Stan Lepeak, Managing Director, Global Research

Results from the recently released inaugural edition of EquaTerra’s global FAO service provider performance and satisfaction (SPPS) study reflect very positively on the finance and accounting outsourcing (FAO) marketplace. While this is good news for users and providers of FAO services, what is of more interest is the “why” behind the results. What are the characteristics and attributes of the buyers, the deals and the service providers that are having the most FAO success?

Buyers’ sourcing management capabilities proved a strong contributing factor to FAO satisfaction. There was also a direct correlation between deal age and buyer satisfaction, highlighting that direct, hands-on experience and learnings are important to deal satisfaction and FAO efforts, just as fine wine and good marriages (usually) improve with age.

Another contributing factor to FAO success and satisfaction is the type of sourcing model employed. Study respondents characterized their FAO efforts along a four level sourcing dimension, ranging from all services delivered locally or onshore through nearshore and then offshore, with an additional response option for a combination of nearshore and offshore provisioning.

When asked to what degree the original drivers for FAO have been realized, 24 percent of respondents with FAO services delivered domestically (local or onshore) were significantly positive and 56 percent moderately positive (see figure below.)  While these scores speak well to the success of FAO efforts meeting original drivers, the numbers were even better for respondents using offshore FAO service delivery resources (41 percent significantly positive and 38 percent moderately positive) and for those using a combination of near and offshore (33 and 53 percent, respectively). The highest scores were for those using only nearshore resources, though that sample was somewhat small, representing just five percent of overall study respondents.

Results were similar when it comes to satisfaction with FAO service providers. Buyers using a combination of near and offshore services delivery gave their providers an average score of 78 percent, slightly above the overall study average of 75 percent. Buyers using just offshore provisioning gave their providers an average satisfaction score of 72 percent, and those using only onshore delivery gave an average score of 69 percent. While these scores did vary among service providers covered in the study, highlighting that some do a better job than others at global FAO services provisioning, the results reinforce the maturity and quality of global FAO services in the market today.

Filed under: Finance & Accounting, Market Trends and News, Outsourcing by EquaTerra