Introduction

The global multi-process FAO market bounced back with a strong 2010. As the global economy revived, the FAO market experienced 15% ACV growth in 2010 compared to 10% growth rate witnessed in 2008-2009. However, 2011 promises to witness a strong activity – most service providers are reporting a robust pipeline. Everest estimates that the FAO market will see a healthy Y-o-Y growth of 15-20% in terms of market ACV (as seen in pre-recessionary years). The ACV will reach in excess of US$4 billion in 2011

In this research study, we analyze the global multi process FAO market in 2010. We focus on:

• Market size and buyer adoption trends
• FAO value proposition
• Contract characteristics across process scope, technology, global sourcing, and pricing structures
• Service provider evaluation and relative position on the Everest PEAK Matrix
• 2010 FAO Market Star Performers based on performance and capability building in 2010

Scope of analysis

• Third-party FAO deals; it does not include shared services or captives
• 580+ multi-process FAO deals signed as of 2010 with a minimum of two F&A processes, over US$1 million in ACV, and a minimum contract term of three years
• Coverage across 25+ FAO service providers with multi-process capability including Aditya Birla Minacs, Accenture, Capgemini, Cognizant, EXL Services, Genpact, HCL, HP, IBM, iGate-Patni, Infosys BPO, Intelenet, KPIT Cummins, OPI, Steria, Sutherland Global Services, TCS, VWA, Wipro, WNS, and Xerox-ACS

Content

This report will assist key stakeholders (buyers, service providers, technology providers) understand the changing dynamics of the FAO market and help them identify the trends and outlook for 2011. 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 service provider landscape. Some of the findings in this report, among others, are:

• Nearly 15% growth in active ACV was witnessed in 2010 compared to ~10% growth in 2009. The current FAO market size is US$3.6 billion
• The growth in 2010 was not purely a function of new contracts. Nearly 55% of the ACV growth in 2010 was contributed by contract renewals and expansion
• Buyers continue to be cautious. The big-bang approach has given way to a phased approach
• The trend towards end-to-end solutions (P2P, O2C, R2R) continued to gain momentum as opposed to a traditional piecemeal solution
• In 2010, technology augmentation approach emerged as the new “normal”
• The incidence of hybrid pricing models (FTE-based pricing in combination with either transaction-based or performance-based/gain-sharing models) is increasing
• Everest updated its classification of 20+ FAO service providers on the Everest Performance| Experience| Ability| Knowledge (PEAK) Matrix for FAO into Leaders, Major Contenders, and Emerging Players
• There are now six service providers in the Leaders category. Along with the established FAO leaders (namely Accenture, IBM, and Genpact), Capgemini, Infosys BPO, and HP make up the Leaders quadrant on the Everest PEAK Matrix for FAO
• Everest identified five service providers as the “2010 FAO Market Star Performers” based on their relative movement on PEAK – Accenture, IBM, Genpact, TCS, and WNS