F&A Jobs Heading Overseas
Finance and accounting functions rank second only to call-center processes as candidates for offshoring, according to a report from Everest Research Institute. Every multiprocess finance and accounting outsourcing (FAO) contract signed in 2004 and 2005 contained an offshore component, notes the Dallas-based firm.
U.S.-based FAO providers are beefing up their offshore capabilities. IBM added more than 12,000 full-time equivalents to its workforce in India last year, largely to accommodate the growth of IBM Global Services. In April, EDS offered $380 million to acquire a majority stake in India-based software and outsourcing services provider MphasiS.
At the same time, the adoption curve for FAO is heading toward the vertical. According to Cambridge, Mass.-based consulting firm FAO Research Inc., 2005 saw a 40 percent increase in the number of large-contract signings over the previous year's total. Buyers of FAO services included General Electric, Kodak and Procter & Gamble.
"Growth in the FAO market is accelerating at an incredible pace that will continue through this calendar year," predicts Lisa Ross, CEO and founder of FAO Research Inc. "Our analysis shows that achieving greater cost savings, accessing better technology to facilitate global expansion and gaining industry best practices are the key motivators of companies ranging from financial services to chemical production to government and manufacturing. We predict this market will grow another 60 percent in 2006."
While the FAO marketplace remains in flux, Accenture, WNS and Capgemini have carved out leadership positions. Accenture captured 31 percent of high-dollar FAO contracts last year, according to an analysis by FAO Research.
Deltek Buys Welcom
The tally of stand-alone project portfolio management (PPM) software vendors dwindled further in March when Deltek, a vendor of enterprise management software for project-focused organizations, announced its acquisition of Welcom, a provider of earned value management (EVM) and PPM solutions. EVM, a methodology for measuring project performance by comparing work completed against work planned, is widely used among government contractors.
Steve Cook, product director and vice president for PPM with Deltek, notes that "the combination of Deltek and Welcom creates a powerhouse focused on comprehensive PPM and enterprise management solutions for project-based businesses." The deal will add more than 250 Fortune 1000 companies, including marquee names such as General Dynamics and BAE Systems, to Deltek's current base of 11,000 clients. Welcom's presence in the European, Asian and Australian markets will also create additional channels for Deltek to continue to expand its presence beyond the borders of the United States.
Web-Based Lease Management
Corporate reporting at many organizations ran aground on improper lease accounting in 2005, causing more than 200 companies to restate their financial results. In some cases, these businesses failed to follow well-established accounting rules, including FAS 13, Accounting for Leases, which dates back to 1976.
Lease management technologies can help businesses avoid this reporting pitfall. Joseph Pucciarelli, research director, pricing and leasing evaluation services, at market intelligence and advisory services provider IDC, notes that demand for this software is on an upswing. "Through 2009, IDC expects at least one-third of large, multisite, multinational companies to revise and revamp their lease management processes with a combination of process and tool initiatives," he reports.
Captara Corp., an established player in this market, has added new lease classification and reporting enhancements to its Web-based enterprise lease management offering. The new functionality, which is available to all current users as well as new customers, gives finance managers greater visibility into the accounting classification and reporting of leases in accordance with FASB rules. Users can easily apply the financial data that's needed for the FAS 13 accounting tests, including incremental borrowing rates, minimum lease payments and the economic life of leased assets.
To ensure compliance with Sarbanes-Oxley Section 404 process control requirements, the product restricts permission to change financial data and policies to authorized employees. The Captara solution also captures all balance sheet and income statement lease accounts, as well as FAS 13 footnote disclosures and Sarbanes-Oxley Section 401 contractual obligations reporting.
Coda has released a new version of Coda-Control Manager, its finance controls and process automation software. In addition to helping users manage Sarbanes-Oxley compliance, the product now also supports compliance with other legal or internally imposed regimes. Coda-Control Manager helps companies manage data entry and control over a wide range of business procedures that benefit from good auditability, including HR processes.
Coda-Control Manager's collabora-tive process management functionality enables users to automate task assignment and management; keep all participants informed and aware of the input needed and the time when it's required via a shared Web portal; and create audit trails and a document history to support compliance reporting and internal controls programs. Coda-Control Manager can be used over any ERP or general business system, such as SAP or Oracle, and in mixed environments.
BasWare Corp. is now marketing version 3.3 of BasWare Purchase Management, an electronic procurement system for midsize and large organizations. The software helps companies cut the cost of operational and indirect purchases, including IT supplies, marketing materials and contracted services. New features include enhanced catalog capabilities that expedite requisitions and improved review and approval functions.
An unusual feature of the offering is that it comes bundled with a set of business consultancy services designed to ensure that it integrates seamlessly and efficiently with the user's purchase-to-pay infrastructure.
"We believe this combined software and consulting approach is the first of its kind in the purchase management field," reports Esa Tihila, general manager, Europe and Americas. "We have developed this to help organizations manage the migration from a manual to an electronic procurement system and to maximize potential purchasing efficiencies and cost savings."
In addition, BasWare Corp. offers the application under a shared-risk pricing structure. "Under pre-agreed terms, customers will pay for software licenses on a sliding scale," reports Tihila. "Pricing will be set on a ratio of savings made against savings guaranteed. These will be worked out with our business consultants."
BasWare Corp.: www.basware.com/us
On-Demand Business Application Suite
When it comes to major enterprise systems, many large organizations have moved from collections of specialized applications to integrated software suites in the last few years. But the picture at the midmarket level remains more fragmented; typically, midsize companies rely on an assortment of integration methods to link a patchwork of best-of-breed systems.
NetSuite Inc. is aiming to change that with the release of version 11.0 of NetSuite, its Web-native integrated business software offering for midsize companies. The product offers a single platform for CRM, ERP and e-commerce in a software-as-a-service (SaaS) model. NetSuite version 11 automates key business functions across a range of departments, including sales, marketing, finance, purchasing and employee management.
New functionality includes SuiteScript, which provides flexible business process customization. SuiteScript lets customers link events such as new records or changes to records with NetSuite objects or activities via application programmer interfaces. Companies can use SuiteScript, for example, to build a marketing process that automatically acknowledges new orders via e-mail and sends follow-up messages. Users can also build procedures to enforce quote discount approvals and to customize order fulfillment and collections-escalation processes.
NetSuite Inc.: www.netsuite.com