by: Sarah Joson
Wednesday, May 9, 2012 | Outsourcing News |
In a press release published at news.yahoo.com, consultancy and global services research firm Everest Group expects the Finance & Accounting Outsourcing (FAO) market to bounce back with a 10-15 percent growth rate and is seen to post $4 to $4.5 billion in annual contract value (ACV) this year.
According to Everest’s Finance & Accounting Outsourcing Annual Report 2012, ACV in 2011 increased by 11 percent, though it is lower than the 18 percent growth reported in 2010.
Everest Group’s Vice-president Saurabh Gupta said even if the market was not able to meet growth levels last year, there were still a lot of strong market indicators such as the 200 contracts which are up for renewal and new transactions. However, fewer multi-processing contracts were seen because of the shift in the purchasing behaviour of clients. They are now more cautious, trying to avoid as many risks as possible. All in all, outsourcing is still a solution for high operating and labor costs, but this time, it can also address other challenges in business strategies and streamline core processes.
These are the other highlights from the report:
Gupta noted that competition in the FAO market is getting tougher. Proof of that is the sudden drop of market share of the top three providers from 65% to 50% within five years. Also, FAO providers were seen to invest more on technology.