Magic Quadrant for Finance and Accounting BPO
This Magic Quadrant evaluates vendor capabilities in the comprehensive F&A business process outsourcing market among 17 providers. Use this Magic Quadrant to help identify and evaluate the right providers to support your organization.
This document was revised on 17 June 2013. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.
Comprehensive finance and accounting (F&A) business process outsourcing (BPO) consists of support for multiple business processes in the F&A domain through a single BPO contract. It typically includes three or more subprocesses associated with F&A from the following categories:
- Accounts payable
- Accounts receivable
- General ledger
- Financial reporting
- Treasury and cash management
- Specialist processes, including yield management, shareholder accounting and risk analytics
Source: Gartner (May 2013)
Gartner estimates that overall BPO accounts for 14% of Accenture's revenue. In 1991, Accenture began providing F&A BPO, which is one of its larger BPO services. It employs approximately 14,500 full-time equivalents (FTEs) in F&A BPO. It operates more than 50 centers for F&A BPO in locations including North America, Argentina, Western Europe (the U.K., Ireland, Spain, Norway and Italy), Central and Eastern Europe (Prague, Bratislava, Bucharest, Warsaw and Romania), India (Bangalore, Chennai and Delhi), Mauritius, South Africa, China (Shanghai, Chengdu and Dalian), and the Philippines. Accenture retains its position in the Leaders quadrant in the 2013 Magic Quadrant due to its wide range of processes delivered on a global scale and its ability to minimize delivery issues with expected attrition.
- Accenture offers a highly scaled, well-balanced service offering covering a good range of F&A BPO services, which it supports across more than 120 countries; this makes it one of the largest providers in F&A BPO.
- Accenture has garnered strong experience in offshore delivery. Accenture's attrition is relatively low, and clients cited the company's polished transition methodology.
- Strong vertical capabilities for F&A BPO, especially in the consumer packaged goods, financial services and telecommunications sectors, derived from the volume of strategic clients it has in these sectors.
- Accenture has developed an integrated approach between consulting, technology and BPO, which it calls Integrated Business Services and which drives its use of analytics and business-outcome-based deals.
- Clients observed lack of speed and complexity in financial negotiations, as Accenture manages its own risk on deals.
- Clients cited that Accenture can be more costly to hire than its competition; clients need to understand whether or not Accenture's consultants should be introduced into the scope of the F&A BPO deal.
- Accenture could make further investments in technology applications related to the provisioning of F&A BPO. Compared with some other players in the market, Accenture has fewer choices of in-house versus externally sourced process enhancement technologies and services.
- For government clients considering Accenture for F&A BPO, it has minimal experience in the public sector for F&A BPO.
Part of the Bertelsmann Group, arvato delivers multiple types of BPO, and it has specifically been offering F&A BPO since 2003. It has more than 6,800 delivery staff for F&A BPO across 40 delivery locations in Ireland, Spain, Germany, Peru, the U.K., the Philippines, Singapore and the U.S. arvato has just acquired Gothia Financial Group, a leading European provider of integrated financial services. The acquisition is expected to advance the internationalization of arvato's financial services activities and broaden its delivery capabilities in the areas of business information, payment handling solutions and liabilities management. Given its strong specialist offerings in executing order-to-cash processes, especially for electronic commerce, and its focus on the U.K. public sector, as well as its relative scale and range of F&A BPO operations, arvato has moved from a Challenger to a Visionary in this Magic Quadrant.
- Gartner has observed that arvato has built up experience in the servicing of e-commerce organizations for order-to-cash services, especially and notably in digital payment platforms. This is demonstrated by a strong ability to deliver global services for these activities, including hard-to-service regions, such as Russia and China (in part based on its experience with parent company Bertelsmann). It has also built up experience in services such as risk management.
- Strengths cited by clients include arvato's flexibility in standard processes, which support finance transactions and transparency of service offerings.
- The company has demonstrated a strong commitment to grow and invest in F&A BPO, such as arvato's investment in onshore services for the U.K. public sector: It was recently awarded a central government contract at the Department for Transport. In addition, it is expanding with F&A BPO clients also in Spain and Germany.
- In addition to the U.K. public sector, the industries in which arvato's experience is strongest are communications, high tech and manufacturing.
- While its sales force is currently adept at driving overall revenue growth, it could improve its accounts executives' ability to communicate an aggregated and clear view of arvato's vision, an impediment cited by several reference accounts.
- Only recently has arvato begun building standard process templates and cloud-based offerings. While these investments show promise, they have yet to be deployed in existing client solutions.
- Additionally, relative to its competitive peer set, arvato has less experience in managing unstructured processes, and it also needs to make greater investments in consulting skills, record-to-report capabilities and high-end finance processing.
- Only recently has arvato begun to build up its global footprint for F&A BPO sales and delivery — it is worth noting that while arvato is present in India, it currently has no Indian F&A BPO delivery, and most F&A BPO buyers typically do look for some level of offshore resources to round out service capability, which leaves it challenged in competitive bid situations.
BPO is a strategic business unit for Capgemini, generating 5% of its total revenue. Capgemini started selling F&A BPO in 1996 and has evolved its business organically and through strategic acquisitions. With approximately 9,000 FTEs in F&A BPO, it has a diverse base of BPO delivery centers internationally; today it operates from 27 centers based in nine countries, including India (Bangalore, Chennai, Kolkata, Mumbai and Gurgaon), Poland (Krakow and Katowice), China, Brazil (Blumenau and Campinas), Chile, Guatemala, Australia, Canada and the U.S. In 2011, it acquired Vengroff, Williams & Associates (VWA), which added collection services and technologies to its portfolio. In 2010, it acquired IBX for its procurement platform, which strengthened its end-to-end source-to-pay offerings, and it acquired Strategic Systems Solutions for BPO work in capital markets, especially in Asia/Pacific. Capgemini remains positioned in the Leaders quadrant because of its strong vision in BPO F&A that it is executing on.
- Capgemini has a good spread of F&A process activities across its delivery locations. It is well-integrated across sites to deliver a view back to clients of both contract performance metrics and their financial performance.
- Clients praised Capgemini's deep industry knowledge, flexible customer orientation, commitment to client relationships and good service delivery.
- Clients in the consumer packaged goods, manufacturing, utilities, media and financial services industries contribute the largest portion of Capgemini's F&A BPO revenue.
- Capgemini has invested in several process enhancement technologies and services, including the WebCollect collections tool as part of its VWA acquisition and IBX, an application that supports source to pay.
- Capgemini's BPO division could do more to leverage the consulting and IT outsourcing (ITO) capabilities of Capgemini that could strengthen its F&A BPO services. This is especially relevant in accounts in which Capgemini is the system integrator for the ERP system. It does need to focus even more on delivering continuous process improvement.
- Capgemini's knowledge transfer and attrition could be improved upon. Clients reflected that the Global Process Model is well-conceived but needs to be more rigorously applied by Capgemini in its use.
- For government clients considering Capgemini for F&A BPO, it has minimal experience in the public sector for F&A BPO.
Cognizant started selling F&A BPO in 2006. It employs approximately 4,000 FTEs in F&A BPO. It operates F&A BPO in India from six centers and also from the U.S., Sweden, Singapore and the Philippines. In 2013, it acquired SourceNet, which will supplement its accounts payable capabilities and North American presence. In 2012, Cognizant moved from the Niche Players quadrant to the Visionaries quadrant due to its strong grasp of the market and its investment in delivering business results; it is operating at a lower scale of operations than the Leaders.
- Cognizant's clients praised its strong transition skills, and the company's ability to deliver process change and clarity in communication skills with respect to setting expectations of what can be successfully delivered.
- Strong vertical capabilities include delivering F&A BPO for financial services, communications, manufacturing, retail and services.
- Cognizant has developed a strong vision as to the future of the tools and services that will support finance in future organizations. It has built many internal tools. It also has formed a relationship with Oracle for supplying business process as a service (BPaaS).
- Cognizant has a staff of 4,000 delivering F&A BPO from the Philippines and India. However, the majority of the F&A BPO services are delivered in the English language. So, while it has several international customers from the U.K., U.S. and Norway, the delivery profile is yet to incorporate other language skills.
- Cognizant needs to improve the consistency in its F&A BPO delivery capabilities, improve attrition in certain delivery centers, and mitigate some of the impact of attrition with more knowledge management and cross-training processes. Cognizant could also improve its ability to share best practices from its other clients.
- For government clients considering F&A BPO, Cognizant has no public-sector experience for F&A BPO delivery.
EXL is a global BPO and analytics company. It has been offering F&A BPO since 2001. EXL employs more than 21,000 FTEs, of which 7,350 are dedicated to F&A. EXL successfully delivers services from its global delivery centers in Bulgaria, Czech Republic, India, Malaysia, the Philippines, Romania and the United States. While the acquisition of OPI in 2011 doubled its scale, EXL still has relatively less delivery experience for international services than the providers in the Leaders quadrant and remains in the Challengers category. EXL's position is due to its need to strengthen its vision in comparison with the Leaders; however, EXL is developing BPaaS solutions to augment its value proposition.
- With OPI fully integrated, EXL now has significant numbers of high-quality senior staff in their F&A BPO practice. A significant portion of EXL's F&A BPO revenue comes from higher-end finance transformation and complex F&A BPO services, such as treasury management, reporting and tax compliance.
- Several clients cited EXL's strong focus on delivery and transition, praising its flexibility and strength in project management and quality (especially evident early in the engagement). This is augmented by a good reporting process and a good cultural fit of delivery staff with clients. Several clients also mentioned the high levels of availability of senior management and EXL's continuity of service (from the sales process to delivery).
- EXL has steadily developed strengths in industry-specific F&A BPO solutions for several verticals: professional services, manufacturing, transportation and travel, banking, media, insurance and healthcare sectors.
- EXL generates most of its work in the U.K. and the U.S. EXL may be required to broaden its footprint of global delivery centers for its global clients, as it presently has no delivery in Latin America or China.
- EXL's ability to articulate its vision slowed slightly while integrating the OPI acquisition, but with that integration complete and its planned investments in new tools and technology, EXL has the appetite to be a strong Challenger. While EXL provides benchmarking through an alliance, it is slightly behind the market in launching its own process template guidelines, and clients note that EXL could be more assertive in bringing best-practice processes from across its client base, especially where process enhancement technologies and services are required.
- Some clients cited that EXL could refine its issues escalation procedures, despite a high-touch executive team. Specifically, it can lack clarity in what issues it can resolve independently of the client, and it could improve its cross-training of clients for knowledge management purposes.
Genpact is a global provider of business process and technology services, with 76% of its revenue generated from BPO. The company started providing F&A BPO services in 1997 and now has approximately 17,250 staff working from 32 centers in 17 countries. These include North America, Guatemala, Mexico, Brazil, Colombia, EMEA (Lublin, Cluj, Bucharest, Budapest, Rabat, Dubai, the Netherlands and Czech Republic), the Philippines, Australia, Japan, South Africa, China, and India (Delhi, Gurgaon, Hyderabad, Jaipur, Kolkata and Bangalore). This makes Genpact the largest F&A BPO employer worldwide. Genpact recently acquired Accounting Plaza, which provides F&A, HR and PeopleSoft ERP services to Ahold and other clients in the retail, wholesale, banking and healthcare industries in Europe. In 2011, the company acquired Akritiv Technologies, a leading provider of cloud-based order-to-cash solutions that has since expanded to offer a full F&A BPO solution suite. Genpact deploys a good mix of F&A BPO offerings. Genpact is listed as a Leader due to the company's ability to win business and deliver against the business it has won and meet client expectations. Gartner estimates that Genpact's F&A BPO service is one of the fastest-growing of the suppliers in this Magic Quadrant, and the company demonstrates a strong ability to execute, retain and extend client relationships.
- Clients reflected that Genpact is good at benchmarking services and that delivery staff show a good level of engagement, which is supported by a continuous improvement culture and a partnership approach.
- Clients cited Genpact's clear ability to articulate techniques of process improvement, via its process methodologies and operational consultants.
- Genpact has strong industry experience in its largest industries for F&A BPO, which is the banking and insurance sector, followed by manufacturing.
- Clients observed that Genpact needs to work harder on providing interpretation of finance data and that it could be more proactive with clients as to how work moves around in its global delivery model. Genpact needs to improve its method for setting expectations regarding what process improvements can be delivered and must be cautious, as its sales teams on occasion can be a little pushy.
- Genpact is addressing its lack of process reporting systems with a new offering, but it is early days for this. It is still catching up on technologies to support process improvement, and clients must be cautious as to the newness of some of these technology-based services.
- Genpact has less experience in its portfolio in the public sector, healthcare and education verticals.
The total BPO activities of HCL Technologies represent 5.5% of its service business; the rest is IT-related. HCL started selling F&A BPO in 2004. It employs 4,110 FTEs in F&A BPO. It operates from three centers in two countries, including India (Noida and Chennai) and North America; furthermore, it has F&A BPO staff working from various customer locations in the U.K. and Europe. HCL is behind the Leaders in terms of its ability to articulate its vision for the future of its F&A BPO delivery, but it has moved from the Challengers quadrant into the Visionaries quadrant, which reflects its new focused range of end-to-end service deals and its desire to focus on unique partnership models to suit customer needs on special contracting types. HCL generates most of its F&A BPO activity from the U.K. and the U.S., and it has expanded its customer base in Europe and Asia/Pacific with recent wins in the financial services industry. While it has experience delivering Pan-European projects, it has limited non-English language skills and relatively less experience than the Leaders.
- HCL has created an interesting set of commercial models. HCL wants to pursue more strategic partnership types of F&A BPO, and it has successfully achieved these partnerships with two major banks and a global custodian for F&A BPO services.
- HCL has built up strengths in delivery and contracting flexibility, process improvement and its ability to scale up for peak volumes.
- Clients mentioned that HCL senior leadership is readily available and has empowered its delivery teams to take decisions as required.
- HCL has F&A BPO expertise in the financial services, communications, transportation and travel, retail, utilities, manufacturing, and publishing industries.
- Clients observed that HCL delivery staff could improve in communication, language skills and staff retention. HCL should also bolster its roster of strong talent that can "think out of the box" in delivery.
- HCL needs better continuity between sales and then delivery teams. Sales were also said to be too driven by quarterly revenue targets.
- It has less experience in the public sector than in other industries.
BPO as a whole represents 7.2% of HP's total service business. In 1992, it started selling F&A BPO, which is a significant revenue contributor to its larger BPO division. It employs approximately 10,600 FTEs in F&A BPO. It operates from more than 20 centers in more than five countries, including India (Bangalore and Chennai), Poland, China and Costa Rica. In 2011, it acquired Autonomy, which will support data analysis and will be integrated into BPO solutions. HP has built up its vision to move from the Challengers quadrant to the Leaders quadrant, as it has delivered some complex projects on a global scale.
- HP has strong global delivery capabilities founded on its root cause analysis, flexibility in service, an approachable style and good business continuity planning.
- HP has been making significant investments in its F&A team with new senior leadership roles and new technology investments in accounts payable, operational benchmarks and a payment recovery partnership with KPMG.
- HP has built a good balance of services in transactional finance and higher-level finance skills in 16 comprehensive F&A BPO deals.
- Vertical-industry expertise is strong in the consumer packaged goods industries.
- Clients noted that HP is challenged with attrition issues at several levels — specifically in India.
- Some clients cited that sales teams could be more engaged in servicing their accounts.
IBM started selling F&A BPO in 1995, from its Global Process Services division. BPO as a whole now accounts for 4.5% of IBM's total service revenue. It employs approximately 15,000 FTEs in F&A BPO. It operates from more than 20 centers in more than eight countries, including the U.S., China, the Philippines, Brazil, Argentina, Poland, Hungary, and India (Delhi, Chennai and Bangalore). Since 2009, it has acquired Emptoris, Sterling Commerce, Lombardi, Clarity Systems, RedPill Solutions, Coremetrics, Cast Iron Systems, Datacap and SPSS. These acquisitions will improve its ability to offer cloud-based BPO services, business process management services and analytics. IBM remains positioned in the Leaders quadrant due to its scale of delivery locations, its strong customer experience, and its broad range of F&A BPO services.
- Clients observed that IBM displayed operational excellence from the beginning of the service, with strong global expertise and experienced project managers who are good at identifying opportunities for incremental process improvement.
- IBM has built up a balanced portfolio of industry skills across the public sector, and manufacturing, retail, banking, healthcare and communications industries.
- IBM has invested heavily in its process methodologies.
- Clients observed that IBM is not sufficiently nimble to work with. It can have a high level of bureaucracy and too many change orders, which could be handled more discreetly and flexibly.
- While clients praised IBM's ability to be very clear on what it can and can't deliver, as opposed to just saying "yes" to every request, which is a hazard in BPO delivery, this can also be a weakness, as it can take IBM too long to confirm if it can act on the request.
- IBM could improve its high-end skills in reporting and judgment-based services.
- Despite having access to a very broad range of process enhancement technologies and services, IBM can have limited ability to fully resource and deploy them or offer them at a suitable price point. In several cases, clients were disappointed that more major step changes and optimized pricing for software were not introduced, as IBM has such a wealth of in-house tools it can draw on.
BPO as a whole now accounts for 7.9% of Infosys' total service revenue. Infosys started selling F&A BPO in 2004. It employs approximately 8,000 FTEs in F&A BPO. It operates from more than 14 centers in more than nine countries, including India (Bangalore, Pune, Chennai, Jaipur and Delhi), China, the Philippines, Czech Republic, Poland, Mexico, Brazil, South Africa and the Netherlands. In 2012, it acquired the Portland Group, which will strengthen its sourcing and procurement services, and Swiss consulting firm Lodestone, which adds 250 finance transformation consultants in the IT and process space. Infosys remains a Leader in the Magic Quadrant due to its understanding of clients' requirements, its global delivery presence and its operation skills.
- Clients mentioned that Infosys is very collaborative and is responsive to requirements, with an open communications style and with direct access to senior leadership.
- Infosys has developed strengths in delivering F&A BPO for high-tech manufacturing, banking, communications, retail, and media and entertainment.
- Infosys has built a strong vision and use of process enhancement technologies and services that will support finance in future organizations.
- Clients observed that delivery and transition skills are strong.
- Infosys BPO could do more to harness the Infosys ITO capabilities, specifically in accounts, in which Infosys was the system integrator for the ERP system.
- Retention of key delivery staff was highlighted as a challenge by certain clients.
- Infosys could improve on aligning its F&A BPO offerings with clients' strategic priorities in a more timely manner and work on challenging the clients if they ask for unrealistic deliverables.
- For government clients considering F&A BPO, note that Infosys has limited experience in delivering F&A BPO to the public sector.
Serco is an international service company that runs services for governments, public-sector organizations and major corporations. In 2011, Serco acquired several BPO providers: Intelenet for BPO; and two contact center organizations — The Listening Company in the U.K. and Excelior in Australia. Serco has created a new management structure for this new combined BPO business, which is split by regions (that is, the U.S., Asia/Pacific and Europe), covering 30 countries. Intelenet has been providing F&A BPO since 2003. Serco employs approximately 4,442 FTEs in F&A BPO. It operates F&A BPO from six centers in three countries, including the U.S., the U.K. and India (Mumbai, Chennai and Delhi).
Serco is rated in the Niche Players quadrant, as it has yet to fully realize the potential from its investment in Intelenet. Serco plans to make further investments in scaling up its technology capabilities during the next few years to increase its use of process enhancement technologies and services.
- Several clients stated that Serco demonstrates key strengths in operations management, supported by a highly engaged senior management team that engenders a strong culture of listening to clients.
- Strong vertical industries for F&A BPO include banking, services, transportation and travel. Gartner expects that in Serco's combined group, the public-sector F&A BPO will emerge as a strength.
- Serco's resources and services are strongest in the U.K., the U.S. and the Indian domestic market for selling F&A BPO.
- Serco's global delivery footprint spreads across the U.K., the U.S., Latin America, Australia, the Philippines, the Middle East and India, and the company offers clients an extensive combination of nearshore, offshore and onshore solutions.
- Serco has less international experience of delivering multiple languages than other providers, and it has limited European nearshore delivery location.
- Serco acquired Intelenet in 2011 but has not yet joined up the management structure to have a single leader in charge of global delivery. This is reflected in a set of challenges cited by clients, including lack of visibility of processing, poor knowledge management, minimal cross-training of staff, attrition, and lack of a collective approach to both process improvement and tools investment.
- Clients observed that Serco's sales and account teams are not as strong at supporting their account as they would require.
BPO, which grew 19% in revenue for Steria in 2012, accounts for 17% of Steria's total service revenue; the rest is IT services. Steria started selling F&A BPO in 2002. It employs approximately 2,000 FTEs in F&A BPO. It operates from more than 10 centers in two countries — the U.K. and India (Pune, Chennai and Noida). In 2010, it acquired a procurement service from the U.K. Department of Health, which strengthens its end-to-end source-to-pay offerings. Steria remains a Niche Player in this Magic Quadrant due to its U.K.-centric business, which means that it has less knowledge of servicing Pan-European or global requirements today. Steria is ready to leverage its presence of operating in 10 other European countries, and it has created some centers of excellence (for example, its own expenses are managed out of its German business).
- Steria's strength is in its ability to service the F&A BPO U.K. clients for which it uses F&A BPO delivery centers in the U.K. and India.
- Steria has strengths in the vertical sectors of government, healthcare, police, public services, communications, media retail, leisure and transport.
- Clients cited Steria's strong continuous improvement initiatives.
- Steria has a large Indian delivery presence, but it has no commercial experience with F&A BPO delivery from other locations, such as Eastern Europe, or for organizations with multiple language requirements. However, Steria could leverage its multilingual Polish and Moroccan delivery centers — currently used for remote infrastructure management services — to Pan-European clients. It does deliver a small amount of F&A BPO services for the North American operations of its clients — but these are delivered from its U.K. and Indian centers.
- Clients mentioned that Steria can occasionally be a little slow in decision making, and it needs, as with almost every provider, to work on its attrition in certain Indian delivery locations.
- Vertical-industry sectors that Steria has less experience in include manufacturing and utilities.
- Clients cited that its transition methodology could be improved on in some cases.
Sutherland Global Services is a specialist BPO company, with the majority of its revenue generated in customer management BPO. It started delivering F&A BPO in 1995. It has 2,300 F&A BPO employees delivering from centers in Bulgaria, India (Chennai and Thane), Dubai and the U.S. (Tulsa). It acquired the Convergys F&A BPO division in 2011 and the analytics specialist Adventity in 2010. Sutherland made its debut in this Magic Quadrant as a Niche Player, mostly due to its smaller FTE and geographical capabilities; however, due to its relatively strong technology and service vision for small and midsize businesses (SMBs), it has moved to the Visionaries quadrant in 2013.
- Clients mentioned that Sutherland is "open minded" to deal with, capable of being proactive and thinking outside of the box. It is reviewed as being easy to do business with and having a strong team that rigorously tracks cost savings.
- Sutherland has amassed skills in servicing the SMB market (defined as companies with revenue between $200 million and $800 million), investing in an offering that it calls "Clarity Enterprise Solution (Clarity es)." Clarity es provides SMBs with Microsoft Dynamics AX, combined with F&A BPO, HR BPO and procurement services.
- Industries in which Sutherland has more experience include the airline sectors, banking services, and transportation and travel.
- Sutherland has its strongest sales presence for F&A BPO in the U.S. and the Middle East.
- Sutherland is currently less sophisticated than its competitors in its use of benchmarking.
- Sutherland could invest in more cross-training plans and knowledge management to help with service continuity with the inevitable changes in staff. It could be firmer in guiding clients in the reality of servicing their unrealistic requests.
- Global servicing and delivery scale are smaller than leading firms. While it is servicing F&A BPO in 11 languages, this international capability is today a relatively small piece of its portfolio.
- Sutherland is lacking experience in the public sector and energy and utilities sectors, and it is currently still stronger at sales in the U.S.
Tata Consultancy Services (TCS) started selling F&A BPO in 2006. As a company, it sells both IT and BPO services with revenue of $11 billion. BPO services generate $1.3 billion and represent 12% of total service revenue. TCS employs approximately 11,100 FTEs in F&A BPO, which is the fourth largest by FTE size. It operates from more than 17 F&A BPO centers in five countries, including the Philippines, Chile, Ecuador, Hungary and India (Mumbai, Chennai, Delhi, Bangalore and Kolkata). It made no relevant acquisitions in 2011. Its relationship with Oracle to deliver F&A BPO as a BPaaS offering, along with its relative strength in sales in 2013 and execution, held it in the Leaders quadrant.
- Clients mentioned that TCS is adaptable to making modifications with a strong process delivery and transition methodology. This strength is shown through an ability to deliver operational improvement.
- TCS's sales resources are strongest in F&A BPO in the U.K. and the U.S. Its partnership approach was described as a strength by clients who cited that TCS works collaboratively.
- Industry sectors that are strong for TCS in F&A BPO include banking, insurance, retail and manufacturing.
- Clients observed that the link and leverage between TCS's BPO and ITO capabilities could be strengthened in its F&A BPO services. This is especially pertinent in accounts in which TCS was the system integrator for the ERP system.
- TCS could be stronger at suggesting new ideas and best practices for clients, challenging how the processes are delivered and being less bureaucratic in its decision making.
- Government clients should note TCS has no clients for the public sector in F&A BPO.
Wipro started selling F&A BPO in 2005. It is an IT and BPO provider, for which BPO as a whole represents 8.5% of its service revenue. It operates F&A BPO from 22 centers in 10 countries, including Poland, Romania, Brazil, China, Mexico, the U.S., the Philippines, Mexico and India (Bangalore, Delhi, Chennai, Pune, Hyderabad and Mumbai). It employs approximately 8,700 FTEs in F&A BPO, including 3,500 in record to report and other high-end finance processes. It acquired 10 new F&A BPO customers in 2012 and had a 100% renewal record with its existing customers. Wipro remains a Leader in this Magic Quadrant because it is balanced in its performance for customers, operations and global delivery.
- Delivery execution was highlighted as a strength, with several clients citing a strong ability to deliver on transactional services and stating that Wipro will be flexible when faced with ad hoc requests.
- Wipro has a strong technology vision that has led to new in-house-built technologies for F&A BPO delivery, including its Base))) toolset. Base))) is its analytics engine and service delivery platform to drive business value, efficiency and visibility for its clients.
- Vertical market strengths for F&A BPO include manufacturing, high technology, retail and consumer packaged goods, telecom, and financial services.
- Wipro is good at optimizing the processes that it is given, but some clients suggested that it could be more visionary in anticipating the ultimate end state for the processes and that it needs to further improve its ability to communicate its vision to prospects and clients.
- Clients suggested that while Wipro has good delivery quality overall, they experienced some mix of capabilities of resources; the caution is that Wipro does not always place the optimum staff in the position.
- Government clients should note that Wipro has no F&A BPO clients in the public sector.
WNS started selling F&A BPO in 1996. It is a specialist BPO company, for which F&A BPO represents a significant share of total revenue. It employs about 7,500 FTEs in F&A BPO. It operates from 31 centers in 10 countries, including India (Pune, Mumbai, Bangalore, Delhi, Nasik and Chennai), Sri Lanka, the Philippines, Romania, and Costa Rica. In 2011, it acquired Paxys' stake in a joint venture, and in 2008, it acquired BizAps, a specialist accounts payable service provider.
WNS remains a Leader in this Magic Quadrant because it is balanced in its performance for customers, operations and global delivery, but it slips back slightly due to its inability to communicate its vision. WNS has realigned to sell to clients by specific vertical industry, with F&A specialists it can draw on to support sales.
- Clients cited that WNS performs work in a timely fashion and has succeeded in major service improvements — for example, in improving days sales outstanding via strong collections skills. This is supported by its partnership network that includes Denali, Ariba, coAction.com and Kyriba.
- Clients cited that the management team is strong, good at understanding client needs and able to demonstrate partnership skills to deliver client solutions.
- Vertical expertise includes transportation and travel, financial services, consumer packaged goods, utilities, and media and entertainment industries.
- WNS needs to invest in more process enhancement technologies and services, especially for a cross-finance dashboard.
- Clients cited that despite WNS's significant investment in process improvement schemes, it is not supplying sufficient numbers of "outside the box thinkers" to its services, particularly for more sophisticated analytical work.
- It has a strong sales culture that can come across as a little pushy at times. Clients mentioned they have experienced high turnover of staff.
- Government clients should note WNS has limited experience in the public sector for general F&A BPO.
In February 2010, Xerox acquired ACS, which offered F&A BPO since 1996. BPO now accounts for more than 55% of Xerox's total service revenue. In 2013, Xerox now has approximately 7,160 FTEs working directly in F&A BPO, and it has an additional 24,250 FTEs performing F&A services integrated with industry solution teams (for example, financial services and higher education). It operates from 15 core F&A BPO centers in many countries, including the United States, Jamaica, Mexico, Brazil, Spain, Poland, India, the Philippines and China, with access to Xerox's 92 service delivery centers around the world.
Xerox previously acquired Symcor's U.S. operations, adding lockbox and payment services to supplement its financial services offerings. Xerox has remained a Leader in the 2013 Magic Quadrant due to its well-articulated understanding of the clients' challenges, extensive global delivery capabilities, and strong operational delivery score from clients.
- Xerox clients appreciate its business partnering skills, its desire to grow and take on more complex work and its timely commitment to service client requirements, as supported by its Total Recall methodology.
- Xerox has invested in process enhancement technologies and services. For example, some clients rated highly Xerox's workflow tool named "DART," which is used for processing F&A BPO. It also has a good portfolio of partnerships for F&A BPO.
- The greatest portion of Xerox's revenue comes from the vertical industries of banking, healthcare, manufacturing and education.
- Xerox needs to improve its ability to promote its capabilities, and its sales and marketing. It is currently less sophisticated in its use of benchmarks from its existing clients than other leading providers. Several clients cited that organizationally, it comes across as siloed and has a skill gap between the U.S. and European sales teams, and sales teams on occasion can be a little pushy.
- Certain clients highlighted retention of key delivery staff as a challenge, which is unusual for Xerox, as it has a widely diversified set of delivery locations (that is, it is not India-centric, where most attrition is an issue).
- Poor exception handling was mentioned by clients: Xerox delivers the basic services well when the processes are documented; however, a few clients cited that Xerox struggles sometimes to manage exceptions to the process.
We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.
No new providers have been included.
Capita was dropped from the 2013 Magic Quadrant due to not having a strong dedicated focus on selling stand-alone F&A BPO.
This Magic Quadrant evaluates suppliers on their F&A outsourcing services only. The criteria for inclusion of service providers for this Magic Quadrant are based on a combination of qualitative and quantitative measures.
A minimum threshold of $40 million — or above from F&A BPO — (estimated for fiscal 2012) generated from relevant service provision to show establishment in and commitment to the F&A BPO market.
Overall market interest in and visibility of the provider, determined by serious consideration for providing comprehensive F&A BPO services from public- and/or private-sector clients.
Gartner analysts evaluate providers on the quality and efficacy of the processes, systems, methods and procedures that enable provider performance to be competitive, efficient and effective, and to positively impact revenue, retention and reputation. Ultimately, providers are judged on their ability and success in capitalizing on their vision. The following Ability to Execute criteria were used to evaluate vendors' positions.
Service: This includes core services offered by the provider that compete in/serve the defined market. This includes current service capabilities, quality, feature sets, skills and so on, whether offered natively or through partnerships as defined in the Market Definition/Description section and detailed in the subcriteria. Specifically, F&A BPO customer references focused on transition management and steady state of service levels of F&A process delivery.
Sales Execution/Pricing: This evaluates the service providers' capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support and contracting expertise, as shown in number of and scale of contracts awarded.
Market Responsiveness and Track Record: This evaluates the vendor's ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve, and market dynamics change. This criterion also considers the provider's history of responsiveness and length of time servicing the market.
Marketing Execution: This refers to the clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This mind share can be driven by a combination of publicity, promotional activities, thought leadership, word of mouth and sales activities. Vendors' websites, presentations, service literature and a client survey contributed to evaluating this category.
Customer Experience: This includes the relationships, products and services/programs that enable clients to be successful with comprehensive F&A BPO deals being evaluated. Specifically, this includes the ways customers receive operational F&A BPO service support.
Operations: This refers to the ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, ability to manage attrition, tools and services capabilities, service methodologies and other factors that help the organization operate effectively and efficiently on an ongoing basis.
The following criterion was not used for this Magic Quadrant: Overall Viability. All the firms in this Magic Quadrant have total revenue of more than $40 million and are considered viable organizations. Hence, no differentiation could be found if evaluating on this criterion. There is always a chance that suppliers listed may be bought, but this does not impede their ability to sell F&A BPO services in 2013 and 2014.
Source: Gartner (May 2013)
Gartner analysts evaluate technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well they map to the Gartner position. Ultimately, providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider. The following Completeness of Vision criteria were used to evaluate vendors' positions.
Market Understanding: This evaluates the ability of the service provider to understand buyers' needs and translate these needs into comprehensive F&A BPO relationships. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those wants with their added vision.
Marketing Strategy: This includes a clear, differentiated set of messages promoting F&A BPO, consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
Sales Strategy: This refers to the strategy for selling F&A BPO that uses the appropriate network of capabilities, including marketing, service and communications affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: This evaluates a service provider's approach to comprehensive F&A BPO development and delivery that emphasizes depth and breadth of F&A BPO services as they map to current and future requirements of use of technology, global delivery centers catering for multiple languages, and a good balance of transactional and high-end F&A delivery.
Vertical/Industry Strategy: This refers to the service provider's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets, which differs for many reasons, including the balance between types of public- and private-sector organizations serviced.
Innovation: This evaluates the direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, or defensive or pre-emptive purposes. The service provider's reputation as a "thought leader" and innovator will also be evaluated.
Geographic Strategy: This refers to the service provider's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, including F&A BPO service delivery locations, directly or through partners, channels and subsidiaries, as appropriate for those geographies and markets.
The following criterion was not used for this Magic Quadrant: Business Model.
Source: Gartner (May 2013)
Leaders are performing well today, both with a clear vision of market direction and by actively building competencies to sustain their Leaders position in the market. The comprehensive F&A BPO players in this quadrant generally share superior market understanding, and they have a global client base, an extensive network of well-distributed and highly populated global delivery centers catering for multiple languages, a good balance of transactional and high-end F&A delivery, and innovative well-communicated and marketed sales offerings.
Challengers execute reasonably well today, but they have yet to capitalize on their vision. For vendors in this quadrant, increased attention to sales and marketing will help improve future alignment to existing clients and new prospects.
Visionaries have a clear vision of market direction and are focused on preparing for that, especially with innovative technology solutions, but they still can improve the scale and scope of service delivery. For the vendor in this quadrant, time and attention to executing the visionary service and delivery plans will help it to capitalize on its visions with new prospects.
Niche Players typically concentrate on particular market segments, such as U.K.-based clients, public-sector clients, or manufacturing sector or midsize organizations, and they often support only those services that apply to those targeted segments. Strengthening geographic sales and delivery strategy is a bigger consideration than in the past among the comprehensive F&A BPO players in this quadrant; targeting more vertical markets or more regional markets directly or via partners can therefore designate Niche Player status. The relative number of installed bases of comprehensive contracts is also a factor. However, many of the providers in this segment were rated very highly for customer experience, and many can be considered to be leading players within their niche market focus.
Gartner defines comprehensive F&A processes as the outsourcing of three or more finance processes to a single provider. This report analyzes leading providers of F&A BPO that have met the criteria of $40 million or more in F&A BPO revenue. The market is differentiated by the scale of delivery that F&A BPO vendors have experience with; for example, several providers support complex, global deals, while others focus on supporting midsize corporations, or just one industry, or just one country, such as the U.K. These characteristics are important to weigh in making the right provider choice, and in the cases in which a provider supports only one country or limited services, then this has contributed to its rating in this system.
This Magic Quadrant offers a deep analysis of the competitive positioning for comprehensive F&A BPO services by showcasing the relative placing of the main players in the market according to a variety of criteria, and by offering detailed strengths and cautions for each of the included vendors. The ratings of the vendors represent a combination of research and client reference checks conducted specifically for the Magic Quadrant process, along with input from the Gartner BPO research community, ongoing vendor briefings, interactions with Gartner buyer clients and market developments.
Gartner's comprehensive F&A BPO Magic Quadrant is a useful starting point from which to identify and evaluate comprehensive F&A BPO services from a variety of vendors. Selection of a good provider for comprehensive F&A BPO services should be based on a detailed evaluation of an enterprise's end-to-end F&A needs and objectives compared with a service provider's capacity to fulfill those requirements and expectations over time. Therefore, enterprises must determine which comprehensive F&A BPO provider can best address their particular requirements.
Note: Just because a service provider falls into the Leaders quadrant, that position doesn't automatically make it the right choice for a buyer's needs.
Although more than 1,000 comprehensive F&A BPO deals were signed in the last 20 years and 172 of these were signed in 2012 with the leading 17 players, clients and providers still have some way to go to truly optimize this service. Firstly, new buyers must figure out how to get quickly educated about exactly what offerings are currently being competently delivered. Sadly, this process still takes too long. The best way to quickly learn is to visit a couple of delivery centers that have the full range of finance services delivered and then talk with current users about what is possible, because almost all financial processes can be and have been outsourced — from complex reporting to the more typical services of accounts payable and accounts receivable.
Just to give some scale, in the top 17 F&A BPO providers combined, there are about 140,000 people servicing F&A BPO clients, of which 36,000 support accounts receivable, 36,500 perform accounts payable, and 35,000 perform management reporting and general ledger, master data management, and reporting and analytics services. A further 29,000 people are performing specific industry F&A BPO tasks, for example, in airlines, banks, telecommunications and insurance companies. More than 170 new deals were signed in 2012 with the leading 17 BPO providers; while that averages 10 each, four providers signed significantly fewer deals, and the most deals signed by one provider was 26. In total, there are now 1,058 organizations that have signed comprehensive F&A BPO deals with the leading F&A BPO providers. Of the 1,058 organizations that signed deals, 205 renewed, 15 swapped providers, and between 10 and 20 took the work back in-house. Thus, the market for F&A BPO grew strongly in 2012 from 2011, with average deal sizes of $10 million to $20 million, although leading providers had much-higher average deal sizes of roughly $40 million.
Secondly, providers need to get better at quickly demystifying what it is they actually do — it's not rocket science. But oftentimes, clarity about what the services actually do is not forthcoming. Several of the leading providers have figured out not only how to deliver reliably but also how to explain in simple process methodologies what the service is that they will perform.
The best providers will also explain what the clients and prospects must do to make the service work. The education of F&A BPO buyers is still a major issue. New and often existing clients have high expectations about providers "transforming and innovating" in the F&A service, but the reality is proving that this can be done only if a true partnership is established. This would be where the client figures out how to get the optimum service from the vendor by getting clear buy-in from the client's organization on how the finance processes — both insourced and outsourced — can be optimized. If this doesn't happen, the vendor will simply stick to doing what has been contracted for, and you will find that the finance organization went into stasis, which is exactly the opposite of what organizations should be getting from BPO providers.
This story is not new. It is the same story that we have seen for the last 11 years, since major adoption of this service started, because organizations are looking for a dream solution to a back-office function that they have rarely previously measured, monitored, managed or benchmarked. In addition, vendors are typically not great at structuring clients' demands — and have not pushed back enough on areas of an organization's finance group when, for example, the buying organization doesn't really have a business case to outsource or is not really suitable to be outsourced. Providers need to set better expectations on challenges facing clients and supply clients with a playbook both for internal change and for pricing pros and cons. Most providers need to improve their sophistication in selling the benefits of F&A BPO and not just talk about the credibility of their companies. Suppliers and clients also need to continue to take attrition seriously, as discussed in the Attrition Still a Major Issue in Many Deals section.
Providers are at various stages of developing better practice methodologies, cloud solutions for accounts payable and accounts receivable and full technology wrappers to supplement and, in some cases, replace ERP systems. Gartner terms "process enhancement technologies and services" as the tools and wrappers that supplement or replace sections of ERP systems. Process enhancement technologies and services are increasingly becoming an important part of how BPO providers should be evaluated. Key questions to ask include: Does a provider have the ability to add technologies for scanning, workflow, treasury and reporting on the organization's global financial position. Is this reporting needed real time, once a week or once a month? Has the provider built partnerships for electronic invoicing, for consulting services or for taxation services? Will the organization have to pay license fees for software for best-of-breed software, or will the software be devised in-house but charged as part of the service fee with no separate license fee?
The market is extremely competitive, with more than 40 providers targeting selling the full, comprehensive F&A BPO offerings, and many more specialists, such as NCO (with its specialist accounts receivable/collections), or Basware and Datamatics (which offer or have accounts payable business process offerings). These and the following providers that supply F&A BPO are not included in this Magic Quadrant due to their either having less than three F&A BPO processes or not meeting the required revenue threshold: NIIT Technologies, MphasiS, Datamatics, Quatrro, Xchanging, Caliber Point Business Solutions, Paramatrix Technologies, Aegis, Tech Mahindra, Mahindra Satyam, NTT Data, Aditya Birla Minacs, iGATE, Acubor, Vee Technologies, Mouchel, BT and Liberata.
Against this backdrop of a highly competitive market, providers are being influenced to try to differentiate their offerings by using process enhancement technologies and services, offering benchmarking services, process methodologies and new delivery locations, and adding consulting skills to the BPO offering.
Unfortunately, there are some challenges that most providers are still finding hard to resolve, including attrition, and a general criticism that the providers are unable to tell clients early and often about bad news so that the clients could help fix the problem or mitigate the risk earlier. However, clients that treated their F&A BPO providers as partners (that is, as part of the team) had better experiences of F&A BPO versus those that kept the service provider and its staff at arm's length and that expected the service provider to be able to fix all issues related to finance in the whole end-to-end processes across the organization.
Competitive Differentiators Being Driven by a Highly Competitive Market
Still No Single "Global" Standard Way to Run or Price a Finance Process — Benchmarking
The reality of the world is that there is no one way to do any single finance activity, either within organizations or between organizations. Price benchmarking data is available — mostly only as the "going rate" for staff in certain locations — but this data does not reflect the issue of whether the provider "bought" the deal at below-market prices in the first instance. Process benchmarking is also hard to come by at a detailed and standardized process level across BPO providers. More than half of the leading F&A BPO providers have made benchmarking of their internal clients' data available to existing clients..
Process Enhancement Technologies and Services
Most F&A BPO providers have built a collection of best-in-breed or in-house tools, as well as relationships with specialist service providers, such as scanning, treasury software or electronic invoice companies. This approach allows the processes to be delivered remotely, and it enables process efficiency and process standardization. Workflow is one of the most common tools adopted. This workflow is where the actual "innovation" happens, by adding solutions that have not previously been deployed by clients. However, most F&A BPO providers are not able to articulate the value proposition of many of their F&A BPO process enhancement technologies and services. This has resulted in low adoption of process enhancement technologies and services. Reasons for clients not adopting more of their providers' process enhancement technologies and services included: lack of education on awareness and benefits by the service provider; use of existing in-house functionality; and lack of resources and money to evaluate process enhancement technologies and services. Interestingly, many clients do not know what process enhancement technologies and services are being used on their account. Some F&A BPO providers have built a strong process enhancement technologies and services strategy: Certain F&A BPO providers have built a two-tiered process enhancement technologies and services strategy that has a range of process enhancement technologies and services offerings for the more-process-efficient-focused clients and one for the more-cost-efficient-focused clients. The cloud-enabled process enhancement technologies and services are emerging as a trend to use software as a service (SaaS) tools to enhance BPO providers' offerings in F&A.
Providers Integrating Consultancy Services Into BPO Activities
This has been a trend for the last few years with F&A BPO providers that have a commercial consulting organization. Several provides that do not have this capability in-house are either building it or partnering for the skills.
Vertical Market Expertise Is an Increasingly Large Part of Selection Criteria
"Yes, you can provide F&A BPO, but do you know my industry?" continues to be a concern of buyers in selecting a provider. Today, most F&A BPO deals are with clients that want to source F&A administration processes from lower-labor-cost locations and garner better F&A practices. Buyers must look at a provider's quality, vertical market expertise (which is increasingly becoming important as providers learn about specific industries' finance needs, such as payment terms and supplier types), and global delivery models to ensure a full evaluation of the provider's abilities.
Global Delivery: Latin America and Eastern Europe Are Growing, but India Still Dominates
The F&A BPO delivery market is split between providers that can support multiple languages typically from delivery centers in Latin America and Eastern Europe and global corporations, and those that specialize in supporting English language only. Today, approximately 50% of delivery for F&A BPO is still from India, with onshore delivery in the U.S. or the U.K. still accounting for a significant amount of delivery.
Buyers can split the market again by those that have bought access to less-expensive labor, versus those that have bought into a service of less-expensive labor and process improvement tools.
Adding End-to-End Process Capabilities for Source-to-Pay and Order-to-Cash Services
To differentiate offerings, BPO providers are now looking at servicing end-to-end processes, such as source to pay and order to cash. In the past three years, Capgemini acquired IBX for the sourcing platform, Accenture acquired sourcing staff from Ariba, and Infosys acquired the Portland Group, which is a sourcing specialist company. Many F&A BPO providers have some level of sourcing or procurement support activities that they have delivered for a while, or they have partnered with a specialist for support, including Genpact, IBM and Wipro. Gartner expects this trend to expand dramatically during the next two years.
Key Challenges of F&A BPO Adoption in 2013
Attrition Still a Major Issue in Many Deals
Disappointingly, F&A BPO providers are not always quick off the mark to anticipate or address the attrition rate issue; they must work with the clients to suggest ways in which they can mitigate the issue. Key resolutions for staff turnover include:
- Moving as many staff members as possible off the night shifts in India. Highly mobile, younger and less-experienced staff members take these shifts most often, and they are the ones most likely to leave. Structuring the work so that fewer staff members work after midnight (in terms of India's time zone) significantly decreased attrition.
- Awarding prizes for good work.
- Allowing visits from sponsors.
- Putting delivery staff on your organization chart.
- Bringing staff to the onshore locations to learn more about the company, or to work on special projects or to swap jobs.
New buyers must be careful when evaluating bid responses for the following operational issues:
- Providers do not all have the same policy in regard to whether the transition staff will come to your location or you will send your staff to their location. Ensure that you are aware of who is paying for the entire transition costs in your contract and whether your staff can really travel and transfer their knowledge at a remote location.
- Transitions take time — months and months — and they vary by the complexity of the task, the diversity of the processes and the locations. A transition will take time, even if it is just a "lift and shift." Often, new buyers are unrealistic in their expectations and race to achieve benefits, which can set the whole project off on a bad start.
- As a buyer, you should establish whether providers have invested in strong knowledge capture tools that will speed the transition.
- As a buyer, you should understand whether providers have invested in process methodologies that lay out how the process should optimally be conducted, which can save time in transition, because a variance between the client's process and the provider's standard is calculated early.
Everyone Should Ban the Words "Innovation" and "Transformation" Because They Will Lead Only to Misaligned Expectations
Many prospective F&A BPO clients have not picked up on these outsourcing lessons because they are typically buying outsourcing for the first time and continue to make the same mistakes as seen previously in the market. Ensure that you do not fall into traps, such as believing that "my service provider is all-knowing and can fix everything," or "I will pick the lowest price deal" and then be left wondering where the innovation and transformation are. The most successful F&A BPO clients have carried out a baselining project with the business users of the current state of processing efficiency, and the processing effectiveness of established processes, and they did not hope that the F&A BPO vendor will solve all the internal process issues, which may never have been addressed internally.
Ability to Execute
Product/Service: Core goods and services offered by the vendor that compete in/serve the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.
Overall Viability (Business Unit, Financial, Strategy, Organization): Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.
Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.
Market Responsiveness and Track Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.
Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word-of-mouth and sales activities.
Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.
Operations: The ability of the organization to meet its goals and commitments. Factors include
the quality of the organizational structure, including skills, experiences, programs,
systems and other vehicles that enable the organization to operate effectively and
efficiently on an ongoing basis.
Completeness of Vision
Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen and understand buyers' wants and needs, and can shape or enhance those with their added vision.
Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.
Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.
Business Model: The soundness and logic of the vendor's underlying business proposition.
Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.
Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.