Introduction

The Finance and Accounting Outsourcing (FAO) market emerged into the rapid growth phase in 2005 after witnessing early venture capitalist activity and a subsequent increasing maturity of suppliers. This report provides a comprehensive coverage of the 2005 FAO market including market size and trends, buyer adoption, transaction mechanics, and supplier capabilities and position. It also summarizes the key insights and implications for key stakeholders. This report will assist companies considering outsourcing F&A to a third-party or AO suppliers to understand in detail the evolving FAO value proposition. 

Scope

• Third-party FAO contracts and does not include shared services or captives
• Multi-process FAO contracts with a minimum of two F&A processes, over US$1 million in Annual Contract Value (ACV), and a minimum contract term of three years
• All multi-process FAO contracts across all geographies and industries signed as of April 2005
• Leading suppliers including Accenture, ACS, EDS, Genpact, IBM, etc. 
  

Contents

This report summarizes key market trends and insights to assist management in making more informed business decisions. Key market trends are divided into three sections: Market overview and trends; Buyers, selection criteria and experiences; and Suppliers, capabilities, and operating models. Each section contains 4-6 key trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. For example, Market overview and trends is sub-divided into the following:

• Overall size and growth: The FAO market has reached the äÂގԢÂގ֮emerging rapid growth phase. The number of new FAO contract signings increased dramatically in 2002 and has continued to grow rapidly, with 70% of contracts signed since 2002
• Contract characteristics: Accounts payable, general accounting, and accounts receivable appear in over 80% of contracts
• Offshore trends: Labor arbitrage is a valid and sustainable value proposition well supported by many regions of the world
• Technology trends: Buyers are not leveraging outsourcing to drive their systems transformation
• Transparency and compliance: Compliance has become a senior management concern; visibility is being pushed to the highest levels for decisions which affect financial processes