Riordan Outsourcing Plan

Topics: Outsourcing, Offshoring, Offshoring Research Network Pages: 9 (2870 words) Published: February 23, 2013
Riordan manufacturing virtual organization is focused on achieving and maintaining financial and resource profitability to sustain growth. The company’s finance and accounting department needs to have a seamless compatibility among its three different sites to provide consistency in data and eliminate redundancy of records and process. Outsourcing has been identified as a method to deliver the solution. Research has been conducted by a team to identify the pros and cons associated with technology outsourcing projects. Scholarly peer reviewed articles are used for identifying the pros and cons. Non-peer reviewed articles will be considered if they are from reliable sources. Outsourcing software development enables Riordan Manufacturing to increase efficiency in satisfying customer needs, storing quality data, and achieving high profits. Risks are recognized to be challenging in system security, personnel satisfaction, and company litigations. More organizations realize the cost savings in offshore outsourcing. Outsourcing could result in potential cost savings, organization-wide consistent reporting, and increased focus on strategic activities. A substantial business transformation will be measured by efficient processes, increased productivity, and optimized strategy for an outsourcing venture. An organization with well managed outsourced functions can result in consistent full benefits of outsourcing.

Technology Offshore Outsource Plan
Riordan Manufacturing, Inc. (Riordan) recognizes room for improvement in its Finance and Accounting (F & A) department. Currently, Riordan has three operating entities in Georgia, Michigan, and California. These entities “each have their own Finance & Accounting Systems and they provide input that is consolidated at Corporate…San Jose” (University of Phoenix, 2013, Finance & Accounting Overview). Corporate receives data in multiple forms requiring file conversions, re-entry, and re-coding that is inefficient and wastes resources. Riordan evaluated the cost savings and effect on core functions to offshore outsource a business function. Riordan has considered the advantages and disadvantages of offshore outsourcing as well as those specific to outsourcing F & A functions and has developed a project plan with specific performance measures to evaluate the profitability of outsourcing its F & A department. Riordan Manufacturing Financial & Accounting System Issues Riordan Manufacturing is facing multiple challenges in its Finance and Accounting System. The systems are poorly implemented. There are different sources of data such as data files, hardcopy reports where some data needs to be re-entered. Some data needs to be reconverted and calculated to its proper account. The F & A systems output is time consuming and labor intensive in the process of internal and external audit. Income and Balance sheet is delayed by three weeks. It has a ripple effect in consolidating reports to be in compliance with new government requirement in a timely manner. When too many systems are used and each system is different, manual process needs to bridge the gaps to make the system work. This causes a large amount of work and possible errors. The process is not centralized and reports need more auditing. When Riordan acquired the operating entities in Michigan and Georgia, the matter of F & A system compatibility was not addressed (University of Phoenix, 2013, Finance & Accounting Overview). Not updating to meet changes in the organization added more complexity in making the compatibility of all systems seamless. Solutions

An infrastructure needs to be created and developed software that will address the needs of the F & A system and employees. When an integrated systems framework had been developed, fewer manual processes would be necessary. Framework should include data repository to address storage. A global ERP will be...
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