FAO, Research, Finance, Accounting, Outsourcing

Leading research firm predicts 60% growth in F&A outsourcing in 2006

30 Mar 2006 | (News)

FAO Research, Inc., the only research firm focused exclusively on the Finance & Accounting Outsourcing (FAO) market, announced that its latest research shows a 40 percent, one-year increase in FAO contract signings in 2005, with the lion’s share of business won by Accenture and Capgemini. Further, the firm predicts that by the end 2006, there will be an additional 60 percent growth in the number of FAO contracts closed than in 2005.

The report, “The World’s Biggest F&A Outsourcing Contracts, 2004-2005: An Overview and Global Market Analysis,” indicates that a total of 67 long-term, multi-process, often global FAO arrangements with companies spanning myriad industries were signed in the past two years – 39 in 2005, compared with 28 in 2004. Some of the most well known companies in the world are included in this listing, such as Dun & Bradstreet, General Electric (GE), Kodak, and The Proctor & Gamble Company.

There are 11 service providers that garnered the major contract wins. Accenture captured a 30 percent market share of the total number of contracts signed in year 2005 and 33 percent in 2004. Capgemini also won a large share of FAO contracts during this timeframe, garnering 14 percent market share in 2004 and 11 percent in 2005.

Nine other companies are also noted as the top winners in the 2004-2005 FAO contracts’ landscape, namely: WNS, IBM, Progeon/Infosys, ACS, Genpact, Xansa, EDS, ExlService and Hewlett-Packard. All of these FAO contracts were sole-sourced, and all ranged in scope from less than $50 million to $489 million with terms between three and 10 years.

“Growth in the FAO market is accelerating at an incredible pace that will continue through this calendar year,” said Lisa Ross, CEO of FAO Research, Inc. “Our analysis shows that achieving greater cost savings, accessing better technology to facilitate global expansion and gaining industry best practices are the key motivators of companies ranging from financial services, to chemical production, to government and manufacturing. We predict this market will grow another 60 percent in 2006.”

Additional information and the report’s Table of Contents are available at www.faoresearch.com.

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