F&A Outsourcing Market - An Impressive 15-20% growth expected in 2011

The Finance and Accounting Outsourcing Annual Report 2011, published by the Everest Group, offers valuable insights into the ever evolving organizational needs and how companies tend to outsource their F&A requirements.

In the year 2010, the Global Outsourcing market was valued at USD 40 billion. The global outsourcing market has sustained a steady growth in 2010 with an annualized growth rate of 6 percent.

In 2010, the outsourcing market saw Business Process Outsourcing (BPO) transactions grow by an impressive 12 percent. This healthy recovery trend was led by traditional industry verticals, such as BFSI (banking, financial services and insurance), and traditional geo-specific markets, such as North America.

Asia continued to lead offshore activity, offshore adoption also spread to other locations. Last year saw 39 new delivery centers in India followed by 32 in Eastern Europe, 27 in Latin America, 25 in the Philippines, 16 in China and six in Africa.

The Reports highlights the fact that the Finance and Accounting Outsourcing market is expected to grow 15-20 percent and top $4B in annual contract value in 2011.

Their analysis includes comprehensive coverage of 580 multi-process FAO contracts with a minimum of two F&A processes, over $1M in annualized contract value (ACV), and a minimum contract term of 3 years.

FAO market growth continues to see strong adoption across most industries with manufacturing, financial services, retail, travel and logistics, and energy and utilities accounting for 70-75 percent of total FAO spending in 2010.

Second tier vendors are aggressively contesting to gain market share and are creating differentiated offerings to distinguish themselves in the crowded FAO market.

Today, we are also witnessing strategic alliances between pure-play FAO service providers and technology providers to offer platform/SaaS-based offerings.

Outsourcing of accounts payable, accounts receivable and general ledger continue to be the most outsourced processes whereas outsourcing of financial planning and analysis is an emerging trend. ( Everest report)

In addition to an increase in new FAO contracts last year over 2009, the market also reached an all-time high in contract extensions that along with contract expansions represented nearly 55 percent of ACV growth in 2010. The study predicts organic growth to continue as contracts valued $6.2B or more are up for extension within the next three years.

An end-to-end process-driven approach to FAO is also emerging as opposed to a traditional functional and piecemeal approach. More than 50 percent of the new contracts in 2010 had end-to-end scope (Procure-to-Pay, Order-to-Cash, Record-to-Report).( Everest report).

For more information about our services please contact:

Hanno de Vriend
BPO Director
H.deVriend@amicorp.com

Fernando Cancino
BPO Sales Executive
F.Cancino@amicorp.com