How Microsoft and Accenture Transformed Global Finance Operations

In 2006, Microsoft embarked on a complete reengineering of its major global finance processes and operations. Called the OneFinance initiative, the effort outsourced back-office finance transactions spread across 95 countries to Accenture under a new kind of outsourcing agreement known as Vested Outsourcing. Under the agreement, both parties are incented to improve performance and deliver increased value year-over-year and share in the risks and rewards of doing so. This innovative...
More Description

In 2006, Microsoft embarked on a complete reengineering of its major global finance processes and operations. Called the OneFinance initiative, the effort outsourced back-office finance transactions spread across 95 countries to Accenture under a new kind of outsourcing agreement known as Vested Outsourcing. Under the agreement, both parties are incented to improve performance and deliver increased value year-over-year and share in the risks and rewards of doing so. This innovative outsourcing relationship symbiotically vests Microsoft and Accenture in each other's success. They are most successful when they are both successful. In February 2007, Microsoft signed an outsourcing agreement with Accenture, with an original contract term of seven years at a value of $185 million. The contract spanned their entire back-office finance processes spanning three major areas: - AP - Expense reports & invoices - Requisition to Purchase Order process - General accounting Twenty-eight months later, based on a proven platform of success, they extended the agreement to 2018, at a total contract value of $278 million. In the summer of 2009, the scope of the contract was expanded to include Accounts Payable and Buy Center processes for the United States, increasing the contract value to $330 million. Also, Accenture can work on transformational projects with Microsoft, thereby adding value for both parties. In 2008, the Outsourcing Center, Everest Consulting's research center, awarded the OneFinance contract the Most Strategic Outsourcing Contract for 2007 (http://www.outsourcingjournal.com/aug2008-moststrategic.html). In March 2010, the Shared Services Outsourcing Network awarded the Microsoft-Accenture outsourcing relationship as the Best Mature Outsourced Service Delivery Operation. This case study shares Microsoft's journey and how they are achieving transformational changes through Vested Outsourcing principles. The case study was written to be a teaching aid to help outsourcing and procurement professionals understand how the Microsoft OneFinance team challenged conventional approaches to outsourcing and established an outsourcing agreement designed to drive innovation and transformation, creating a contract and relationship where Microsoft and Accenture are vested in each other's success.