Enterprises—More Open than Ever to Outsourcing—Will Drive Double-Digit Growth in Finance and Accounting Outsourcing (FAO), According to Everest Group
Everest Group projects that the finance and accounting outsourcing (FAO) market will grow significantly (up to 10% year-on-year) in 2022.
While FAO is one of the most mature Business Process Services markets, it is far from reaching saturation, and great growth opportunity still exists in the market.
“FAO market will regain its pre-pandemic momentum and grow at a healthy clip for the next few years.”
Shirley Hung, Everest Group
Everest Group projects that the finance and accounting outsourcing (FAO) market will grow significantly (up to 10% year-on-year) in 2022, because enterprises are demonstrating an openness toward expanding their scope of services with third-party service providers. While FAO is one of the most mature Business Process Services markets, it is far from reaching saturation, and great growth opportunity still exists in the market, as evidenced by the double-digit growth rates that Everest Group is forecasting over the next few years.
FAO buyers are increasingly embracing the advantages third-party providers bring to the table, as reflected by these key trends:
Mature buyers are becoming more open to leveraging third-party support across more complex, judgment-intensive processes [such as financial planning and analysis (FP&A) and tax] as well as industry-specific processes (such as premium collections and claims accounting in the insurance sector). Other industries where specialized expertise in finance and accounting is highly valued include banking and financial services (BFS), media and entertainment, healthcare, retail and consumer packaged goods (CPG), and travel and logistics.
CFOs and other finance leaders are increasingly leveraging a “one-team” approach with third-party providers to centralize governance frameworks; implement environmental, social and governance (ESG) initiatives; and demonstrate success with measurable and standardized metrics.
Organizations are also becoming more open to leveraging service providers’ support in their Global Business Services (GBS)/Shared Services Center (SSC) operations.
Service providers are positioning for growth by evolving in these ways:
Developing more flexible global services delivery and location models. Providers are rebalancing and “de-densifying” work across locations while enabling office, work-from-home and hybrid models.
Building a robust talent management strategy with a well-differentiated, techno-functional talent pool.
reating robust, agile and secure workspaces by investing in collaborative tools and platforms.
Investing in partnerships to cater to digital demand, especially with respect to cloud, AI (artificial intelligence) and D&A (data and analytics).
Creating synergies and market differentiation by unifying digital assets into best-of-breed Business-Process-as-a-Service (BPaaS) platform solutions that help buyers minimize upfront capital expenditures.
“The finance and accounting outsourcing market has been resilient throughout the pandemic, continuing to grow at a rate of 9 to 11 percent,” said Shirley Hung, partner at Everest Group. “During this time, service providers have proven themselves to be valuable partners, not just in cost control, but in far more sophisticated ways, like helping organizations respond to workforce challenges, adopt digital technologies, and develop strategies for governance, ESG, and more. We’re also seeing that buyers are much more confident in using service providers for complex, judgment-intensive processes. All of this suggests that the FAO market will regain its pre-pandemic momentum and grow at a healthy clip for the next few years.”
To read more, please visit: https://www.everestgrp.com