It is the BPO blitzkrieg and it’s not a short-term phenomenon. The global BPO market is expected to swell to $146 billion by 2008. But by all accounts the BPO market has a fragmented future.

The largest segment in the BPO market will be simple bulk transactions and the segment will grow to $58 billion by 2008 worldwide. Bulk transactions include simple tasks like credit card or stock trade processing. The second largest segment will be broad shared services, representing $57 billion by the same year.

Shared services include finance and administration, indirect procurement and human resources. Policy administration, claims, loan applications and other high volume vertical processes are projected to become a $6 billion sector. More complex and specialized vertical applications such as monitoring chemical control processes and environmental data reporting will reach the $5 billion in annual sales, but increasing customer confidence will also kick start the overdrive of the segment, with the vertical application BPO market reaching $24 billion.

All said and done, I strongly believe fragmentation in the industry is on its way up. And no one vendor will manage all the opportunities. There are firms looking to outsource human resources, finance and administration, claims processing and niche processes like environmental data reporting, chemical process monitoring.

However, no single company can claim mastery over all of these functional areas; monopoly is ruled out and organizations will not outsource all processes to just one company. There are the pros and cons to this situation. Advantages are the specialization, which means a more effective way of how the business is executed in an all round manner. The downside is definitely the disparate processes of the company, which are outsourced to different partners resulting in non-uniform outputs.