Global Business Process Outsourcing
Global Business Process Outsourcing (BPO) Market to Exceed US$930 Billion by 2015, According to a New Report by Global Industry Analysts, Inc.
San Jose, CA (Vocus/PRWEB) February 10, 2011
GIA announces the release of a comprehensive global report on the Business Process Outsourcing (BPO) markets. Revenues in the global BPO market are projected to surpass US$930 billion by the year 2015, driven by the efforts of global businesses to cut costs in the short-term through outsourcing of non-core operations. Long-term growth would be driven by the rising adoption of transformational approach to outsourcing.
The recession and massive restructuring in the financial services sector forced corporations to cut back on discretionary spending and expansion initiatives, as a result of which large-scale transformational outsourcing contracts were delayed by 6-9 months. A few sectors were affected by the recession due to the inability of BPO clients to forge long-term contracts, with impact pronounced on companies that depended on hired outsourced processes of external service providers. Faced with tough market conditions, businesses turned focus on to cost reduction and maintenance of lean infrastructure. The fluctuating rates of international currencies, which form the basis for numerous international BPO agreements, are also affecting the revenue generation ability of BPOs.
The pace of recovery in BPO markets is likely to be fastest in the BRIC (Brazil, Russia, India and China) countries. Apart from geographical diversification, BPO services mix is also expected to diversify, with focus shifting away from traditional voice-based services towards industry-specific, non-voice, high-value processes. With customers looking to manage costs and retain customers, finance and accounting, customer relationship management, and business intelligence services are set to gain significance. Sectors such as utilities and healthcare are likely to adopt BPO services at a faster pace in the post recession scenario, as against public sector and financial services markets.
The United States and Europe collectively account for a major share of the global BPO revenues, as stated by the new market research report on Business Process Outsourcing (BPO). With the recession affecting all sectors of the US economy, opportunities for the outsourcing industry emerged as businesses focused on cost saving measures. While factors such as recession, pay cuts, layoffs and recruitment freezes have forced companies to opt for outsourcing, the desire to improve overall business efficiencies and effectiveness is also a critical driving force for outsourcing arrangements. The focus is also on reducing risk and accelerating product development time by using the services of external expert professionals. In view of economic adversities, nearshore facilities are finding greater acceptance among organizations owing to ideal costs, as well as similar cultural and language skills, a trend that is proving beneficial for BPO providers from Latin American countries, specifically Mexico. Asia Pacific is poised to register the fastest compounded annual growth rate of more than 16% over the analysis period.
Growth in Logistics, which represents the largest BPO segment, is dependent on a combination of demand side and supply side factors. With respect to demand, factors include globalization, increased outsourcing of manufacturing functions, increased dependence on suppliers, development of direct-to-customer channels and speed of marketing that are making logistics management more and more complicated. On the supply side, logistics BPO services are becoming more and more comprehensive, as service providers improve their capabilities in terms of technology. Asia-Pacific represents the largest logistics BPO market worldwide.
With the global businesses adopting a transformational approach to outsourcing, Human Resource Outsourcing (HRO) is finding favor amongst clients. In view of the recession, single-process HRO agreements are likely to gain traction in the short-term future, with businesses exhibiting aversion to multi-process deals requiring large upfront investment. The recession has had significant impact on multi-process HRO deals, owing to the longer payback period associated with such multi-processing agreements compared to other forms of outsourcing arrangements. The scenario is expected to change with recovering economic conditions and improving financial position of businesses. The recession has also enhanced the popularity of platform-based pay-as-per-use outsourcing solutions. The US represents the largest HR outsourcing market worldwide.
Major players profiled in the report include Accenture, Amdocs Limited, Ceridian Corporation, CGI Group, Computer Sciences Corporation, Convergys Corporation, HP Enterprise Services, Hewitt Associates LLC, Intelligroup Inc., Keane Inc., Sapient Corporation, Spherion Corporation, Tata Consultancy Services Limited, and Unisys Corporation.
The research report titled "Business Process Outsourcing (BPO): A Global Strategic Business Report" announced by Global Industry Analysts Inc., provides a strategic review of the industry, key market trends, recent strategic corporate initiatives, and profiles of key market participants. The report provides annual sales estimates and projections for the years 2007 through 2015, and 2000 to 2006 by the following geographic markets - US, Canada, Europe, Asia-Pacific, and Rest of World. Key segments analyzed include Logistics, Sales & Marketing, Customer Care, Finance & Accounting, Human Resource, and Other Services.