Executive Summary

During the past two years, the Finance and Accounting Outsourcing (FAO) industry changed beyond recognition. The number of contracts more than doubled, the entire value proposition was transformed, and the service provider landscape opened up beyond the traditional "Western" brands.

The change in provider landscape was the major game-changer. The industry saw the aggressive insertion of the Indian Finance and Accounting (F&A) service providers even while the Tier-One outsourcing giants continued their rapid expansion within the Indian subcontinent. Moreover, the Indian service providers’ increasing depth of business understanding puts pressure on the traditional providers, thus changing the game. The days when Indian providers played a minor supporting role in supporting the operations of the Western Tier-One providers are long gone. The traditional "Big Four"– namely IBM, Accenture, ACS and Cap Gemini—are more nervous about tackling aggressive Indian providers such as Genpact, Infosys (Progeon), and WNS than competing against each other. The Indian providers’ deep operational culture, passion for process rigor, Six Sigma and aggressive pricing structures are proving formidable on several fronts.

In addition, the IT design and support expertise within India enables buyers to transition quickly towards an outsourced environment and technology transformation plays an increasingly important role in sourcing.

The Indian FAO providers now account for nearly 30% of all FAO contracts signed to date, with several successfully competing against the global outsourcing giants. For several years, India has been firmly established as the prime offshore location for FAO work. Now the Indian providers are moving beyond roles of supporting non-Indian providers and, instead, making a concerted mark and commanding a significantly increasing share of the global FAO industry. Increasingly, leading Indian providers are bolstering their sales presence and establishing operations in North America and Europe in order to support global engagements.