BPO slated to grow at 10% globally

By SiliconIndia   |   Friday, 22 November 2002, 08:00 Hrs
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A recent IDC survey has found that Business Process Outsourcing will witness an overall spending increase of 7.2 percent in 2002 and global growth of 10 percent during 2003.

BANGALORE: The study also said global consulting and IS market will see a spending decline of 7 percent by the end of 2002 and a further decline in 2003. Theresults of the survey were announced at the "Global outsourcing forum-2002" conference.

Speaking about the survey Senior Vice President, vertical markets and services industry research, IDC (USA), Mike Melenovsky, said, " The BPO trends show an increase in the breadth of services offering by the enterprises and expansion of offshore capabilities. Multi-function capabilities of service providers may offer an "one-stop-shop" features to enterprises."

"Many new segments in the BPO process have been identified and are expected to offer a strong service value in areas such as recruiting services, logistics, wealth management and processing services", he added.

The survey also found that that service provider contracting process will be more complex and an increase in inter-enterprise integration needs.

Consulting and integration opportunities increase within outsourcing process. Besides, the downward pricing pressure will force enterprises to lower their overall contract value. Service providers are poised to expand their offshore capabilities," Melenovsky added.

Enterprises shifting their business model are clearly aiming at moving towards, 'managed services' and are expected to achieve nearly a CAGR of 4.5 percent in the internal IS operations spending. The report clearly brings out the critical success factors that enterprises need to understand about such as the growing importance of managed services, adapting to client culture and expertise in relevant technology.

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