News Scan

F&A Jobs Heading Overseas

Finance and accounting functions rank second only to call-center processes as candidates for offshoring, according to a report from Everest Research Institute. Every multiprocess finance and accounting outsourcing (FAO) contract signed in 2004 and 2005 contained an offshore component, notes the Dallas-based firm.

U.S.-based FAO providers are beefing up their offshore capabilities. IBM added more than 12,000 full-time equivalents to its workforce in India last year, largely to accommodate the growth of IBM Global Services. In April, EDS offered $380 million to acquire a majority stake in India-based software and outsourcing services provider MphasiS.

At the same time, the adoption curve for FAO is heading toward the vertical. According to Cambridge, Mass.-based consulting firm FAO Research Inc., 2005 saw a 40 percent increase in the number of large-contract signings over the previous year's total. Buyers of FAO services included General Electric, Kodak and Procter & Gamble.

"Growth in the FAO market is accelerating at an incredible pace that will continue through this calendar year," predicts Lisa Ross, CEO and founder of FAO Research Inc. "Our analysis shows that achieving greater cost savings, accessing better technology to facilitate global expansion and gaining industry best practices are the key motivators of companies ranging from financial services to chemical production to government and manufacturing. We predict this market will grow another 60 percent in 2006."

While the FAO marketplace remains in flux, Accenture, WNS and Capgemini have carved out leadership positions. Accenture captured 31 percent of high-dollar FAO contracts last year, according to an analysis by FAO Research.

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