As speculated during our March recap, the F&A BPO market is bounding on. I can now confirm (and you heard it here first) there were 107 multi-process F&A BPO contracts signed in 2007 – that’s 20% growth over 2006. In addition, the average contract value stabilized at the $33m level. I’ll be delving more into this market in my research in the coming weeks. Strong performances from Accenture, IBM, Genpact, HP, InfosysBPO and Vengroff Williams were the prime catalysts for the record year. The outlook for this year is even stronger.
I have always been a believer in a robust business model for F&A BPO – it balances the benefits of offshore resources with financial workflow solutions, and – in theory – allows finance executives to focus more time on delivering their leadership information they need to base business decisions – and less time overseeing tactical process issues. However, like any solution involving the transition of labour and processes, the success of F&A BPO depends heavily on the buyer’s patience and ability to get the best out of their vendor, and their willingness to re-tool themselves to operate in an outsourced environment.
In any case, it’s going to be a fascinating period ahead for this market with the economic situation. Some companies will aggressively pursue outsourcing strategies, spurred on by the cost-savings, while others will adopt a short-term mindset of "getting through the next quarter", and the upheaval of a multi-year outsourcing engagement will be low on the priority list.