Finance and Accounting Outsourcing Market is maturing and expected to continue stable growth.

1. Analysis & Outlook
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/
According to Everest Group, Financing and Accounting Outsourcing: Annual report 2013, the
global multi-process FAO market grew at the rate of 10% to reach ACV of US$4.3 billion which
highlights the fact the market is matured and stabilizing and is further substantiated by the fact
that over 65% of the ACV growth in 2012 was contributed by contract extensions/renewals. Cost
reduction and process improvement are the primary drivers for adoption but standardization,
scalability and flexibility drove FAO adoption further, emphasizing a cost+ value proposition
highlights the Everest Group report. As the traditional markets matured the vendors are forced to
move to under-penetrated markets but Europe led the market increased FAO adoption and mid-
market and small buyer segments also increased their adoptions significantly in 2012 led to
moderate growth in 2012.Competition in the FAO market is intensifying as the share of the top
three service providers declined from 68% in 2002 to ~50% in 2012. Some of the key players in
the FAO market are Accenture, Aditya Birla Minacs, Aegis, Capgemini, Cognizant, Datamatics,
EXL Services, Genpact, HCL, HP, IBM, iGATE, Infosys, IQ BackOffice, NCO, Quatrro, Serco,
Steria, Sutherland Global Services, TCS, Wipro, WNS, Xchanging, and Xerox.
One of the significant trends is the rise in Adoption of end-to-end process but buyers continue to
remain cautious and adopt a phased approach to F&A outsourcing. Some of the new focus areas
that are emerging are Analytics, risk
management & compliance and F&A
services are increasingly getting industry-
specific. The Everest report also highlights
buyers are increasingly adopting non-
advisor-led competitive bidding route for
sourcing F&A services. India continues to
be the predominant hub of offshore
delivery and most of the vendors both
global and Indian are striving to build a
balanced onshore-nearshore-offshore
model. Technology augmentation model is
becoming the predominant approach
where in the vendors are developing technology infrastructure and also adopting emerging
technologies like cloud computing, mobility, social media and big data analytics to offer
innovative service offerings to clients. Outcome based pricing model and platform-based
solutions are also gaining traction. Service provider performance is up-to-the-mark against the
metrics important to FAO buyers, resulting in high satisfaction levels. However, buyer
organizations have highlighted some areas of improvements for service providers to work upon.
Vendors are shifting their focus to building technologies and service offerings through adoption
of emerging technologies like cloud computing and offer cloud-enabled F&A technology that
can be delivered as a BPaaS solution.
Finance & Accounting Outsourcing market maturing &seeing stable growth in 2013