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TOP ENTERPRISE PROVIDERS
The Lucky By FAO Today Staff 13
Aided by a healthy market, the list of enterprise FAO service providers continues to grow. We look at a baker’s dozen of the leading global providers helping to make outsourcing a positive experience.
Their numbers are growing, thanks to a FAO riches. And because so many of these ing a big bucket of services, from transac- very robust FAO market that some analysts BPO providers have a rich, established IT tion-heavy processes such as accounts say is expanding by 30 percent a year. heritage, they come well-backed by their payable and accounts receivable to more That’s why many providers are attracted to parent companies. strategic functions such as consolidation the segment—all hoping to sell their expert- In the end, we settled on some familiar and general ledger work. Another edge: ise to hungry buyers. names that almost always appear at the top strong leadership helping to guide their way So when we set out to choose this list of of buyers’ RFP list, as well as upstarts who in this still-maturing market. If they can top enterprise providers, it was apparent are showing they can close on deals. Most further elevate customer satisfaction, these that it would be a difficult task. After all, the likely, if you have been around the industry, companies will continue to stay on our list. market is still divided into traditional you’ll recognize the names on our baker’s In compiling our list, we’d like to thank Western Hemisphere-based providers such dozen of enterprise FAO providers. three highly knowledgeable consultants in as Accenture, Capgemini, and IBM in solid What’s their secret to success? In every the industry—Bob Cecil of EquaTerra, Lisa market leadership positions. On the other instance, being able to deliver on a global Ross of FAO Research, and Katrina hand, an entire new generation of offshore basis with service centers in key markets Menzigian of Everest Research—for their vendors such as Genpact, OPI, and WNS has given these providers an important cost valuable insights and help with our final appear ready to jostle for their share of the advantage. Furthermore, they are deliver- selection.
Company URL
Accenture www.accenture.com
A global brand, Accenture is one of the top end-to-end FAO providers in the market. According to Everest Research, the provider has about 11 per- cent of the North American supplier market share and a 20-percent global share. Also a provider of outsourced HR services, Accenture’s business in FAO is divided into two lines: enterprise services delivered by Accenture Finance Solutions and mid-market services delivered by Accenture BPO Services (formerly Savista). While its enterprise FAO business has delivered standalone deals, BPO Services engages most of its client in bundled solu- tions that encompass both HR and F&A. Servicing clients around the world, the company has delivery centers located in most major markets, includ- ing China, Czech Republic, Italy, India, Poland, the Philippines, Romania, Slovakia, the U.K., and Houston, TX. Last year, it named Mike Salvino the head of its finance BPO business.
Recent Deals: Crestline Hotels & Resorts (Accenture BPO Services); Microsoft Europe; and National Australia BankQuality
Client(s): BP North America, Delta Air Lines, Exel PLC, Rhodia, Talisman Energy U.K., Thomas Cook U.K., Microsoft, National Australia Bank, and Wyeth among enterprise clients
Services: Procure-to-pay; order-to-cash; assets acquire-to-retire; cash and banking; document management; finance application management; profit recovery and analytics; income statement; cash flow and balance sheet optimization; business analytics; performance management; finance strat- egy and organization design; finance skills and competency; and finance change management
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TOP ENTERPRISE PROVIDERS
Company URL
ACS, Inc. www.acs-inc.com
Another multi-domain global outsourcing provider, Dallas-based ACS is also considered a Tier 1 service provider offering a range of end-to-end serv- ices. With 2006 sales of more than $5 billion and more than 4,000 employees engaged in FAO, the company can provide a host of services spanning F&A, HR, and IT. Offering proprietary technology and employing strategic business units dedicated for each client, ACS recently has more aggres- sively sought after business through point-solution engagements that it hopes will lead to a broadening of their contracts. In the large-buy global mar- ket, Everest Research estimates that the company has about an eight-percent market share. Delivery centers are located in Brazil, the U.K., Guatemala, India, Jamaica, Mexico, the Philippines, Poland, and Spain. The company is currently considering a nearly $6 billion offer by its chair- man and Cerberus to take ACS private. This follows unsuccessful discussion of a takeover of ACS last year by a consortium that included the Blackstone Group.
Recent Deals: American Standard, United Technologies
Client(s): General Electric, General Motors, MetLife, Metromedia Restaurant Group (MRG), Motorola, Office Depot, and United Technologies
Services: Accounts payable, accounts receivable, billing, general accounting, tax management, treasury and risk management, credit and debit card processing, check processing, clearinghouse services, loan origination, loan servicing, and other finance tasks
Capgemini www.capgemini.com
Paris, France-based Capgemini is in the same class of top-tier providers as Accenture, IBM, and ACS. With about 3,500 employees serving the FAO market, it evenly divides its revenues in this segment among the three major geographic regions: 35 percent each in North America and Asia and 30 percent in EMEA. With a majority of its business in the manufacturing and retail sector, the company also has a number of clients in the energy and utilities sector and financial services. To differentiate its services, the company promotes a RightShore service delivery strategies, offering clients a choice from where their services will come. Facilities are located in Australia, Canada, Hong Kong, India, Poland, and the U.S. Last year, the com- pany acquired a majority stake in Unilever’s F&A business, Indigo, which added about 6,000 employees to its operations in India. Also in 2006, the company opened a third service center in Kolkata, India.
Recent Deals: Tetra Pak, SKF, Hindustan Lever Limited (Unilever), and Zurich Financial Services
Client(s): Blue Scope Steel,Dairy Farm, Danfoss, Hydro One, International Paper, Syngenta, TXU, Zurich Financial Services, SKF, and Tetra Pak
Services: General ledger, accounts payable, accounts receivable, cash and asset management, planning and budgeting, management reporting, finan- cial analysis, payroll, order management, tax, and compliance services
EXL Service www.exlservice.com
This Indian pure-play BPO provider is a surging new competitor to the BPO space. Like other offshore firms, the company’s strongest offering is the labor arbitrage from its seven service centers in India. With more than five years of experience in FAO, the NASDAQ-traded company has extensive experience with various F&A processes and supporting versatile imaging and document management requirements for clients. Last year, the com- pany acquired Inductis, a strategy and analytics company serving the financial services and insurance industries, for an undisclosed amount. Now a wholly owned and independent subsidiary of EXL, the analytics services provider caters to clients in India, the U.S., and Singapore.
Recent Deals: N/A
Client(s): Norwich Union, Prudential Financial
Services: Procure-to-pay, bill-to-cash, payroll, general accounting, financial closing, research and reconciliation, cash management and treasury, compliance support MIS and decision, Sarbanes-Oxley compliance, internal audit, technology risk solutions, and risk services.
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TOP ENTERPRISE PROVIDERS
Company URL
Genpact www.genpact.com
In the midst of issuing its IPO, this former shared-services unit of GE could be looking at a huge market cap when shares finally roll out (it filed its registration on May 11). Of all the India-based FAO service providers, Genpact may be the most polished thanks to its GE heritage. Since 2006, the company has signed on a number of brand-name clients and sharpened its image since changing its name from GECIS, a holdover from its spin- off from GE. Owned by GE (a minority stake) and General Atlantic and Oak Hill Capital Partners, Genpact recently announced that it was acquir- ing Axis Risk Consulting Services Pvt. Ltd, an independent India-based risk consulting firm that provides a wide range of risk assurance services, including internal audit, business performance improvement, Sarbanes-Oxley documentation and compliance testing, and enterprise risk man- agement. In 2005, the company entered into a unique outsourcing arrangement with Wachovia in which the scope of service was not determined until after the deal was signed.
Recent Deals: Hercules, Kimberly-Clark, and GlaxoSmithKline
Client(s): Wachovia, Linde Group, Hercules, Kimberly-Clark, and GlaxoSmithKline
Services: Accounts payable, T&E, accounts receivable including order management and invoice-to-cash, general accounting, fixed assets, payroll, management reporting and analysis, budgeting/forecasting, and internal audit. In addition, the company has a knowledge process outsourcing unit that supports its clients.
HP www.hp.com
With plans to aggressively grow headcount at its BPO unit from 6,500 to 7,800, HP is hoping to increase its share of the global enterprise FAO market (Everest estimates that it has just four percent). As is the case with many FAO providers, HP has strong IT roots supporting its BPO operations. As the biggest technology company in the world, HP’s FAO unit is just a small part of the overall business. Nevertheless, the company has plans to quickly grow the business. In addition, it recently expanded its F&A contract with Nestlé into the HRO domain by taking on payroll and other services. As a global provider, HP has delivery centers in China, Costa Rica, India, Mexico, Poland, Romania, Singapore, and Spain.
Recent Deals: Nestlé
Client(s): Procter & Gamble, Nestlé, the Gillette Company.
Services: Vendor data maintenance, procurement services, accounts payable, T&E accounting, accounts receivable, general accounting, fixed asset accounting, treasury accounting, management and financial reporting, and advanced analytics.
IBM www.ibm.com
The market leader in FAO, Big Blue commands a 22-percent share of global enterprise deals, according to Everest. In North America, its lead is com- manding with a 35-percent share. However, in both segments, IBM has seen its share eroded by new entrants to the market as well as greater com- petition from existing suppliers. One of the strengths of IBM as an FAO provider is a large global footprint that boasts more delivery centers than anyone else in this market segment. Facilities are located in Argentina, Canada, China, Hungary, India, Ireland, Malaysia, the Netherlands, the Philippines, Poland, Portugal, Slovakia, and the U.S. It employs some 5,000 in its FAO practice. Last year, the company announced plans to acquire Delft, Netherlands-based Consul, a software company. This acquisition builds on IBM’s service management initiative by adding key data governance and compliance monitoring and auditing and reporting capabilities across mainframe and distributed environments. Other key past acquisitions include a 2005 purchase of Equitant, an order-to-cash service provider.
Recent Deals: Unilever, Colgate Palmolive
Client(s): Omron Corp., Eastman Kodak, Unilever, NiSource, BP, Marathon Oil, Williams, Lam Research, Dun & Bradstreet
Services: Transactional processes (accounts payable and T&E, accounts receivable, general accounting, fixed assets, payroll, and tax) and value-added processes (management reporting and analysis and internal audit).
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TOP ENTERPRISE PROVIDERS
Company URL
Infosys BPO www.infosys.com/bpo
Infosys BPO (formerly Progeon) was started as the business outsourcing subsidiary of Infosys Technologies in 2002. Today, the company said it has moved more than 500 processes from client locations across various industries. With service centers in India, the Czech Republic, China, and the Philippines (through a partner), the company is focused on engaging clients in end-to-end services rather than voice-based services. It employs about 3,000 workers in the FAO business and caters to mostly the high-tech and telecom sectors. Some of its clients include a U.S. media conglomerate, an oil and gas company, a software reseller, and others. Additional outsourced services provided by Infosys BPO include procurement, knowledge process outsourcing, and order management.
Recent Deals: N/A
Client(s): N/A
Services: Accounts payable, accounts receivable, collections and credit management, billing and invoicing, fixed assets, intercompany accounting, general ledger, finance planning and analysis
Outsource www.opiglobal.com Partners International
An up-and-coming provider with a strong offshore component, OPI has the advantag of being a low-cost FAO service provider that comes from a big accounting firm lineage. The company was born out of KPMG LLP’s Business Process Outsourcing (BPO) division and itAccounts, a finance and account- ing business process outsourcing company. Even though OPI was formed in 2002 when the two companies merged, KPMG’s BPO group began in the outsourcing space in 1997. The merger with itAccounts then added an established offshore F&A outsourcing facility in Bangalore, India. Although it services multibillion-dollar clients, OPI has mostly a mid-market bent, catering to businesses as small as $100 million in revenues. It also straddles many verticals, including service, manufacturing, financial services, technology/telecommunications, energy, logistics/transportation, hotel/restau- rant, retail, and nonprofit. Privately held, OPI’s investors include Cargill Ventures, Trident Capital, and Winston LP.
Recent Deals: N/A
Client(s): Service Corp. International, Trinity Industries, and Mirant Corporation
Services: Order-to-cash, purchase-to-payment, hire-to-retire, general accounting, consolidation and management reporting, intercompany allocations, activity-based costing, reconciliations, project accounting, tax compliance, compliance and control, cash management, research services, cash dis- bursement, FAS 123R stock option accounting, tax compliance services, and contract management.
Tata Consultancy Services www.tcs.com
With a heritage stemming from its IT roots, this India-based provider serves numerous industries including banking and financial services, retail and con- sumer goods, telecom and media, energy and utilities, travel and hospitality, insurance, life sciences and healthcare, government, and manufacturing. Unlike other IT and BPO providers, TCS also provides engineering and industrial services, so its focus is broader. But with revenues of $4.3 billion, TCS is considerably larger than other narrowly focused providers to this segment, and its strategy includes bundling IT and BPO services together for its glob- al clients, most of whom are in the financial services sector.
Recent Deals: Saudi Telecom and Pearl Insurance
Client(s): Saudi Telecom and Pearl Insurance
Services: Securities back-office processing,statistical analysis, third-party administration (life and pensions), customer analytics, accounts receiv- able, fixed asset accounting, financial planning and analysis, payroll processing, customer interaction center, credit card operations, claims administration, revenue assurance, revenue management, accounts payable, general ledger accounting, and passenger and cargo revenue account- ing and fare audit.
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TOP ENTERPRISE PROVIDERS
Company URL
Wipro BPO www.wipro.com A highly recognized offshored provider of IT services, the company’s BPO services business benefits from its parent company’s technological strength. Key to the BPO offering are three components—business process reengineering, technology integration, and knowledge services. With 17,000 employ- ees in nine locations throughout India and Eastern Europe, the company serves the banking and capital, insurance, travel and hospitality, technology manufacturing, telecom, and healthcare sectors. Its offerings include F&A, procurement, HR , loyalty, and knowledge services. Wipro has quickly gained momentum in the BPO space, considering it only entered the market in 2002 with the acquisition of Spectramind.
Recent Deals: N/A
Client(s): Delta Airlines
Services: Order-to-cash (credit management, order management, invoicing, collections, helpdesk, dispute resolution, and banking and cash application); procure-to-pay (purchase order validation, invoice verification, accounts payable, vendor payments, employee T&E, vendor management, reconciliation); plan-to-result (fixed asset accounting, project accounting, general ledger, ledger and balance sheet reconciliations, and cash flow forecasts); compliance reporting (SOX, GAAP, and VAT requirements); and financial analysis and management (analysis, expense monitoring against budget, tax compliance and planning, internal audit, and risk management).
WNS www.wnsgs.com
The offspring of British Airways, WNS, which was initially set up as a captive, is now traded on the New York Stock Exchange as a provider of FAO services to a customer base that has diversified from a base of mostly airline clients to a diversified group spanning numerous industries. Shares began trading on NYSE last year following a successful IPO, and during the past four years, the company has grown to a client base of 125 and an employ- ee base of 12,000 during a four-year period. Revenues have also ballooned to $202 million. Its successful market debut may have inspired other providers in the FAO space to follow down the space. Shortly after, WNS’ IPOoffshore provider EXL Service began trading on the NASDAQ, and Genpact recent- ly filed its public registration. Since its early days as a one-vertical-trick pony, the company has now captured clients in other industries such as man- ufacturing and retail, financial services, and others. Last year, it signed a notable contract with Church’s Chicken to provide all of its finance and accounting processes for restaurants it owns throughout the world, including locations in 16 countries and Puerto Rico.
Recent Deals: Church’s Chicken, Centrica
Client(s): Aviva, British Airways, Centrica, Tesco, Travelocity
Services: Purchase-to-pay cycle, order-to-cash cycle, account-to-report, banking and treasury cycle, fixed assets cycle, general accounting cycle, and management reporting cycle.
XANSA www.xansa.com
Although it’s mostly a U.K.-based provider, Xansa has a significant presence in the world’s second largest outsourcing market. Having entered the BPO business in 2001, the company is a major provider of FAO services to both the private and public sectors. In 2005, the company entered into a joint venture with the U.K. government’s NHS, the largest healthcare provider in the country, to provide outsourced F&A and HR services to NHS organizations such as member hospitals. It caters to clients in industries such as banking, insurance, the public sector, retail, telecoms, transport, travel and logistics, and utilities. In 2006,sales were £357 million, and it employed 8,000.
Recent Deals: The BBC
Client(s): BT, MyTravel, NHS Shared Business, the BBC
Services: Finance, accounting, payroll, energy management, credit and debit card processing, disputes/chargebacks, applications processing, excep- tion handling, billing, financial reconciliation, supplier invoice management, reporting, and analytics.
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