Recession to boost finance, accounting BPO: IDC

SYDNEY, Australia: Increased regulation and the demand for transparency are becoming strong drivers for enterprises to standardise their Finance and Accounting (F and A) Business Process Outsourcing (BPO) activities.

This is also allowing for ''best practices'' in financial management, which is one of the biggest factors driving F and A BPO adoption, reveals IDC in its special report on the trends and opportunities arising within the Finance and Accounting BPO landscape.

''Global delivery is becoming a deal clincher in almost all contracts. This is likely to pose a threat to some of the local specialised F and A providers that do not have a global delivery capability and can only offer limited pieces of the value chain.

''As customers embark on supplier consolidation they are clearly showing a preference for multi-function or full scale BPO providers like IBM, Accenture or the Indian providers like Infosys, Wipro and HCL Technologies. In most deals these players are getting first right of refusal over the function specific specialised providers,'' comments Aprajita Sharma, Program Manager BPO at IDC.

The economic downturn is expected to boost demand for F and A BPO as it requires less customisation when the process and underlying technology are outsourced (when compared with HR and customer care BPO).

Many F and A standards are regulated and have common practices with customers. This enables BPO service providers to deploy a common platform across multiple customers, provide less customisation work, allowing better operating margins and enable customers to benefit from the economies of scale equation.

''In contracts where the underlying technology is also outsourced, over 75% of F and A contracts have packaged ERP systems, with SAP taking almost 45% of this market, further reducing the amount of customisation workload,'' Sharma adds.