Cost savings is the number-one priority in F&A service providers’ selection criteria

Voice of the customer (VoC) feedback from our recently published HFS Horizons: F&A Service Providers, 2023 study shows that clients still prioritize cost savings as their key selection criteria when choosing service providers. Alongside this, the importance of service quality, industry and technology expertise, and customer experience is staying caught up and gradually making its way toward the top. Beyond the regular nuances of execution, service providers are enabling their stakeholders to ideate and build a transformation path with a burgeoning focus on technology, data, innovation, geographic penetration, and the constant disruption in the operating environment to enhance overall service delivery.

• HFS Horizons VoC feedback shows that 88% of respondents consider cost savings potential the topmost factor when collaborating with service providers (see Exhibit 1). Their ability to drive cost reduction is also rated highest among the other factors (see Exhibit 2). Also, 64% and 61% of the respondents in Exhibit 1 say the quality of delivery and industry domain and expertise, respectively, are among the key factors they consider when collaborating with service providers.
• The F&A services market has matured significantly over the last few years. Enterprises expect more innovation and industry-specific solutions. However, in the current macro environment, many enterprises now focus on cost savings, which remains a key priority.
• A CFO of an information technology company says, “With the current uncertain macro-economic environment, we are focusing on driving cost efficiencies. At the same time, we want to drive transformation for the company, shifting the business model and meeting capacity from savings to invest back in growth.”

The Bottom Line: Clients have dual expectations from service providers, which need to continue to simultaneously drive cost savings and value-based service delivery.

Service providers must constantly work with enterprises to identify areas where they can optimize costs and enhance efficiency.

Outsourcing services will continue to be pivotal in building enterprise capability effectiveness. Outsourcing services can provide instant access to expert resources such as skills and technology, and they constantly evolve their offerings to drive greater business value.

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