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The Knowledge Community for Global Business & IT Services

HfS Blueprint Report


Finance & Accounting BPO
Excerpt for Genpact
March 2013

Phil Fersht
Founder & CEO
phil.fersht@hfsresearch.com
Brian Dubiel
Principal Analyst
brian.dubiel@hfsresearch.com

Table of Contents

Topic

2013 HfS Research Ltd.

Page

Executive Summary

Research Methodology

Service Provider Capabilities

13

Service Provider Profile

16

About the Authors

18

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Executive Summary

Introduction to the HfS Blueprint Report:


Finance and Accounting BPO Services

The F&A BPO HfS Blueprint Report is the first of its kind in the global services industry.

Unlike other quadrants and matrices, the HfS Blueprint identifies relevant differentials
between service providers across a number of facets under two main categories:
innovation and execution.

HfS Blueprint Report ratings are dependent on a broad range of stakeholders with specific

weightings based on 1,355 crowdsourced responses. Stakeholders include:

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F&A BPO Enterprise Buyers


F&A BPO Service Providers
F&A BPO Industry Influencers (sourcing advisors)
HfS Analysts

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Key Highlights: Finance & Accounting BPO in 2013


Deal activity rebounds. F&A BPO market has shown growth of 13% increase in deals 2012 after several

years of downturn. Contract size for multi-scope engagements has stabilized at $25M (ACV).
The F&A Big Four dominate the Winners Circle. Accenture consolidates its command of market share.

IBM, Genpact, and Capgemini round out the Winners Circle members.
Intense competition among the High Performers. Wipro, WNS, EXL, Xerox and Infosys pushing aggressively

for their share of new deals.


Execution trumps Innovation. The service providers are attempting to become more innovative in the F&A

BPO space, but the market still remains more focused on execution and delivery, assigning 70% of the
importance weighting to execution, 30% to innovation.
Market size grows. Total F&A BPO is expected to surpass $25B in 2013, at a growth rate of 8%, with multi-

process F&A BPO expected to reach $5B. 4 out of 10 enterprises ($5B+) intend to expand their F&A BPO
operations this year.
Industries experiencing secular shifts show highest growth. These include Telecom, Software/High Tech,

Media/Publishing and Retail/Hospitality.


Early adopter industries show slowed growth. Banking, Financial Services and Insurance and

Manufacturing still dominate a third of the market, but growth has slowed.
Market still nascent. All F&A functions are still predominately managed in-house by enterprises.
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Research Methodology

Research Methodology
Data Summary

This Report is Based On:

58 data points were collected from 745 live multi-

process F&A Business BPO engagements. Each


contract had a minimum of two core F&A processes
bundled and a minimum on $1M in TCV.

Data was collected in Q4 of 2012, covering 1355

buyers, providers and advisors/influencers of


outsourcing services. Included in this sample were
127 buyers of F&A BPO services.

Participating Service Providers

Tales from the Trenches: Interviews with F&A BPO


buyers who have evaluated service providers and
experienced their services. Some references are
supplied by service providers, but many are
interviewed in meetings conducted with HfS Sourcing
Executive Council members and participants in our
extensive qualitative researching process.
Sell-side Executive Briefings: Structured discussions
with service providers based on collected data
necessary to evaluate their innovation and execution
capabilities, market share and deal counts.
HfS State of Outsourcing Survey: The industrys
largest quantitative survey on outsourcing, conducted
with the support of KPMG, covering the views,
intentions and dynamics of 1355 buyers, providers
and influencers of F&A and business services.
Publically-available information: Financial data,
website information and presentations given by
senior executives, and other marketing materials.

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Key Factors Driving the HfS Blueprint

Criteria Weighting

Evaluation Criteria
Two major factors that impact service delivery:
Execution represents service providers
ability to deliver services. It includes:
Real world delivery of solutions
Quality of Customer Relationships
Market Share
Innovation represents service providers
ability to improve services. It includes:
Vision for End-to-End Process
Lifecycle
Integration of BPO and IT
Vision, Plans and Investments to Tailor
Solutions for Specific Industries
Leveraging External Drivers

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Criteria are weighed by crowdsourcing


weightings from the four groups that matter
most:

Enterprise Buyers (40%)


Service Providers (30%)
HfS Research Analysts Team (20%)
Advisors, Consultants, and Industry
Stakeholders (10%)

Weightings from this report come from HfS


2013 State of Outsourcing Study, conducted
with the support of KPMG.

How the HfS Blueprint Scores are Compiled

Provider A

vs.

Provider B

Provider B

vs.

Provider G

Provider G

vs.

Provider J

After providers respond to HfS Blueprint RFI, and upon


completion of client references and fact-checking, HfS
analysts conduct a paired-comparisons survey of service
providers in each category of evaluation. This involved
more than 700 unique provider comparisons.

Using ExpertChoice, an advanced statistical analytics


package, the data/rankings are compiled and compared
across all provider comparisons to identify
inconsistencies within the scores.
After a further data-refinement, the criteria weightings
are used to give each service providers a score in each of
the evaluation criteria components.

Once aggregation and scoring is complete, the service


providers scores are plotted, producing the HfS Blueprint.

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HfS Blueprint Scoring: Percentage Breakdown of Importance


Weightings
EXECUTION

Quality of Customer Relationships


Quality of Account Management Team
How Service Providers Engage Customers and Develop Communities
How Service Providers Incorporate Customer Feedback
Real World Delivery Solutions
Actual Delivery of Services for Each Sub-process
O2C
R2R
P2P
Other
Geographic Footprint and Scale
Usefulness of Services to Specific Client Needs of All Sizes
Flexibility to Delivery Both End-to-End Solutions and Point Solutions
Experience Delivering Industry-Specific Solutions
Market Share
Flexible Pricing Models to Meet Customer Needs

23.74%
10.49%
5.62%
7.63%
20.94%
9.63%
4.23%
1.71%
2.83%
0.85%
3.60%
7.71%
3.48%
4.23%
10.80%
16.28%

INNOVATION

Vision for End-to-End Process Lifecycle


Concrete Plans to Deliver Value Beyond Cost and Investment Into Future Capabilities
Integration of Technology Into Business Process
Continuous Improvement Methodology and Capability
Vision for Industry-Specific Solutions
Ability to Leverage External Value Drivers
Leverage New Technology, Security, Social Media, Mobility and Cloud Capabilities
Incorporate Regulatory Requirements Quickly and Proactively

TOTAL

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71.77%

4.63%
3.31%
3.47%
3.55%
3.80%

11.41%

28.23%

9.46%
7.35%

100.00%

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HfS Bases its Research on an Assessment Framework of


Services that F&A BPO Service Providers Offer the Market
Activities include and/or not limited to:
Consultancy like
products and
services. Identifying
the long term
strategy of F&A.

Financial Process Consulting


Change Management and Communications Support
Supporting Innovation Roadmap

Controllership
Activities

Higher level and


more analytical
focused F&A
activities and
process.

Inter Company Accounting


Regulatory/Statutory
Reporting
Management Reporting
Risk Management/Treasury

Transactional
Accounts

Low level and


process based
activities in the
F&A sphere.

Strategic Importance

Transformational
Responsibility

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Accounts Payable
Travel and Expense
Billing/Invoicing
Cash and Accounts Receivable
Credit

Internal Auditing
Financial Planning and
Analysis
Business Intelligence
Other

Collections
Revenue Accounting
Fixed Asset Accounting
Tax Filing
Payroll

Definition of Finance and Accounting Business Process


Outsourcing Services
Finance and Accounting Value Chain

Procure to Pay
Accounts Payable
Travel & Expense
Credit

Order to Cash
Cash App/Accounts
Receivable
Billing/Invoicing
Collections
Revenue Reporting

Record to Report
Fixed Asset
Accounting
Tax Filing
Payroll

Controllership
Activities
Inter-Company
Accounting
Regulatory/Statutory
Reporting
Management
Reporting
Risk Management/
Treasury
Internal Auditing
Business Intelligence
Financial Planning &
Analysis

Transformational
Financial Process
Consulting
Supporting
Innovation Roadmap
Change Management
& Communications
Support

HfS Value Chain Definition:


Value chain refers to the series of departments which carry out value-creating activities to
design, produce, market, deliver, and support a companys product or service. In this usage, we
refer to the range of primary processes and support services that providers offer to their clients.
In the case of the F&A BPO Services assessed in this Blueprint, only those engagements which
involve a minimum of two of these core F&A process bundled and a TCV more than $1M.
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Service Provider Capabilities

Winners Circle
Accenture
IBM

INNOVATION

High Performers

Capgemini
TCS

Wipro
Xerox

HP

EXL

Infosys

Cognizant
Steria

Serco

Sutherland

EXECUTION
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WNS

Genpact

Future of the Finance and Accounting Outsourcing Market


Vertical Focus driving F&A value. Clients have repeatedly referenced the industry-focused vertical

scope of F&A services as being of prime importance. HfS expects this trend to accelerate in the
future, where service providers will become F&A experts within given industries, with the capability
to offer insights and analytics. Notable industries where clients prefer providers with specific
vertical capability include Pharma, CPG, Retail and Insurance.

Blur between Procurement and F&A. The line between procurement and the finance back office is

starting to blur as companies look to reduce overhead and find synergies between the lines of
corporate groups. It will be imperative for service providers to keep abreast of the changing
landscape and address Finance and Procurement needs together.

Creating Relationships that Foster Innovation. As it gets harder to differentiate between the main

body providers in table stakes areas of price flexibility and global operational delivery, those
providers that are able to provide clear and measurable innovative improvements for clients will
dominate market share. The key is providers being able to demonstrate how they created
environments with their clients to work together to define business goals and outcomes. Its not
going to be about selling innovation, but more about creating environments to foster innovations.

Development of Client Communities. The need for more interaction between a providers client

base is abundantly clear. Clients have called for more cross collaboration, to gain a better
understanding of how other companies are leveraging their F&A BPO, and where best practices can
be identified. HfS anticipates smart providers to increase their involvement of driving more focus
groups within their F&A BPO client portfolios.

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Service Provider Profile

Genpact
Winners Circle
Market Share:
10.2%
Industry Leading: Execution
Developing Customer
Communities
Flexibility to Deliver End-to-End
and Point Solutions

Industry Leading: Innovation


Vision for End-to-End Process
Continuous Improvement
Methodology and Capability

Strengths

Challenges

Distinctive client culture. Genpacts clients talk more fondly about their
provider than many of its competitors. This is due to the notable humility of
Genpacts delivery staff and a bloody-minded determination to succeed.
Genpact has worked hard to get its clients on the right track and enjoys
many long-term established relationships as a result..

IT development and IT innovation remains a weak focal point. IT business


still remains quite small in comparison to other service providers in the
market. As customers look towards all inclusive deals and solutions, this
could ultimately hinder its ability to attract new deals. Clients have cited
the lack of new applications developed to boost innovation, however,
recent acquisitions of Headstrong and JAWOOD have significantly enhanced
Genpacts capabilities in capital markets and healthcare insurance, which
should improve F&A capabilities in these industries.

Ability to be flexible in offering services to customers in a customized,


tailor-made approach or providing the best-fit solution. Genpact offers
both a plug and play solution as part of service offerings and an end-to-end
solution for a multitude of services.
Proven performer in both the high-end and mid-market client base.
Genpact has does an excellent job in servicing a wide range of clientele.
Account management teams have generally risen above most other
competitors in terms of quality.
The Smart Enterprise Processes (SEPSM) methodology is a game-changer in
the BPO market; a scientific methodology enabling a comprehensive
analysis of business activity across the entire enterprise.

Financial Services
Insurance,
Retail and CPG
Pharma
Manufacturing
Services Industry
Travel

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Apparent lack of depth and vision in some industry verticals. Although


strong in pharma and CPG, and showing potential with recent acquisitions
in others, the lack of a top tier IT business that could lead to new industry
focused relationships could hold the firm back.

Ability and openness to support both existing customer based technology


solutions or propose own business tools in order to address the unmet
functionalities of the systems and processes.

Client Industry Verticals

Over-reliance of F&A headcount in India. A more globally-diversified staff


spread would be more attractive for more regional buyers looking for a
greater degree of local support and business continuity planning in the F&A
space.

Key Clients

GE
Kimberly-Clark
Walgreens
AstraZeneca
UCB
Hyatt
GlaxoSmithKline
United Biscuits
Telefonica O2
Cigna
Penske
Ashland

Global Operations Centers


Headcount: 16,000+ FTEs

India: (12,300+)
China (600+)
Philippines
Brazil, Columbia, Mexico, Guatemala
Czech Republic, Hungary, Poland, Romania
Kenya, South Africa, Morocco
Netherlands
U.S.

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Business Platforms Offered

Akritiv
E-Invoicing
ProFlow
NICE
CMS
Duplicate Payment Audit Tool
E-Billing platform
Callisto
Manual Journal Entry
Close Tracker
Questor
Smartstream
SmartView

About the Authors

Phil Fersht
Founder and CEO, HfS Research
Overview
Over 17 years business experience in the global outsourcing and shared
services industry across US, Europe and Asia
An acknowledged industry advisor, strategist, author, speaker, practitioner
and blogger
Advised on 100s of global IT & BPO engagements

phil.fersht@hfsresearch.com

Previous Experience
Practice Head for IT Services & BPO Practice, AMR Research (Gartner Inc.)
BPO Marketplace Leader at Deloitte Consulting
Vice President for Everest Group, leading research and consulting teams
based in the US and India.
Prior Career
Regional Director, IDC Asia/Pacific
Program Manager, European IT Markets Services, IDC Europe
Education
BS with Honors in European Business & Technology from Coventry
University, United Kingdom
Diplme Universitaire de Technologie in Business & Technology from the
University of Grenoble, France

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Brian Dubiel
Principal Analyst, HfS Research
Overview
Covers the Finance and Accounting and Procurement Outsourcing
industries for HfS Research
An acknowledged industry expert in BPO operations, having worked on
multiple sourcing engagements including in areas such as KPO, FAO, PO
and LPO domains

brian.dubiel@hfsresearch.com

Previous Experience
Served as the outsourcing category manager for State Street Corporation,
acting as an internal advisor for both procurement operations and
corporate outsourcing projects
Initiated and developed State Streets Outsourcing Center of Excellence,
creating corporate outsourcing tools and methodology, and standardizing
knowledge for internal business lines to better govern their outsourcing
providers and sourcing events
Education
Dual BA in Economics and Philosophy from Trinity College
MBA with an Operations and Supply Chain concentration from
Northeastern University

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About HfS Research


HfS Research (www.HfSResearch.com) is a leading independent global analyst authority and knowledge community for
the business and IT services industry.
HfS is unique in the fact that it serves the research and strategy needs of business operations leaders across finance,
supply chain, human resources, marketing, customer management, IT and core industry functions. In addition to
researching business operations strategies, HfS educates and facilitates discussion among the world's largest knowledge
community of enterprise services professionals, currently comprising 120,000 subscribers. HfS Research also facilitates
the HfS Sourcing Executive Council, the acclaimed elite group of sourcing practitioners from leading organizations, which
meets on a bi-annual basis to share the future direction of the global services industry and discuss the future enterprise
operations framework.
Led by recognized industry expert Phil Fersht, HfS Research differentiates itself with its global team of expert services
analysts with real industry experience, provocative and opinionated research, unrivalled market analytics, and a view of
technology as an enabler for business process improvement. Its on-demand expertise relationship model helps clients
leverage HfS knowledge and strategic insight in a rapid, responsive and engaging manner.
In 2010 & 2011, HfS was awarded Analyst of the Year by the International Institute of Analyst Relations (IIAR), the premier
body of analyst-facing professionals, and achieved the distinctive award of being voted the research analyst industry's
most Innovative Analyst Firm in 2012.
Now in its sixth year of publication, HfS Research's acclaimed blog Horses for Sources is widely recognized as the
leading destination for unfettered collective insight, research and open debate of sourcing industry issues and
developments.
To learn more about HfS Research, please email research@HfSResearch.com.

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