November 17, 2011: The business process outsourcing (BPO) service providers in India and China were the most benefited by efforts of the companies to overcome financial adversities and instability. In order to overcome the adverse economic problems, companies resorted to outsourcing to attain flexibility in their operations over a short period of time. This move was made by the companies during a time when they were putting in efforts to overcome the situation. It included freezing budgets, laying off of employees, and cut in salaries.
Even though companies outsourced their business functions, the outsourcing market was badly affected by the reduced spending across all the verticals. As the companies were cutting cost and sending off employees, it became difficult for outsourcing companies to get into long term contracts and commitments with the clients.
The global business process outsourcing market is dominated by the US and Europe. According to forecasts companies are about to experience skill shortages and lack of skilled employees. This is an important factor that drives companies to outsource their functions to third party service providers. The outsourcing service provider’s offer specialized services which require advanced technological capabilities which make them more attracting to the clients.
According to forecast, the finance and accounting sector is going to experience a rapid growth as more and more companies are trying to reduce cost and to outsource non core activities. In the finance and accounting process outsourcing sector, the US forms the largest market across the world. More over the demand for F&A services are found to be increasing in Central Europe, China and South America. The important adopters of the finance and accounting services include the manufacturing sector, logistics companies, financial services, and travel industries. In addition to these companies in the real estate sector and medical sector will also go for outsourcing their finance and accounting activities.
According to statistics, more than 55 per cent of the companies who outsource finance and accounting activity outsource it to India. A study conducted by Everest has found that 18 out of 20 F&A outsourcing service providers have their presence in India. The total number of delivery centers by these providers amounts to about 80, in India.
Recently India has also grown as a buyer market of finance and accounting services.
The demand for F&A services is going to rise in the developed markets and also there will be demand from late adopters as well. F&A outsourcing service providers have started to come up with industry specific solutions like solutions for Manufacturing and logistics industry.