An Analysis On Service Outsourcing Decision Based On Incomplete Contract Theory

With the development of information technology, the business process outsourcingbecomes one of the hot spot of outsourcing service nowadays on basis of the IT outsourcingservice. In recent years, finance and accounting business outsourcing service has also beengetting recognition by more and more enterprises as a subclass of business processoutsourcing. With the rapid development of Internet technology, the appearance of theapplication service provider (ASP) accelerated the process of modern enterprise’ sinformationization. The realization of the enterprise finance and accounting businessprocess outsourcing provided by ASP network service the platform effectively solve thefund pressure problem for the enterprises to build and maintain dedicated platform, as wellas the inconvenience brought by regional separation of information transmission.On the basis of correct understanding of the related concept, this Article introduces thetheoretical basis of the study, the operation process of the finance and accounting businessoutsourcing, the advantages and risks of the finance and accounting outsourcing, thefeasibility analysis of the implementation of the finance and accounting outsourcing. In thesame time, this article elaborates upon the problem which should be paid attention to on theprocess of the implementation of the finance and accounting outsourcing, points outreasonable outsourcing decisions and plays a vital role in outsourcing success ofestablishing a good outsourcing relationship.Secondly, this paper puts forward the evaluation standards of the outsourcingdecision-making model under the incomplete contract theory frame. The basic assumptionsand uncertainties factors establish the analysis framework of the finance and accountingdecision-making model. Based on the GHM model, the finance and accountingdecision-making model is established. By analysis on eight kinds of decision analysis, eightmore meaningful conclusions are drawn.Finally, based on the practice of the FAO, four different levels of the finance andaccounting work, this paper analyzes the four levels of specific business and offer proposalsto decision-making practice.In other words,the operational trade processing business canbeen outsourced thoroughly and both sides can establish contractual outsourcingrelationship; Finance policy-making and management can outsource appropriately. Bothsides need to establish collaborative outsourcing relationship; Finance policy and financemanagement can be appropriately outsourcing and the business transformation outsourcingrelationship is to be established; The strategic decision is not suitable for outsourcing but forservice. This article will verify the model conclusion by actual case analysis.