Finance and Accounting Outsourcing Predicted to Grow 60 Percent in 2006
Finance and accounting outsource (FAO) contract signings increased 40 percent during 2005, with the majority of business going to Accenture and Capgemini, FAO Research, Inc. reports. The firm, which is the only research firm focused exclusively on the FAO market, also predicts there will be an additional 60 percent growth in the number of FAO contracts closed by the end of 2006.
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“Growth in the FAO market is accelerating at an incredible pace that will continue through this calendar year,” Linda Ross, CEO of FAO Research, Inc. said Tuesday when announcing the results of The World’s Biggest F&A Outsourcing Contracts, 2004-2005: An Overview and Global Market Analysis. “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.”
According to The World’s Biggest F&A Outsourcing Contracts, 2004-2005: An Overview and Global Market Analysis, a total of 67 long-term, multi-process, often global FAO arrangements were signed in the past two years. Thirty-nine were signed in 2005, up from 28 in 2004. Among the 11 service providers competing for FAO contracts, the most significant FAO service providers are Accenture and Capgemini for the following reasons:
- has the largest market share of any service provider worldwide, with 30 percent of the FAO market in 2005, down from 33 percent in 2004,
- won the most high-priced FAO contracts ($100 million or more),
- won the most FAO contract involving global service provision,
- achieved the most significant FAO presence in the largest number of industries, and
- won the most long-term contracts (7+ years)
- has the second-largest FAO market share worldwide, with 11 percent in 2005, down from 14 percent in 2004, and
- won the most seven-year FAO arrangements in 2004 and 2005
The report also includes a comprehensive listing of all 67 FAO contracts signed over the past two years, with detailed information regarding the size, scope and customer profile. The report includes analysis of the key industries where FAO is most notable, the geographic range of outsourcing engagements and the specific services being outsourced.
The World’s Biggest F&A Outsourcing Contracts, 2004-2005: An Overview and Global Market Analysis is available from www.faoresearch.com for $2,500 or as part of an annual subscription price.