Abstract
This case concerns Microsoft's attempt to completely restructure its major global finance processes and operations through what the authors call a Vested Outsourcing agreement. In February 2007, Microsoft signed an outsourcing agreement with Accenture, with an original contract term of 7 years at a value of US$185 million. This was extended 2 years later, to 2018, with expanded scope, and a total contract value of $330 million. Called the OneFinance initiative, the effort outsourced nearly all back office finance transactions spread across 95 countries to service provider Accenture under a new kind of outsourcing model. Under the agreement the parties operate under incentives to improve performance and deliver increased value year-over-year, while sharing in the risks and rewards of doing so. The case focuses on the rationale for this distinctive approach to outsourcing and transformational change, and provides details of the definitions of work, measurements, pricing models and governance structures adopted. The fine-grained account of the OneFinance outsourcing arrangements provides an opportunity to identify the distinctive principles and practices adopted by the parties. Readers can compare and contrast the case with other outsourcing deals and assess the challenges in choosing the supplier and the approach. The case also invites an assessment of the risks being incurred, the inherent implementation and operational challenges and how they might be met. The case also raises questions about what levels of success might be achieved, and what conditions would need to be present for success. Finally, the case raises the issue of whether, and if so how, this distinctive ‘vested’ approach could be adopted elsewhere.
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Acknowledgements
The authors would like to formally thank the following leadership within Microsoft and Accenture: Tim McBride – Microsoft's General Manager Finance Operations; HenricHäggquist – Sr. Director, OneFinance; Andrew Cheung – Partner responsible for delivery of OneFinance from Accenture.
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Vitasek, K., Manrodt, K. & Krishna, S. Changing the game of outsourcing – the Microsoft OneFinance case. J Info Technol Teach Cases 2, 46–56 (2012). https://doi.org/10.1057/jittc.2012.2
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DOI: https://doi.org/10.1057/jittc.2012.2