Asia-Pacific embraces finance and accounting outsourcing


Asia-Pacific embraces finance and accounting outsourcing


Asia-Pacific embraces

finance and accounting


By Andrew Friars

This article was published

in the July 2007 issue of

FAO Today.

With a projected annual growth rate of

nearly 16 percent, finance and accounting

business process outsourcing (BPO) is

finding a receptive base in Asia-Pacific as

organizations move up the value stream to

go beyond transactional processing.

Once a laggard in the adoption of

finance and accounting BPO, the Asia-

Pacific region is now showing the

fastest growth rate in the world, with

many companies poised to leapfrog their

European and US rivals in the adoption

of higher-value outsourced services.

Uptake of finance and accounting BPO

services in the region has traditionally

been slow, probably because of a

general preference for wanting to wait

and learn from the experience of others.

But with many of the world's largest

and most successful companies now

engaged in outsourcing, Asian companies

have joined the trend. They are now

seeing the benefits, with that message

spreading to many companies.

At the same time, these companies are

experiencing ever-increasing economic

pressure to lower costs. Outsourcing is

seen as a logical and practical way of

getting there, delivering those cost

reductions while incorporating greater

transparency and standardized processes.

Research from IDC shows the finance

and accounting BPO market in 2005

totaled $2.3 billion in Asia Pacific. IDC

projects that the market will increase

to $4.9 billion by 2010 at a five-year

compound annual growth rate (CAGR)

of 15.9 percent.

Historically, Asian companies have

leaned toward very rapid adoption of

proven concepts, and the current high

growth in FAO shows this to be no

exception. This growth has occurred in

parallel with a general increase in overall

outsourcing activity in other areas of

the business as organizations realize

that often it is better to hand off

back-office functions to a third party.

Forms of infrastructure and application

outsourcing are becoming commonplace,

and the natural progression is to move

to the outsourcing of processes.

All of this is boosted by a wave of

shared-services delivery through the

Asia-Pacific region, which has moved

from a national to an international

asis. As the risk in this journey increases,

companies look to share that risk with

expert providers through outsourcing.

Many companies are starting with socalled

low-risk areas in the realm of

transaction processing before moving

to higher-end functions such as business

analytics, performance management

systems, and report generation, followed

by support for policy and strategy

development. It is in these value-added

functions that Asian companies are

starting to lead their counterparts in

other parts of the world.

A further driver of the rapid uptake of

outsourcing services by Asian companies

is a shortage of experienced and

talented management throughout the

region. Outsourcing the back office—

particularly low-value activities such

as transaction processing—allows

companies to turn their attention to

front-office services and value-adding

activities by freeing up key executives

to work on tasks that deliver greater

value to the business. Another benefit

that companies that outsource and

pursue a growth agenda often realize is

the increased flexibility to revise scope

or integrate finance operations of

acquired organizations.

As process realignment programs move

on a journey from transaction processing

outsourcing to more highly valued

arrangements, companies are looking

for more collaborative relationships.

One major Australian bank is now

working with Accenture in outsourcing

certain decision-support activities,

gathering business analytics, and

presenting it in a way that delivers

deep analytical information. This

particular client started with accounts

payable and then moved through

several waves of report generation and

decision-support activity.

Organizations are also realizing reduced

costs of adopting new technology

through an outsourced model. For

example, profit and recovery analytic

tools are able to detect payment errors,

such as duplicate payments or payments

that have not been made in accordance

with business terms. These sophisticated

tools can be loaded with various

contract terms for business spending

and not only interrogate databases or

past payments to find errors but also

to force new payments to be kept in

accordance with mandated terms and


Asian companies are quickly moving up

the finance and accounting BPO value

chain, taking on new services that are

only now being moved into outsourced

models in the US and UK But Asian

companies have been able to learn

from what has been done in the US and

Europe, using this knowledge to leapfrog

their businesses ahead rather than taking

the incremental development path.

About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company. Combining

unparalleled experience, comprehensive

capabilities across all industries and

business functions, and extensive

research on the world's most successful

companies, Accenture collaborates with

clients to help them become highperformance

businesses and governments.

With more than 178,000 people in 49

countries, the company generated net

revenues of US$19.70 billion for the

fiscal year ended Aug. 31, 2007. Its

home page is

Copyright © 2008 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

About the author

Andrew Friars leads the Accenture

finance, procurement, and customer

contact business process outsourcing

unit in Asia-Pacific.

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