According to a report by the Everest Research Institute, the Finance and Accounting Outsourcing (FAO) market will experience an impressive 20% growth (year-on-year) in terms of Annualized Contract Value (ACV) in 2011. This is the same growth experienced in the past before the recessionary period came in.
Whilst we do sometimes come across research institutes that grab headlines with such figures, the statistic from Everest may not be that unreasonable. This is not just because of the increased demand for Finance & Accounting outsourcing which will show limited growth within 2011 but due largely to the number of 7 year contracts signed in 2004-5. The renewals in 2011 will be estimated to stand at approximately $2 billion Total Contract Value and will contribute to the growth in FAO. These renewals are likely to coincide with expansion of scope of services either from a process perspective, a divisional perspective or a geographical perspective.
So expect a good year for F&A outsourcing, but that largely to be driven by customer renewals which will be more aggressive with their outsourcing strategies.
Tags: FAO, Outsourcing
