Emerging Processes in BPO

Finance and accounting outsourcing (FAO), human resources outsourcing (HRO), and Procurement Outsourcing (PO) are three rapidly growing BPO trends. They have all taken different paths to get where they are today:

FAO (Finance and Accounting Outsourcing)
FAO has experienced a quick surge in a maturing market; with labor arbitrage and process efficiency as key drivers. According to the Everest Research Institute, the total contract value has been between US$50-200 million; with the average contract term of 6.1 years.

FAO pricing is either based on volume or headcount. Leading suppliers (in alphabetical order) are Accenture, ACS, Capgemini, Genpact, and IBM.

HRO (Human Resouces Outsourcing)
Much like FAO, HRO has seen rapid growth in a maturing market. In this process, however, technology applications and people expertise are the key drivers. Although the total contract value is the same as FAO, the contracts tend to be a little longer: 6.5 years.

HR Outsourcing pricing involves either a base fee plus variable charges or per employee plus variable charges system. The big HRO players are Accenture, ACS, Convergys, ExcellerateHRO, Hewitt, and IBM.

PO (Procurement Outsourcing)
Unlike the others, PO is still in the pioneering phase. Like HRO, it utilizes people expertise as a value driver. Like FAO, process effectiveness is also a driver. The total contract value is typically between US$25-100 million with average contract duration of 6.4 years.

PO suppliers handle pricing differently in that they charge a managed service fee with gain-share. They share an increasing focus on headcount and volume. Leading suppliers are Accenture, IBM, ICG Commerce, and Xchanging.


Named the Best Offhoring Destination for 2007, the Philippines is truly an ideal hub for business process outsourcing. Know more about BPO in the Philippines in the next section.