RYE, N.Y., Dec. 9, 2005 (PRIMEZONE) -- The consortia buying of Finance and Accounting outsourcing services is about to explode worldwide, as many multinationals team up with industry rivals to form buying consortia, according to research conducted by Vales Consulting and Tinervin Advisors. In their December 2005 forecast, Joseph Vales and Richard Tinervin predict that 25% of Finance and Accounting outsourcing contracts over $50 million will be consortia driven by 2010.
"Our global forecast was based on our original research on global outsourcing trends over the past two years," said Joseph Vales, Senior Partner of the Vales Consulting Group. "Over this period, we have published three white papers tracking the coming wave of consortia buying in Business Process Outsourcing, Asset Management, and Finance and Accounting. We see Global 2000 companies coming together to form buying consortia with the combined purchasing power to negotiate cost savings of much as 30% to 40% annually for Finance and Accounting services."
Consortia buying is not a new phenomena according to Richard Tinervin, Founder and Managing Director, Tinervin Advisors. "The market movement to consortia buying has been driven by the long term convergence of eight key transformational forces impacting the outsourcing marketplace: the impact of globalization, the growing focus of CFOs on strategy, the movement to vertical industry solutions, the power of standardization, the consolidation of suppliers, the acceptance of the business process utility, and the rise of co-opetition!"
The authors believe that the coming wave of consortia buying in Finance and Accounting will be driven by those eight transformational forces as well as new governmental regulations and emerging market developments. In their December 2005 forecast, the authors analyze these disruptive forces and make the following predictions:
Risk Management. While most Finance and Accounting outsourcing focuses on transaction processing, the authors believe that it will now expand into the highly visible and critical risk management area as well. By forming buying consortia companies will have the opportunity to share best practices which will result in more effective governance and risk management.
Financial Services. Consortia buying of F & A services will take center stage in the financial services industry. The players will include global banks, trust companies, securities firms, investment firms, insurance companies, and other asset managers.
Offshoring Opportunities. As offshore service providers build their infrastructures and world-class capabilities corporate buyers will form consortia to develop common solutions to reduce the risk of offshore transactions processing.
Vales Consulting Group (www.valesconsulting.com) can be reached via telephone at 1-914-967-3200 or via email at JVales@valesconsulting.com. Tinervin Advisors can be reached via telephone at 1-843-342-3985 or via email at RRPTinervin@aol.com