F&A Outsourcing: Who Do You Believe?

Ann All

Who plans to outsource their finance and accounting activities -- everybody or nobody?


It's tough to tell, based on conflicting reports from two analyst firms, The Hackett Group and The Everest Group, released about six months apart.


According to the just-released Everest Group report, F&A outsourcing will grow 30 percent this year, following hearty growth of 45 percent over the last two years. It's currently a $2 billion market, a relative drop in the outsourcing bucket, but Everest Group seems quite bullish on its potential.


That's in contrast to the decidely more conservative tone taken by Hackett Group in its June report. It says outsourcing accounts for just 4 percent of financial process delivery and isn't likely to experience especially rapid growth, given companies' concerns over compliance and security issues. Companies are more inclined to use a shared-services model for financial processes, with 58 percent of them opting for onshore delivery.


That's another point of disagreement with Everest Group, which says that an "offshore component" is included in 80 percent of F&A outsourcing deals.


Even taking into account the fact that the two firms may be using different definitions for terms like "finance and accounting," "offshore" and even "outsourcing," these reports draw surprisingly different conclusions.

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