FAO Research, Finance, Outsourcing, Growth

Research predicts explosive growth in the outsourcing of finance departments

07 Feb 2006 | (News)

FAO Research, Inc., the only research firm focused exclusively on the Finance & Accounting Outsourcing (FAO) market, announced the availability of a comprehensive research report that predicts dramatic increases in demand from many companies for outsourcing their routine accounting functions to external service providers, triggering big business for major suppliers, like IBM, Accenture and others.

"The demand for Finance & Accounting (F&A) outsourcing is tremendous," said Lisa M. Ross, CEO and founder of FAO Research, Inc. "To meet growing buyer interest worldwide, service providers from the United States, Europe and India are beefing up their portfolios to serve the industry- and process-specific needs of corporations, governments and other entities. We are witnessing a growing supply-side market in which service providers are moving up the value chain with the goal of providing more strategic, complex and comprehensive FAO services on a global basis."

According to FAO Research, a multitude of well-known companies, like General Motors (GM), General Electric (GE), BP and Procter & Gamble already have hired outsourcing service providers to manage all or large pieces of their F&A business processes, whether part of an existing shared services center or disparate operations. FAO provides financial services to enterprises wishing to contractually offload their internal F&A functions to an external service provider for a fixed fee over a long period of time (3+ years). Drivers for FAO include: expense reduction (including headcount); better process quality and efficiency; improved reporting uniformity and regulatory compliance; greater technological prowess; expanded global capabilities; and more effective business process management, among others.

Some key findings include:

-- F&A outsourcing is more than just a cost play. Enterprises are reassessing the entire F&A business process and what it means to them to determine if they should consider transformation or reengineering initiatives, either solo or with the help of an outsourcer.

-- The provision of F&A outsourcing services is the most rapid growth area -- from a revenue standpoint -- for many service providers worldwide.

-- Offshore service provision is critical to the success of FAO service providers. Nearly all buyers of FAO services explore the offshore option.

The SBPOA contributed market commentary to FAO Research's new report, "Finance & Accounting Outsourcing Market Overview and Analysis of 14 Leading Service Providers, 2006." The report, published on January 31, 2006, is available for purchase at: www.faoresearch.com.

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