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May 01, 2012

F&A Outsourcing Market to Make Big Gains in 2012, Says Everest Group



The Everest Group has recently announced the results of its research into the Finance & Accounting Outsourcing market, and the news for that particular market is looking pretty good on the whole. Everest is expecting some big gains to show up following a slowdown that lasted most of 2011.

The Everest Group's projections suggest a rebound of between 10 and 15 percent is likely in the Finance & Accounting Outsourcing market, with total dollar values coming to somewhere between $4 and $4.5 billion in terms of annual contract value for the year 2012.

These numbers sound impressive enough by themselves, but the overall market for F&A Outsourcing has been steadily expanding for years now; the "slowdown" described in 2011 represented a total market growth of merely 11 percent, where the year 2010, it grew 18 percent over the previous year. The vice president of the Everest Group, Saurabh Gupta, explained that there were fewer new contracts signed in 2011, as well as some contracts being terminated outright as buyers left multi-process contracts in favor of phased approaches, which were lower in overall risk. Many will recall that 2011, overall, was a terrible year for risk. Gupta further expects that value will be the watchword in 2012, with companies looking for "comprehensive, industry-specific, and end-to-end process driven" solutions.

Further breakdowns in the market saw that the United States led the world in F&A Outsourcing with over half the total contracts, and the European markets seeing a slowdown, with the Asian-Pacific markets stepping up in their place. Smaller companies, those with under $5 billion in annual revenue, made up an increasing percentage of the F&A Outsourcing market, and oddly, while the outsourcing market grew; many firms were looking to a more balanced mix of onshore/offshore/nearshore approaches.

With competition getting hotter in the F&A Outsourcing market, and plenty at stake, the winners in this particular market will be those firms that best understand the clients' needs and can provide accordingly, according to Gupta. Outsourcing has never had a very good connotation to it, but with the market's increasingly global status, it will likely be a fact of the business climate for some time to come.




Edited by Brooke Neuman
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