UK Economy Officially Out Of Recession But Finance And Accounting Outsource Market To Grow In 2010
The first official figures out this week reveal that Britain is technically out of recession, but pressure on companies to cut costs remains intense.
The rapidly evolving market for the outsourcing of finance and accounts (F&A) – driven by the current economic climate and changing customer preferences – has resulted in a raft of solutions being developed to optimise cost-savings and enhance efficiencies inside the accounts departments of large and small businesses.
While growth in the market for outsourcing F&A has been hampered over the past decade as a result of overseas suppliers struggling to develop a viable economic model for switching these services abroad, analysts expect the market to grow significantly in 2010.
India and other off-shoring centres have now emerged as places of excellence for technical and process capability, which enables suppliers in these locations to add value to F&A services. Analysts expect 2010 to be characterised by a growing trend of businesses outsourcing key functions of their accounts department, including debt collections, accounts payable and accounts receivable.
Analyst and advisory firm Nelson Hall estimated that the F&A outsourcing market was worth $2.6 billion in 2009 and the firm expects it to continue to grow at a rate of 11% per annum over the next four years, bolstered by the current economic environment which makes it highly important for organisations to implement cost-effective and streamlined back office processes that can additionally benefit from the ‘best practice’ processes evolved by vendors servicing multiple clients.
John Willmott, Chief Executive Officer (CEO) of Nelson Hall, said: “Pricing of F&A outsourcing is still frequently carried out on a per FTE basis. However, due to high levels of economic uncertainty it is highly important for organisations to achieve volume flexibility within their BPO contracts, which can be more readily achieved with transaction pricing once a baseline has been established.”
Willmott added: “There are also advantages to establishing business-oriented metrics early in a contract since use of these helps to guide and encourage service innovation in line with an organisation’s overall business goals leading to increased business effectiveness”.
I find that flexibility in a pricing model is key to making a successful relationship. To ensure that the pricing remains correct it is essential to track performance and productivity on an ongoing basis so that any corrections can be mutually agreed. The key dimension of correctness is to have a fair performance metric against which the performance is measured and assessed for any bonus or penalties, making it meaningful for both parties to strive to improve the performance on a continuous basis.
Ravi Pandey
As Sr Vice President of NIIT Technologies, Ravi Pandey is responsible for the P&L of the Software and BPO business in UK including Sales, Delivery and Operations. He is also an executive sponsor of some global accounts. In addition to his current role as a member of the executive management team in NIIT Technologies, Ravi has established himself as a much quoted thought leader in the IT industry in UK. Ravi reports to the Managing Director and works out of the company offices in London.
As Sr Vice President of NIIT Technologies, Ravi Pandey is responsible for the P&L of the Software and BPO business in UK including Sales, Delivery and Operations. He is also an executive sponsor of some global accounts. In addition to his current role as a member of the executive management team in NIIT Technologies, Ravi has established himself as a much quoted thought leader in the IT industry in UK. Ravi reports to the Managing Director and works out of the company offices in London. ...less info
