Outsourcing in the finance and accounting market is set to increase by 10% over the next five years, and demand for governance and compliance outsourcing is likely to go up by 20%, according to research from investment bank Baird
The report estimates that the global business process outsourcing (BPO) industry is worth $150bn (£99bn) and finance and accounting outsourcing accounts for 16% of the total at $25bn (£16.4bn).
The lion’s share of outsourcing is attributable to information technology (IT) outsourcing, valued at £500bn, when the total outsourcing market is taken into account, currently valued at $1 trillion.
Outsourced finance and accounting services include financial reporting, payroll, accounting and tax services, fund administration and fiduciary services.
It cites lower costs and the opportunity to focus on core business as two key drivers, and says the $10bn outsourced governance, regulation and compliance market is forecast to grow at 20% annually as the post-Lehman regulatory environment becomes increasingly difficult to navigate.
The survey Transformation of Business Process Outsourcing says the BPO industry has experienced a significant increase in M&A activity and predicts more consolidation given the fragmented nature of the market.
Kiran Paruchuru, managing director at Baird, said: ‘Business process outsourcing continues to transform, driven by new business models, disruptive software and more diverse end markets.’
The full report is available here
