Introduction

The global multi-process FAO market witnessed a moderate growth of 10% in 2012, showing signs of a mature and stable market. Beyond the cost reduction process improvement, standardization and scalability/flexibility drove FAO adoption, emphasizing a cost+ value proposition. Moreover, market adoption moved beyond the traditional markets to cover under-penetrated markets as well.

In this study, we analyze the global multi-process FAO market in 2012. We focus on

• Market size and buyer adoption
• Value proposition and client satisfaction assessment
• Solution characteristics across contract size, process scope, technology, industry alignment, global sourcing, pricing structures, and performance metrics
• FAO service provider landscape covering service providers’ market share and areas of investments

Scope of analysis

• Third-party FAO deals; it does not include shared services or Global In-House centers (GICs)
• Over 800 multi-process FAO deals signed as of 2012 with a minimum of two F&A processes, over US$1 million in ACV, and a minimum contract term of three years
• Coverage across 20+ FAO service providers with multi-process capability including Accenture, Aditya Birla Minacs, Aegis, Capgemini, Cognizant, Datamatics, EXL Services, Genpact, HCL, HP, IBM, iGATE, Infosys, IQ BackOffice, NCO, Quatrro, Serco, Steria, Sutherland Global Services, TCS, Wipro, WNS, Xchanging, and Xerox
• Global survey and one-on-one executive-level buyer interviews to understand how organizations perceive their FAO engagements

Content

This report assists key stakeholders (buyers, service providers, and technology providers) I understand the changing dynamics of the FAO market. It also helps them identify the trends and outlook for 2013. Further, the report also provides a comprehensive coverage of the global FAO market including detailed analysis of market size and growth, buyer adoption trends, FAO value proposition and client satisfaction, solution characteristics, and service provider landscape. Some of the findings in this report, among others, are:

• The global multi-process FAO market grew at the rate of 10% to reach ACV of US$4.3 billion
• Over 65% of the ACV growth in 2012 was contributed by contract extensions/renewals
• Europe witnessed the maximum increase in FAO adoption. Share of mid-market and small buyer segments also increased significantly in 2012
• Buyers are increasingly adopting non-advisor-led competitive bidding route for sourcing F&A services
• Cost+ value proposition is driving the FAO market
• Service provider performance is up-to-the-mark against the metrics important to FAO buyers, resulting in high satisfaction levels. However, buyer organizations have highlighted some areas of improvements for service providers to work upon
• Buyers continue to adopt a phased approach to F&A outsourcing. Adoption of end-to-end process-driven approach is on the rise
• Analytics as well as risk management & compliance are emerging as new areas of interest in the market
• With respect to the industry alignment, F&A services are increasingly getting industry-specific
• India continues to be the predominant hub of offshore delivery, providers are striving to build a balanced onshore-nearshore-offshore model
• Technology augmentation model is becoming the prevalent approach, at the same time, platform-based solutions are also gaining traction. Further, service providers are also creating F&A specific mobility solutions
• Competition in the FAO market continues to rise. The share of the top three service providers declined from 68% in 2002 to ~50% in 2012