STAMFORD, Conn.--(BUSINESS WIRE)--Chief financial officers around the globe are looking for more transparency and visibility into their companies’ financial operations, and are turning to providers of digital finance and accounting services to help them achieve those goals, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2021 ISG Provider Lens™ Digital Finance and Accounting Outsourcing Services Global Report finds CFOs seeking new information about the areas affecting working capital and cash flow, especially during the difficult business climate caused by the COVID-19 pandemic.
Enterprise finance leaders are focusing on digital transformation efforts to “future-proof” their finance functions, said Scott Furlong, partner, business operations, for ISG.
“Companies need to remain competitive, agile, resilient and effective in delivering value to customers and business partners during and after the pandemic,” he said. “However, inadequate knowledge and skills often derail this journey, driving enterprises to seek providers to reimagine their finance operations.”
In most cases, CFOs seeking help from digital finance and accounting service providers want to strategically use automation, advanced analytics and AI to reduce costs, improve accuracy, ensure compliance, maintain cash flow, increase workforce productivity and enhance customer experiences, the report says. Analytics, now a key part of almost every finance and accounting outsourcing deal, can help CFOs make quicker decisions and predict future events.
However, poor identification of use cases has sometimes prevented enterprises from realizing a return on investment from finance automation, the report adds. To gain the benefits of automation, finance processes must be assessed through multiple lenses with the help of process and task-mining technologies, the report recommends.
In the past year, the pandemic forced enterprise finance teams to operate in remote work environments, the report notes. Enterprise finance operations will look for help with a hybrid work model going forward, in which some team members work from the office at least part of the time, while others continue to work from home. Cybersecurity and regulatory compliance assistance from service providers will be important in this new hybrid work model.
Many FAO providers have proven their capabilities after enterprises outsourced transactional finance processes such as procure-to-pay and order-to-cash, the report says. Enterprises are now outsourcing high-end and judgement-intensive finance and accounting processes such as budgeting, forecasting, management reporting and analysis. These processes, which were typically retained in house in the past, are being outsourced to give the CFO better data and actionable insights.
In addition, as many companies begin to explore opportunities to outsource functions like taxes, financial planning and analysis, they are looking to service providers with onshore or nearshore capabilities, the report says. Enterprises want providers with skilled workforces that have strong domain expertise and a sound understanding of local tax norms and regulations.
The report also sees new deals between enterprises and service providers are based on business-outcome-based service level agreements rather than traditional input-based SLAs. Many CFOs want to move from a fixed-cost structure to a variable cost structure.
The 2021 ISG Provider Lens™ Digital Finance and Accounting Outsourcing Services Global Report evaluates the capabilities of 28 providers across four quadrants: Procure-to-Pay Services, Order-to-Cash Services, Record-to-Report Services and Financial Planning and Analysis Services.
The report names Accenture, Capgemini, Cognizant, EXL, Genpact, IBM, Infosys, TCS and Wipro as Leaders in all four quadrants. WNS is named a Leader in three quadrants, and HCL is named a Leader in two.
In addition, Hexaware was named a Rising Star—companies with “promising portfolios” and “high future potential” by ISG’s definition—in two quadrants. Conduent, HCL, Tech Mahindra and WNS were named Rising Stars in one quadrant.
The 2021 ISG Provider Lens™ Digital Finance and Accounting Outsourcing Services Global 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., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, 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.
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 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.