operational perspective, that’s what they are. “Outsourcing is people driven. The supplier has to be a cultural fit that will integrate with your culture.”
A New Breed Of BPO Supplier
More and more companies are considering back-office outsourcing at this stage in the economy. “There is an increasing trend in the marketplace to outsource back-office functions,” says Frank Guerra, an attorney with the Miami, Florida firm of Bilzen, Sumberg, Dunn, Baena, Price and Axelrod LLP. Guerra specializes in BPO.
According to Garcia, companies may be comfortable with outsourcers that micro-specialize, employing more than one supplier based on their back-office specialty. But in Garcia’s experience, when a buyer retains several outsourcers with differing specialties, communication can become a problem. Successful outsourcing, however, requires a lot of coordination. The idea of offering the universal back office having all consultants under the same roof just “presented itself to us. One problem we don’t have is not talking with each other,” explains Garcia.
Total Support also represents the new breed of BPO provider that not only specializes in a process but who also has become an IT expert. “We can develop Web sites, manage IT, take care of accounting and consult on other back-office operational issues,” says Garcia. He says companies who have no internal IT department or need someone to manage their back-office technology are “a good source of clients.”
BPO Now Encompasses IT
Currently, Total Support does a small amount of hardware outsourcing. “We are looking at entering that market more aggressively but are waiting until we’ve completed our research,” he says.
The company’s back-office specialties remain in the forefront. Its expertise ranges from simple bookkeeping to sophisticated services for chief financial officers.
According to Garcia, the supplier sells “60 percent” of its new services to current customers. “We initially focus on the process they need most,” says Garcia. “Then we let them get the idea we might be able to help in other ways. But most of the time they end up asking us first.”
Lessons from the Outsourcing Journal:
- When a job becomes too complicated and intricate for one department, it’s time to outsource it.
- Buyer and suppliers must work at developing their relationships. Buyers should treat the supplier’s team like their own employees.
- BPO suppliers with expertise with one process are now becoming proficient in the entire process, including the IT segment.
- Having all the components of the back-office under one supplier’s roof eliminates the problem of communicating between vendors.