Introduction

The twilight zone of 2009 seems to be lifting as market signals indicate 2010 is poised for a return to FAO growth. The multi-process FAO market slowed down from the 20%+ growth levels experienced in 2006-08 to 11% ACV growth in 2009, a fairly respectable rate despite the slowdown. However, 2010 promises be a stronger year for FAO than 2009. As the global economy revives, most suppliers are reporting stronger sales pipelines. Everest expects growth in excess of 20% for 2010 and expects the multi-process FAO market to reach nearly US$3.7 billion in ACV.

In this research study, we analyze the global multi process FAO market in 2009. We focus on:

• Market size and buyer adoption trends
• FAO value proposition
• Contract characteristics across process scope, technology, global sourcing and pricing structures
• Supplier evaluation and relative position on the Everest PEAK matrix
• 2009 FAO Market Star Performers based on performance and capability building in 2009

The scope of analysis includes 

• Third-party FAO deals; it does not include shared services or captives
• 470+ multi-process FAO deals signed as of November 2009 with a minimum of two F&A processes, over US$1 million in ACV, and a minimum contract term of three years
• Coverage across 20+ FAO suppliers with multi-process capability including Accenture, ACS, Capgemini, Cognizant, Compass BPO, EXL services, Genpact, HCL, HP, IBM, iGate, Infosys BPO, Intelenet, KPIT Cummins, OPI, Patni, Steria, TCS, VWA, Wipro and WNS

Content

This report will assist key stakeholders (buyers, suppliers, technology providers) understand the changing dynamics of the FAO market and help them identify the trends and outlook for 2010. In this backdrop, this report provides comprehensive coverage of the global FAO market including detailed analysis on market size and growth, buyer adoption trends, FAO value proposition, contract characteristics and supplier landscape. Some of the findings in this report, among others, are:

• The FAO market reached US$3.1 billion in ACV, representing roughly US$24 billion in booked FAO business globally
• The prevailing uncertain economic conditions had an adverse impact on FAO market as the annual ACV growth in 2009 slowed to 11%
• Phased adoption of FAO scope has become the dominant model as clients balance near-term benefits realization with longer-term strategies
• Nearly 60% of the contracts signed in 2009 had a hybrid pricing structure. It is becoming increasingly important to build an incentive-structure targeting supplier interests
• Everest updated its classification of 20+ FAO suppliers on the Everest Performance| Experience| Ability| Knowledge (PEAK) Matrix for FAO into leaders, major contenders, and emerging players
• Everest identified five suppliers as the “2009 FAO Market Star Performers” based on their relative movement on PEAK – Genpact, IBM, Infosys, Wipro, and WNS