Introduction

The Finance & Accounting (F&A) and Procurement functions comprise three end-to-end processes – Record-to-Report (R2R), Order-to-Cash (O2C), and Source-to-Pay (S2P). This report focuses on the third-party outsourcing of P2P activities – the downstream process within S2P.

With increasing maturity of the FAO and PO markets, FAO contracts are expanding upstream beyond Accounts Payable (AP), while PO contracts are expanding downstream beyond Source-to-Contract (S2C) to include broader scope of P2P activities. This is resulting in increased convergence between the FAO and PO markets. Such an end-to-end process-driven approach to outsourcing, as opposed to the existing piecemeal and functional approach, is unlocking more value creation opportunities.

In this study, we investigate the market state of P2P outsourcing. We focus on:

• Definition, value proposition, and challenges of P2P outsourcing
• P2P outsourcing market size and growth
• Emerging and current solution trends
• P2P service provider landscape

Scope of analysis

• The scope of this study is third-party outsourcing and does not include internal shared services
• The study provides global and cross-industry coverage of P2P outsourcing
• The study is based on Everest Group’s proprietary database of over 1,000 FAO contracts and over 300 PO contracts signed till the end of 2011, and operational capability of over 25 service providers who offer P2P services

Content

This report analyzes the key trends in P2P outsourcing within the FAO and PO market. It provides an understanding of the business value, adoption trends, solution characteristics, and service provider capability in P2P outsourcing.

Some of the findings in this report are:

• The P2P process, typically, accounts for nearly a third of the overall cost of F&A and procurement operations
• FAO contracts tend to focus on AP, whereas PO contracts focus on day-to-day purchasing activities within P2P
• India has emerged as the main offshore hub for P2P delivery. However, an onshore-nearshore-offshore blend is now emerging
• Technology is playing an increasingly important role in P2P outsourcing. Beyond add-on tools, several platform-based / BPaaS solutions are emerging
• There are three emerging themes of service provider investments related to P2P outsourcing:
  • BPaaS- / platform-based solutions
  • Analytics
  • Expansion from P2P to broader S2P capabilities