Executive Summary

After more than a decade in incubation, the Finance and Accounting Outsourcing (FAO) industry is recently experiencing unprecedented growth, doubling in size in the last two years and forecasted to continue at a 30% growth rate for the near-term.

Key factors driving CFOs toward FAO transformation are the intense pressure to reduce transactional costs from within their own departments and reap the benefits of low-cost global talent, dovetailed with visibility into the plethora of profitable and operationally successful FAO engagements by peers and competitors.

With today’s FAO suppliers all demonstrating proven capability to deliver cost savings, the onus is quickly moving toward the innovation and process excellence buyers can achieve when evolving into an outsourced F&A environment. Technology is recognized as a lever to deliver continuous innovation and improvement in FAO. These technology requirements become significantly more complex as companies add higher business-impact F&A functions to the outsourcing mix.

In Q3 and Q4 2006, the Everest Research Institute conducted a major study that investigated the impact technology innovation can and will play in driving incremental value from FAO. The study was based on the Institute’s unrivalled database of all FAO contract data, detailed profiles of the key FAO suppliers, and a selection of intimate FAO buyer interviews that comprise the basis of the recommendations at the end of this whitepaper.