Growth of BPO Will Lead to Convergence of Human Resources and Finance & Accounting Services, IDC Pre

The growing interest in outsourcing, especially business process outsourcing (BPO), is putting new demands on organizations processes and technologies. As a result, new people are taking responsibility for purchase decisions and applying new selection criteria. This is driving vendors to redesign their solutions to compete for these contracts. According to a new study published by IDC, this evolution is most pronounced in the human resources (HR) and finance and accounting (F&A) services markets, contributing to their convergence. Among the key findings presented in IDCs new report are the following: -- Organizations are demanding greater integration of HR and financial data. This is driven by the need for cost savings and efficiency and by the desire for more rigorous financial management of business processes. -- More HR BPO service providers are expanding into F&A transaction processing, while many F&A and IT service providers are entering HR outsourcing. The infrastructure and service delivery requirements for HR, payroll, and benefits administration outsourcing are similar to those required for accounts payable and accounts receivable outsourcing, allowing for this shift in competitors. At the same time, many financial and HR consulting firms are focusing on the creation of financial measurement tools to measure and align HR with corporate goals. To be successful in this converging marketplace, IDC believes financial and HR management and consulting firms must begin to look at how to expand their product and service offerings where HR and F&A intersect. In doing so, however, vendors need to remain aware of where they are in the learning curve in building and delivering these solutions as compared with buyers and not get too far ahead of the current needs of the market. In addition, outsourcing service providers should explore developing internal strengths and expertise in performance management systems and HR scorecarding capabilities. This IDC study, The Convergence of HR and F&A Services: How the Emerging Trends in Buyer Needs and New Services Will Impact Competition and the Services Delivered, explores the trends occurring within HR services and F&A services, including the evolving needs of buyers and recent moves of competitors. Predictions are made for the impact of these trends on the future market for services in HR and F&A and for the impending convergence of these markets. Finally, recommendations are made for service providers in order to align best with these unfolding dynamics.