Reinforcing the "I" in FEI.

Back in 2000, Financial Executives Institute (FEI) changed its name to Financial Executives International--in essence, making the "I" mean "international"--to reflect the global nature of members' businesses and how they were evolving. Now, in 2007, FEI leadership continues to seek opportunities to bring members' attention to international practices, as well as issues and events that we believe will be valuable as you chart your course to growth and sustainability. One such practice that a great many global companies are taking advantage of is business process outsourcing, known by the acronym "BPO."

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BPO is a dramatic global trend that is transforming financial departments with excellent ROI and improved turnaround times. It involves outsourcing or offshoring routine processes like accounts payable (AP) and travel and entertainment (T & E) to organizations that specialize in the function.

Recently, I had the opportunity to accompany FEI's Committee on Finance and Information Technology (CFIT) to personally see how BPO is transforming the way business is done for global giants such as Procter & Gamble and Unilever. We visited the headquarters of Hewlett-Packard Co.'s BPO operations in Costa Rica, the Central American isthmus nation. As one who has found I have always learned best when I can "see and touch" something, the trip has proven to be an eye-opener.

While not a new practice, BPO has been developed to an amazing level, and one that I had not previously looked at. BPO allows companies to get business processes done more efficiently, particularly in terms of lowering labor costs. However, if you stop at only lowering labor costs, you would be missing the other benefits. There are several large players in Costa Rica, including H-P and IBM. While in Costa Rica, I had the opportunity to tour the operations of H-P, which graciously arranged meetings and tours for members of CFIT. In fact, in a surprise invitation, we got to meet and dine with Costa Rica's President, Oscar Arias.

One thing that intrigued me about the operation was the efficiency of the work. For example, at 4 pm, a bus arrived and took a number of the employees home. When asked about the work schedule, I was told, "The hours are whatever they need to be." They simply don't work a set 9-to-5 schedule, but rather, they work as needed, kind of a "what does it take to improve the processing of the work" attitude. And, naturally, technology drives it all. Certain projects are done in Costa Rica, and when that shift goes home, the work is continued in India--thus, the work is going on 24/7. Indeed, time/motion studies designed by engineers are ongoing to continually improve the work processes and reduce labor costs. It is truly a case of "working smarter."

Now, while many have the opinion that countries south of North America have little to offer, I'd suggest it may be time to take a look at Costa Rica. The thriving country has been growing by leaps and bounds. Run by President Arias--a Harvard-educated, Nobel Peace Prize winner--it offers a stable, democratic, capitalistic government and a highly educated workforce (literacy rate of about 96 percent). English is the country's second language and is taught to all schoolchildren.

That translates to an intelligent workforce that is upwardly mobile and residing in approximately the same time zones as the U.S.--a more similar background than, say, an outsourcer in India or China (which have other potential political and/or other risks). I view this as an international competitiveness issue that can ultimately strengthen not only U.S. business, but businesses in the North Americas, which bodes well for us all.

I did some research on Costa Rica. Consider: it's the longest-running democracy in Central America and the third strongest economy, aiming to be the number one economy by 2010. There is a good system of property rights, also a plus to businesses that may want to set up operations there. One negative is the infrastructure--such as roads and ports--which is somewhat weak.

Our hosts at H-P also arranged for FEI's representatives to meet with and receive a briefing from Trade Minister Marco Vinicio Ruiz, who studied at New York University. He is very focused on his goal of bringing new business to the nation. Of the BPO operations located there, he noted they are doing jobs Americans don't necessarily want to do. There are call centers, data entry, data processing, accounting, bookkeeping and other what he characterized as "lower-level" jobs.

FEI is always looking for opportunities to expand internationally, and I'd say FEI made a good impression meeting with both the president and trade minister, discussing with them the breadth and quality of member companies. You can count on FEI to continue to keep you apprised of key issues. Returning from this visit, I felt pride that we were truly FEI (with emphasis on the "I" for international).