Accounting & Finance Outsourcing Expected To Add 15%-20%

April 11, 2011

According to published reports, accounting and finance outsourcing is speculated to increase by 15% – 20% in 2011. This will mean more than $4 billion in annual contracts.

A report by advisory firm, Everest Group revealed that contracts for accounting and multipurpose finance added nearly 15% in 2010 in comparison to a year ago figure of 10% in 2009. In terms of total contract value, new contracts hit a high of $5 billion in 2010, said the study by Everest.

The Everest study showed that the accounting and finance outsourcing market hit $3.5 billion in terms of yearly contract agreements in 2010. The represents approximately $28.5 billion in overall spending on accounting and finance outsourcing, reports accountingtoday.com.

The accounting and finance outsourcing market carries with it an opportunity worth $150 billion o $200 billion; this is divided evenly throughout third party vendors and captives or as shared services. The third party sourcing market is just 5% – 10% of the potential total figures. This signals a massive opportunity for value creation.

Vendors such as IBM, Accenture, Capgemini, Genpact, HP and Infosys BPO are the leading service providers while Wipro, TCS, WNS, Steria, ACS-Xerox, Vengroff Williams& Associates, Cognizant, EXL Services, Outsource Partners International and Intelenet are also named in the report. Emerging service providers such as Minaca, HCL, iGate-Patni and KPIT Cummins Infosystems were other outsourcing firms mentioned in the Everest report.

Incidentally, the five vendors that amassed the most significant gains in 2010 were Genpact, Accenture, IBM, WNS and TCS.

Apart from a spike in accounting and finance outsourcing agreements in 2010 over 2009, the outsourcing market hit an all time high in extending contracts. This along with contract expansions converted into almost 55% of growth in yearly contract worth in 2010. This organic growth is expected to go forward with contracts tagged at $6.2 billion for extending contract agreements in three years.


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