Accenture said the deal, which began in March 2007, brings together several business processes that Microsoft had previously outsourced among several different vendors. On the F&A side, Accenture is now handling accounts payable and travel and expense services, plus some of what Accenture calls record-to-report functions including fixed assets, general ledger, and treasury and statutory reporting. Procurement services covered under the contract include category management and order processing.
The deal underscores what has been a growing convergence between the procurement and F&A outsourcing markets. Basic functions such as accounts payable, order processing, and travel/expense have always blurred the line between these two worlds, and now providers are eager to grab both procurement and F&A work from their clients.
While not all F&A vendors have the capabilities to take on full-scale procurement work, such as category management and a lot of the process consulting that the major procurement deals often include, there has been a definite move from vendors, including the Indian offshorers, to enter through the accounts payable door and grab more transactional procurement work. Procurement work under a deal like this one with Microsoft, however, is more the domain of the big procurement specialists in the market, namely Accenture, IBM, ICG Commerce, and Ariba.
Beside covering a number of services, the Microsoft contract is truly global, including operations in 92 countries outside the US, in 36 languages. Accenture said it is already up and running in 30% of these places. Anoop Sagoo, European sales lead for Accenture’s finance solutions group, said the services will likewise be delivered from Accenture centers around the world.
Microsoft is a very global company said Sagoo. If you consider the scope of the deal, you’ll see the need for Microsoft to be operating in a standard way across their markets, having geographic controls in place, and industrializing their processes.
Microsoft was already a large Accenture customer. On the BPO front, Accenture provides credit and collection services for the company’s operations in Europe, the Middle East and Africa, for example.
While many companies are clearly consolidating their outsourcing work to a large provider such as Accenture, the multisourcing route is still popular. Accenture just this month took on a portion of BT’s F&A work with a five-and-a-year contract for high-end accounting functions such as management reporting, financial planning and analysis, month-end close activities, and budgeting/forecasting. This was less than a week after BT outsourced the more basic F&A services, such as transaction processing, ledger, payroll, accounts payable, cash, treasury, and ledger, to Xansa, as part of a six-year, 128m-pound ($257m) award.
Accenture is enjoying the best of both worlds, continuing to pick up bundled deals and plucking select contracts, such as the BT win, with some of its higher-end BPO work.
