FAO Research Predicts Strongest Growth Year Ever for Outsourcing Contracts  

25 June 2008:

BOSTON--(BUSINESS WIRE)--FAO Research, Inc., the only research firm focused exclusively on the Finance & Accounting Outsourcing (FAO) market, today announced publication of its most popular annual report that analyzes FAO market activity and trends shaping the corporate finance landscape worldwide.

FAO Research’s new report predicts a 34% increase by year-end 2008 in new FAO contract signings, renewals, add ons and renegotiations of existing outsourcing engagements. Each of the full-service suppliers is expected to average 8 new FAO contract wins and 6 renegotiated/ extended deals, with a few of the large suppliers each expected to win 25 new/renewed contracts.

“We are convinced that 2008 will generate the strongest growth of FAO contracts in any single year yet,” said Lisa Ross, CEO of FAO Research. “Within our challenging economic climate, more companies than in any previous year are being driven to outsource finance functions to third-party suppliers to achieve greater cost savings, access better technology, gain industry best practices and facilitate global expansion.”

FAO Research estimates in the report, titled An Overview and Analysis of the Finance & Accounting Outsourcing (FAO) Market, Mid-Year 2008 (including Trends & Predictions), that by year-end 2008, outsourcing service providers and companies worldwide will have engaged in 456 multi-process, 3+ year FAO contracts since 2004, with a compound annual growth rate (CAGR) of 30.7%.

Other key findings in the report include:

  • Most major FAO contracts today, or 66%, are valued at less than $50 million, ranging from a few million USD to a maximum of $489 million.
  • There is a major up tick in US-based contract signings this year, although the largest number of FAO deals over the past four years has involved service provision in Europe, representing 43% of FAO contracts signed from 2004-2007.
  • More than 75% of outsourced finance functions will be handled offshore, although buyers increasingly will opt for a mix of offshore, onshore, nearshore and onsite service provision.
  • Many buyers are going public with their FAO initiatives in 2008, with some proclaiming that their involvement in FAO has helped them achieve financial successes companywide.

“What we are seeing in the FAO domain is a classic example of healthy market growth,” continued Ross.

An Overview and Analysis of the Finance & Accounting Outsourcing (FAO) Market, Mid-Year 2008 (including Trends & Predictions) provides an analysis of the FAO service provider landscape and presents detailed predictions for FAO market activity globally. The report is available for USD$2500 at www.faoresearch.com.

About FAO Research, Inc.

FAO Research, Inc. is the only independent research firm worldwide focused exclusively on the Finance & Accounting Outsourcing (FAO) market. FAO Research conducts market research, performs custom research and hosts events for FAO service providers, advisors and companies that want to better understand market activity, the supplier landscape and buyer needs. With frequent publishing of reports and unbiased viewpoints, FAO Research is a trusted source for impartial research and opinions. For more information, visit www.faoresearch.com.

FAO Research
Lisa Ross, 617-787-FAOR (3267)
CEO and Founder

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