BPO to grow relative to 'mature' outsourcing

The business process outsourcing (BPO) market is set for strong demand relative to a more mature' purely IT outsourcing market, a four-year forecast published today has claimed.

BPO analyst firm, NelsonHall said the BPO market is predicted to reach $450 billion (231.1 billion) by 2012 in response, in part, to difficult global economic conditions.

It said the economic climate would hasten globalisation, leading organisations to not only use offshore outsourcing to reduce their cost base, but also exploit it to hasten entry into emerging growth markets. It added this strategy was particularly evident in the financial services and telecommunication sectors.

The report, entitled "Global BPO Market Forecast: 2008 2012," found the BPO mature has continued to mature in terms of supplier capability, traditionally around the accounting, sales and administration lines of business. This increased supply-side maturity was also matched by growth in total value of BPO deals awarded across all major geographic regions during 2007.

The report said services such as customer management services, payments and other industry-specific financial sector services, as well as recruitment process outsourcing, will benefit directly from these trends.

Those likely to gain include the emerging economies of Asia and Latin America, where global organisations are increasingly focusing on establishing themselves for growth. This will see support functions, such as finance and accounting services and procurement increasingly located here, leading to opportunities in the outsourcing and relocation of existing shared services centres, added the report.