More Related Content Similar to Hfsblueprintreport financeaccounting march2013 Similar to Hfsblueprintreport financeaccounting march2013 (20) Hfsblueprintreport financeaccounting march20131. The Knowledge Community for Global Business & IT Services
HfS Blueprint Report
Finance & Accounting BPO
Excerpt for Genpact
March 2013
Phil Fersht
Founder & CEO
phil.fersht@hfsresearch.com
Brian Dubiel
Principal Analyst
brian.dubiel@hfsresearch.com
2. © 2013 HfS Research Ltd. Proprietary │Page 2
Table of Contents
Topic Page
Executive Summary 3
Research Methodology 6
Service Provider Capabilities 13
Service Provider Profile 16
About the Authors 18
4. © 2013 HfS Research Ltd. Proprietary │Page 4
Introduction to the HfS Blueprint Report:
The F&A BPO HfS Blueprint Report is the first of its kind in the global services industry.
Unlike other quadrants and matrices, the HfS Blueprint identifies relevant differentials
between service providers across a number of facets under two main categories:
innovation and execution.
HfS Blueprint Report ratings are dependent on a broad range of stakeholders with specific
weightings based on 1,355 crowdsourced responses. Stakeholders include:
F&A BPO Enterprise Buyers
F&A BPO Service Providers
F&A BPO Industry Influencers (sourcing advisors)
HfS Analysts
Finance and Accounting BPO Services
5. © 2013 HfS Research Ltd. Proprietary │Page 5
Key Highlights: Finance & Accounting BPO in 2013
Deal activity rebounds. F&A BPO market has shown growth of 13% increase in deals 2012 after several
years of downturn. Contract size for multi-scope engagements has stabilized at $25M (ACV).
The “F&A Big Four” dominate the Winners Circle. Accenture consolidates its command of market share.
IBM, Genpact, and Capgemini round out the “Winner’s Circle” members.
Intense competition among the High Performers. Wipro, WNS, EXL, Xerox and Infosys pushing aggressively
for their share of new deals.
Execution trumps Innovation. The service providers are attempting to become more innovative in the F&A
BPO space, but the market still remains more focused on execution and delivery, assigning 70% of the
importance weighting to execution, 30% to innovation.
Market size grows. Total F&A BPO is expected to surpass $25B in 2013, at a growth rate of 8%, with multi-
process F&A BPO expected to reach $5B. 4 out of 10 enterprises ($5B+) intend to expand their F&A BPO
operations this year.
Industries experiencing secular shifts show highest growth. These include Telecom, Software/High Tech,
Media/Publishing and Retail/Hospitality.
“Early adopter” industries show slowed growth. Banking, Financial Services and Insurance and
Manufacturing still dominate a third of the market, but growth has slowed.
Market still nascent. All F&A functions are still predominately managed in-house by enterprises.
7. © 2013 HfS Research Ltd. Proprietary │Page 7
Data Summary
58 data points were collected from 745 live multi-
process F&A Business BPO engagements. Each
contract had a minimum of two core F&A processes
bundled and a minimum on $1M in TCV.
Data was collected in Q4 of 2012, covering 1355
buyers, providers and advisors/influencers of
outsourcing services. Included in this sample were
127 buyers of F&A BPO services.
This Report is Based On:
Tales from the Trenches: Interviews with F&A BPO
buyers who have evaluated service providers and
experienced their services. Some references are
supplied by service providers, but many are
interviewed in meetings conducted with HfS Sourcing
Executive Council members and participants in our
extensive qualitative researching process.
Sell-side Executive Briefings: Structured discussions
with service providers based on collected data
necessary to evaluate their innovation and execution
capabilities, market share and deal counts.
HfS “State of Outsourcing” Survey: The industry’s
largest quantitative survey on outsourcing, conducted
with the support of KPMG, covering the views,
intentions and dynamics of 1355 buyers, providers
and influencers of F&A and business services.
Publically-available information: Financial data,
website information and presentations given by
senior executives, and other marketing materials.
Participating Service Providers
Research Methodology
8. © 2013 HfS Research Ltd. Proprietary │Page 8
Evaluation Criteria
Two major factors that impact service delivery:
• Execution represents service providers’
ability to deliver services. It includes:
– Real world delivery of solutions
– Quality of Customer Relationships
– Market Share
• Innovation represents service providers’
ability to improve services. It includes:
– Vision for End-to-End Process
Lifecycle
– Integration of BPO and IT
– Vision, Plans and Investments to Tailor
Solutions for Specific Industries
– Leveraging External Drivers
Criteria Weighting
Criteria are weighed by crowdsourcing
weightings from the four groups that matter
most:
• Enterprise Buyers (40%)
• Service Providers (30%)
• HfS Research Analysts Team (20%)
• Advisors, Consultants, and Industry
Stakeholders (10%)
Weightings from this report come from HfS’
2013 “State of Outsourcing Study”, conducted
with the support of KPMG.
Key Factors Driving the HfS Blueprint
9. © 2013 HfS Research Ltd. Proprietary │Page 9
Provider G Provider J
Provider B Provider G
Provider A Provider B
vs.
vs.
vs.
…
After providers respond to HfS’ Blueprint RFI, and upon
completion of client references and fact-checking, HfS
analysts conduct a paired-comparisons survey of service
providers in each category of evaluation. This involved
more than 700 unique provider comparisons.
Using ExpertChoice, an advanced statistical analytics
package, the data/rankings are compiled and compared
across all provider comparisons to identify
inconsistencies within the scores.
After a further data-refinement, the criteria weightings
are used to give each service providers a score in each of
the evaluation criteria components.
Once aggregation and scoring is complete, the service
providers’ scores are plotted, producing the HfS Blueprint.
How the HfS Blueprint Scores are Compiled
10. © 2013 HfS Research Ltd. Proprietary │Page 10
EXECUTION 71.77%
Quality of Customer Relationships 23.74%
Quality of Account Management Team 10.49%
How Service Providers Engage Customers and Develop Communities 5.62%
How Service Providers Incorporate Customer Feedback 7.63%
Real World Delivery Solutions 20.94%
Actual Delivery of Services for Each Sub-process 9.63%
O2C 4.23%
R2R 1.71%
P2P 2.83%
Other 0.85%
Geographic Footprint and Scale 3.60%
Usefulness of Services to Specific Client Needs of All Sizes 7.71%
Flexibility to Delivery Both End-to-End Solutions and Point Solutions 3.48%
Experience Delivering Industry-Specific Solutions 4.23%
Market Share 10.80%
Flexible Pricing Models to Meet Customer Needs 16.28%
INNOVATION 28.23%
Vision for End-to-End Process Lifecycle 11.41%
Concrete Plans to Deliver Value Beyond Cost and Investment Into Future Capabilities 4.63%
Integration of Technology Into Business Process 3.31%
Continuous Improvement Methodology and Capability 3.47%
Vision for Industry-Specific Solutions 9.46%
Ability to Leverage External Value Drivers 7.35%
Leverage New Technology, Security, Social Media, Mobility and Cloud Capabilities 3.55%
Incorporate Regulatory Requirements Quickly and Proactively 3.80%
TOTAL 100.00%
HfS Blueprint Scoring: Percentage Breakdown of Importance
Weightings
11. © 2013 HfS Research Ltd. Proprietary │Page 11
StrategicImportance
• Accounts Payable
• Travel and Expense
• Billing/Invoicing
• Cash and Accounts Receivable
• Credit
• Collections
• Revenue Accounting
• Fixed Asset Accounting
• Tax Filing
• Payroll
• Inter Company Accounting
• Regulatory/Statutory
Reporting
• Management Reporting
• Risk Management/Treasury
• Internal Auditing
• Financial Planning and
Analysis
• Business Intelligence
• Other
• Financial Process Consulting
• Change Management and Communications Support
• Supporting Innovation Roadmap
Transactional
Accounts
Controllership
Activities
Transformational
Responsibility
Low level and
process based
activities in the
F&A sphere.
Higher level and
more analytical
focused F&A
activities and
process.
Consultancy like
products and
services. Identifying
the long term
strategy of F&A.
Activities include and/or not limited to:
HfS Bases its Research on an Assessment Framework of
Services that F&A BPO Service Providers Offer the Market
12. © 2013 HfS Research Ltd. Proprietary │Page 12
Procure to Pay
• Accounts Payable
• Travel & Expense
• Credit
Order to Cash
• Cash App/Accounts
Receivable
• Billing/Invoicing
• Collections
• Revenue Reporting
Record to Report
• Fixed Asset
Accounting
• Tax Filing
• Payroll
Controllership
Activities
• Inter-Company
Accounting
• Regulatory/Statutory
Reporting
• Management
Reporting
• Risk Management/
Treasury
• Internal Auditing
• Business Intelligence
• Financial Planning &
Analysis
Transformational
• Financial Process
Consulting
• Supporting
Innovation Roadmap
• Change Management
& Communications
Support
HfS Value Chain Definition:
Value chain refers to the series of departments which carry out value-creating activities to
design, produce, market, deliver, and support a company’s product or service. In this usage, we
refer to the range of primary processes and support services that providers offer to their clients.
In the case of the F&A BPO Services assessed in this Blueprint, only those engagements which
involve a minimum of two of these core F&A process bundled and a TCV more than $1M.
Definition of Finance and Accounting Business Process
Outsourcing Services
Finance and Accounting Value Chain
14. © 2013 HfS Research Ltd. Proprietary │Page 14
INNOVATION
EXECUTION
High Performers
Winner’s Circle
Accenture
IBM
Genpact
Capgemini
EXL
Wipro
WNSInfosys
Xerox
HP
TCS
Serco
Sutherland
Cognizant
Steria
15. © 2013 HfS Research Ltd. Proprietary │Page 15
Vertical Focus driving F&A value. Clients have repeatedly referenced the industry-focused vertical
scope of F&A services as being of prime importance. HfS expects this trend to accelerate in the
future, where service providers will become F&A experts within given industries, with the capability
to offer insights and analytics. Notable industries where clients prefer providers with specific
vertical capability include Pharma, CPG, Retail and Insurance.
Blur between Procurement and F&A. The line between procurement and the finance back office is
starting to blur as companies look to reduce overhead and find synergies between the lines of
corporate groups. It will be imperative for service providers to keep abreast of the changing
landscape and address Finance and Procurement needs together.
Creating Relationships that Foster Innovation. As it gets harder to differentiate between the main
body providers in “table stakes” areas of price flexibility and global operational delivery, those
providers that are able to provide clear and measurable innovative improvements for clients will
dominate market share. The key is providers being able to demonstrate how they created
environments with their clients to work together to define business goals and outcomes. It’s not
going to be about “selling innovation”, but more about creating environments to foster innovations.
Development of Client Communities. The need for more interaction between a provider’s client
base is abundantly clear. Clients have called for more cross collaboration, to gain a better
understanding of how other companies are leveraging their F&A BPO, and where best practices can
be identified. HfS anticipates smart providers to increase their involvement of driving more focus
groups within their F&A BPO client portfolios.
Future of the Finance and Accounting Outsourcing Market
17. © 2013 HfS Research Ltd. Proprietary │Page 17
Genpact
Client Industry Verticals Key Clients Global Operations Centers Business Platforms Offered
• Financial Services
• Insurance,
• Retail and CPG
• Pharma
• Manufacturing
• Services Industry
• Travel
• GE
• Kimberly-Clark
• Walgreens
• AstraZeneca
• UCB
• Hyatt
• GlaxoSmithKline
• United Biscuits
• Telefonica O2
• Cigna
• Penske
• Ashland
• Headcount: 16,000+ FTEs
• India: (12,300+)
• China (600+)
• Philippines
• Brazil, Columbia, Mexico, Guatemala
• Czech Republic, Hungary, Poland, Romania
• Kenya, South Africa, Morocco
• Netherlands
• U.S.
• Akritiv
• E-Invoicing
• ProFlow
• NICE
• CMS
• Duplicate Payment Audit Tool
• E-Billing platform
• Callisto
• Manual Journal Entry
• Close Tracker
• Questor
• Smartstream
• SmartView
Strengths Challenges
• Distinctive client culture. Genpact’s clients talk more fondly about their
provider than many of its competitors. This is due to the notable humility of
Genpact’s delivery staff and a bloody-minded determination to succeed.
Genpact has worked hard to get its clients on the right track and enjoys
many long-term established relationships as a result..
• Ability to be flexible in offering services to customers in a customized,
tailor-made approach or providing the best-fit solution. Genpact offers
both a plug and play solution as part of service offerings and an end-to-end
solution for a multitude of services.
• Proven performer in both the high-‐end and mid-‐market client base.
Genpact has does an excellent job in servicing a wide range of clientele.
Account management teams have generally risen above most other
competitors in terms of quality.
• The Smart Enterprise Processes (SEPSM) methodology is a game-changer in
the BPO market; a scientific methodology enabling a comprehensive
analysis of business activity across the entire enterprise.
• Ability and openness to support both existing customer based technology
solutions or propose own business tools in order to address the unmet
functionalities of the systems and processes.
• IT development and IT innovation remains a weak focal point. IT business
still remains quite small in comparison to other service providers in the
market. As customers look towards all inclusive deals and solutions, this
could ultimately hinder its ability to attract new deals. Clients have cited
the lack of new applications developed to boost innovation, however,
recent acquisitions of Headstrong and JAWOOD have significantly enhanced
Genpact’s capabilities in capital markets and healthcare insurance, which
should improve F&A capabilities in these industries.
• Over-reliance of F&A headcount in India. A more globally-diversified staff
spread would be more attractive for more regional buyers looking for a
greater degree of local support and business continuity planning in the F&A
space.
• Apparent lack of depth and vision in some industry verticals. Although
strong in pharma and CPG, and showing potential with recent acquisitions
in others, the lack of a top tier IT business that could lead to new industry
focused relationships could hold the firm back.
Industry Leading: Innovation
• Vision for End-to-End Process
• Continuous Improvement
Methodology and Capability
Industry Leading: Execution
• Developing Customer
Communities
• Flexibility to Deliver End-to-End
and Point Solutions
Market Share:
10.2%
“Winner’s Circle”
19. © 2013 HfS Research Ltd. Proprietary │Page 19
Founder and CEO, HfS Research
phil.fersht@hfsresearch.com
Overview
• Over 17 years’ business experience in the global outsourcing and shared
services industry across US, Europe and Asia
• An acknowledged industry advisor, strategist, author, speaker, practitioner
and blogger
• Advised on 100s of global IT & BPO engagements
Previous Experience
• Practice Head for IT Services & BPO Practice, AMR Research (Gartner Inc.)
• BPO Marketplace Leader at Deloitte Consulting
• Vice President for Everest Group, leading research and consulting teams
based in the US and India.
Prior Career
• Regional Director, IDC Asia/Pacific
• Program Manager, European IT Markets Services, IDC Europe
Education
• BS with Honors in European Business & Technology from Coventry
University, United Kingdom
• Diplôme Universitaire de Technologie in Business & Technology from the
University of Grenoble, France
Phil Fersht
20. © 2013 HfS Research Ltd. Proprietary │Page 20
Principal Analyst, HfS Research
brian.dubiel@hfsresearch.com
Overview
• Covers the Finance and Accounting and Procurement Outsourcing
industries for HfS Research
• An acknowledged industry expert in BPO operations, having worked on
multiple sourcing engagements including in areas such as KPO, FAO, PO
and LPO domains
Previous Experience
• Served as the outsourcing category manager for State Street Corporation,
acting as an internal advisor for both procurement operations and
corporate outsourcing projects
• Initiated and developed State Street’s Outsourcing Center of Excellence,
creating corporate outsourcing tools and methodology, and standardizing
knowledge for internal business lines to better govern their outsourcing
providers and sourcing events
Education
• Dual BA in Economics and Philosophy from Trinity College
• MBA with an Operations and Supply Chain concentration from
Northeastern University
Brian Dubiel
21. © 2013 HfS Research Ltd. Proprietary │Page 21
HfS Research (www.HfSResearch.com) is a leading independent global analyst authority and knowledge community for
the business and IT services industry.
HfS is unique in the fact that it serves the research and strategy needs of business operations leaders across finance,
supply chain, human resources, marketing, customer management, IT and core industry functions. In addition to
researching business operations strategies, HfS educates and facilitates discussion among the world's largest knowledge
community of enterprise services professionals, currently comprising 120,000 subscribers. HfS Research also facilitates
the HfS Sourcing Executive Council, the acclaimed elite group of sourcing practitioners from leading organizations, which
meets on a bi-annual basis to share the future direction of the global services industry and discuss the future enterprise
operations framework.
Led by recognized industry expert Phil Fersht, HfS Research differentiates itself with its global team of expert services
analysts with real industry experience, provocative and opinionated research, unrivalled market analytics, and a view of
technology as an enabler for business process improvement. Its on-demand expertise relationship model helps clients
leverage HfS knowledge and strategic insight in a rapid, responsive and engaging manner.
In 2010 & 2011, HfS was awarded Analyst of the Year by the International Institute of Analyst Relations (IIAR), the premier
body of analyst-facing professionals, and achieved the distinctive award of being voted the research analyst industry's
most Innovative Analyst Firm in 2012.
Now in its sixth year of publication, HfS Research's acclaimed blog “Horses for Sources” is widely recognized as the
leading destination for unfettered collective insight, research and open debate of sourcing industry issues and
developments.
To learn more about HfS Research, please email research@HfSResearch.com.
About HfS Research