Rapid Transformation of Finance Boosts Outsourcing

Rhea-AI Summary

Information Services Group (NASDAQ: III) has released a report highlighting the growing demand for Finance and Accounting Outsourcing (FAO) services as organizations adapt to significant changes in their operations post-COVID-19. CFOs are now taking on strategic roles, pushing for business transformation while leveraging third-party providers for essential skills in budgeting, forecasting, and risk management. The report evaluates 27 providers, naming leaders such as Accenture and IBM, and emphasizes the shift towards outcome-based engagements and industry-specific solutions.

Positive

• Increased demand for Finance and Accounting Outsourcing (FAO) services.
• CFOs are taking strategic roles, enhancing business transformation.
• Emerging technologies being integrated into finance operations.
• Growth in partnerships with service providers for judgment-led processes.
• Focus on outcome-based engagements rather than fixed costs.

Negative

• None.

More enterprises are turning to service providers for finance and accounting functions as CFOs take on more strategic business roles, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Enterprises are seeking more third-party services and technology transformations in finance and accounting as those functions rapidly change in the wake of the COVID-19 pandemic and other disruptions, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens™ global Finance and Accounting Outsourcing (FAO) Services report finds that CFOs in many organizations are now setting strategic direction and leading business transformation initiatives as companies recognize the importance of finance in improving customer experience for competitive advantage.

“Financial data and processes have become tightly integrated with sales, marketing and procurement,” said Scott Furlong, partner, global business services, with ISG. “With the ubiquitous adoption of emerging technologies such as blockchain, IoT, intelligent automation and advance analytics, the lines between front, middle and back office are increasingly blurred.”

Furlong said companies that need to transform their business processes on a deadline are outsourcing many functions to partners that can provide “scarce and essential skills.”

ISG finds the role of outsourcers is expanding as many enterprises transform higher-level finance-related functions. Companies that have already outsourced core transactional processes, such as order to cash (O2C) and procure to pay (P2P), are now partnering with service providers on judgment-led processes such as budgeting, forecasting and risk management. Providers offer high-level professional talent for analysis of fast-changing business and economic conditions that drive this level of decision-making.

As companies seek to optimize their operations through digital transformation and cloud-based solutions, they are also outsourcing expertise in areas including predictive analytics, automation, AI, machine learning and blockchain, the report says. In addition, many enterprises are turning to providers for effective environmental, social and governance (ESG) reporting.

Organizations seeking FAO services increasingly demand ready-made solutions, crafted for specific industries, that can be deployed with little customization, ISG says. Clients also expect shorter cycles to complete RFP responses, solution designs and delivery. A growing number of companies now favor outcome-based provider engagements judged by tangible business results rather than fixed costs such as number of full-time employees.

“FAO outsourcing customers are now looking for partners with deep domain expertise that will commit to sharing the risks and rewards of transformation,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.

The report also explores other trends in FAO outsourcing, including the growing number of provider partnerships with technology specialists and ongoing provider initiatives to reskill employees to meet evolving client needs.

The 2022 ISG Provider Lens™ global Finance and Accounting Outsourcing (FAO) Services report evaluates the capabilities of 27 providers across four quadrants: Procure to Pay (P2P), Order-to-Cash (O2C), Record-to-Report (R2R) and Financial Planning and Analysis (FP&A).

The report names Accenture, Capgemini, Cognizant, EXL, Genpact, HCL, IBM, Infosys, TCS, Wipro and WNS as Leaders in all four quadrants.

In addition, Conduent is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants. Arvato and OneSource Virtual are named as Rising Stars in one quadrant each.

Customized versions of the report are available from Capgemini, EXL, Infosys and WNS.

The 2022 ISG Provider Lens™ global Finance and Accounting Outsourcing (FAO) Services report is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens™ Research 

The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage. 

A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.

About ISG

ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 800 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221107005841/en/

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com

Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What trends are emerging in Finance and Accounting Outsourcing according to the ISG report for III?

The ISG report indicates a rising demand for outsourcing, with CFOs assuming strategic roles and leveraging technology for improved finance operations.

Which companies were named leaders in the ISG Provider Lens report for FAO services?

Leaders include Accenture, Capgemini, Cognizant, EXL, Genpact, HCL, IBM, Infosys, TCS, Wipro, and WNS.

What are the key services that companies are outsourcing in finance and accounting?

Companies are outsourcing budgeting, forecasting, risk management, and expertise in predictive analytics, automation, and AI.

What is the significance of the ISG Provider Lens report for stakeholders in III?

The report provides insights into the capabilities of service providers, which can guide stakeholders in selecting appropriate outsourcing partners.

How has the role of CFOs changed according to the ISG report for III?

CFOs are now setting strategic directions and leading business transformation initiatives, highlighting finance's role in enhancing customer experience.