Competitive intensity between Finance and Accounting Outsourcing (FAO) suppliers is spurring increased focus on technology-led solutions as a point of differentiation, leading toward M&A and partnership activity to expand capabilities as well as pioneering of platform-based approaches, according to a study of the FAO technology landscape by Everest , a global consulting and research firm.
While the top five suppliers (Accenture, ACS, Capgemini, Genpact, and IBM) account for almost 70% of the FAO market, the major contenders (including TCS, Infosys, Wipro, and WNS), which accounted for 55% of new contracts signed in 2008, are beginning to challenge their dominance and technology is playing a pivotal role in their go-to-market.
The study, Technology Flavors in FAO ? From Tools to Platforms, focuses on the different types of technology in FAO, add-on tools and solutions that enable technology augmentation and the current landscape of platform-based FAO offerings.
?The study clearly exemplifies the role of technology in playing a much more invasive role in the FAO market. It is interesting how domestic players are steadily making inroads in the FAO market by effectively leveraging technology.
Buyer needs and requirements are clearly driving the role of technology in FAO ? a segment which is no longer considered a tie and run solution ? as evidenced by recent increase in M&A activities and partnerships, particularly with independent software vendors.
Platform based FAO is in fact emerging as a key lever to create competitive differentiation in an increasingly competitive supplier market,? said Gaurav Gupta, Country Head and Principal, Everest.