Purchase-to-Pay Process Outsourcing Market Will Reach $2.9 Billion by 2010

Analyst: Randle Havens

The nature of services within purchase-to-pay BPO is changing in all directions, becoming both more specialized and more capable of replacing end-to-end processes. Ongoing pressures to prove cost effectiveness are forcing accounting organizations to continually evaluate the readiness of their processes for outsourcing, and they continue to look for service providers who can support them.

NelsonHall's latest Finance & Accounting (F&A) Outsourcing study provides a comprehensive assessment of purchase-to-pay process outsourcing services globally, and makes recommendations for vendors addressing this market.

Previously,, accounting organizations had fewer options for outsourcing, but the study notes that accounting professionals are increasingly able to cherry pick from standalone services as well as replace even broader components of their end-to-end payables processes.

The study reveals a global purchase-to-pay BPO market growing at an average of 14% per annum to reach $2.9 billion by 2010. Though growth is being led by U.S.-based companies, service providers based in India continue to grow at an equal or greater pace.

The study's findings include the following:

  • The principal benefit sought through P2P outsourcing is cost reduction through labor arbitrage
  • Outsourcing of standalone elements within P2P remains relatively commonplace and is increasing
  • P2P outsourcing is delivered principally through 'lift-and-shift' of existing processes
  • While offshore delivery is dominated by India, non-Indian providers are increasing their presence, and (as in the case of IBM and HP) are adapting their strategies to mimic the Indian providers by accepting more 'foot-in-the-door' standalone deals
  • There is a trend towards shorter contract lengths
  • Pricing remains predominantly based upon full time equivalents

The study utilizes a combination of user interviews and vendor research to address topics such as accounts payable issues and challenges faced by user organizations. The report is written to assist both executives researching vendor capabilities before making purchasing decisions, and also market managers developing strategies to target segments of the purchase-to-pay BPO market.

The study 'Targeting Purchase-to-Pay Process Outsourcing' is published within NelsonHall's F&A Outsourcing subscription program, and is also available for separate purchase. For more information, contact Paul Connolly.

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