Outsource Issue 23 - (Page 102)
THIS ISSUE: F&A BPO; CLOUD INSIGHTS
POST-RECESSION F&A BPO
A rebounding market, but is it taking a new direction? HfS founder and CEO Phil Fersht reports…
ecent HfS Research of 209 organisations (Figure 1) indicates that F&A processes are the second-most-proliﬁc candidates for moving into an outsourced environment, after application development and maintenance. Thirteen per cent expect to start an F&A BPO engagement for the ﬁrst time over the next 12 months, while four-tenths plan to increase the scope of their current F&A BPO activity.
(often in the hundreds per contract) being displaced with offshore staff. The tendency for organisations in these industries to have large, centralised – and often regional – shared service centres, combined with a strong afﬁnity to engage in outsourcing delivery models, has put them in a strong position to take advantage of a provider base eager to offer attractive pricing to grow their delivery businesses. While there is still untapped potential in these sectors, the heavy adoption from these sectors really drove market growth in the period leading up to the recession.
driving out cost, but also to their operating more effectively as global organisations in this new economic environment. More than half of all buyers are citing the need (Figure 3) to globalise and transform processes as prime outsourcing motives - and this is across all size-classes of customers. The need to globalise is impacting all companies, and outsourcing is providing one vehicle to help ﬁrms achieve it.
HfS has observed a number of factors (Figure 2) why the market for new F&A BPO engagements boomed from 20052008, before slowing to a more modest growth rate: Many energy, utilities, manufacturing and consumer goods ﬁrms dived in together to fuel much of the earlier F&A BPO growth. Most of the “Phase 1” F&A BPO engagements were centred heavily on large organisations from these industries making substantial savings on labour arbitrage-based engagements, due to large numbers of onshore accounting staff
Many organisations put BPO plans on the backburner when tackling the recession, but are now looking to overhaul their cost-structures and global operations. The change and short-term disruption that BPO entails moved it down the priority list for many companies during the unprecedented downturn, where mere survival was the priority. However, now the global economy is in recovery and organisations have reassurance their immediate futures are safe, attention is now turning not only to
Other industries are now opening up to F&A BPO delivery. HfS’ analysis of all F&A BPO engagements since the beginning of 2008 shows the emergence of other industries opening up to the F&A BPO value proposition, namely hi-tech/telecom and ﬁnancial services (Figure 4). While these industries have been traditionally very aggressive with their use of outsourcing models for IT and customer operations services, they initially shied away from F&A due to the complexity of their accounting operations and a cultural afﬁnity to keep their cash-cycle management in-house. However, the improved capabilities of some service providers to cater for these
Phil Fersht is Founder, Chief Executive Ofﬁcer and Research Director of HfS Research. He was named “IIAR Analyst of the Year 2010” by the Institute of Industry Analyst Relations (IIAR). phil.fersht@HfSresearch.com
Table of Contents for the Digital Edition of Outsource Issue 23
Outsource Issue 23
News & Comment
More Than Just A Headcount
Call Centre Technology
Cutting Through The Noise
All In The Genes?
It’s Time For Contact Centres To Get Socially Responsible
Right From The Start
All In The Game
Relationship Management Centres
A New Reckoning?
The Music of Outsourcing
Top Ten Tips
The Legal View
HfS: New outsource Partner
The Last Word
Outsource Issue 23