The BPO Market

September 13, 2007

Rapid transformation is taking place in the global BPO market. It is accompanied by increased spending in BPO services. Most of the leading business companies of the world are adopting BPO as a strategic business solution. The BPO industry is very diverse, with several sub-segments, each displaying its own unique characteristics.

According to Gartner, a market research firm, the size of the global BPO market by 2007 would be $173bn, of which $24.23bn would be outsourced to offshore contractors. Of this, India has the potential to generate $13.8bn in revenue. The projection includes revenues of pure play Indian BPO service providers, captives operations of MNCs operating in India, third party service providers and BPO subsidiaries of IT services firms.

North America will remain the dominant market for ITES-BPO services, accounting for nearly 60 percent of the total ITES-BPO market in 2006. The main verticals in the North American ITES-BPO market are telecommunications, financial services, health care and energy. Commonly outsourced processes include internal auditing, payroll, human resources, benefits management, contact centers/customer care, payments/ claims processing, real estate management, and supply chain management.

The Western Europe ITES-BPO market is expected to account for 22 percent of the market by 2006. The financial services sector is the largest consumer of BPO-ITES services in Europe, followed by utilities and telecommunications. Human resources, finance and accounting are expected to be the fastest growing service lines.

The Asia Pacific ITES-BPO market is expected to account for 18 percent of the total ITESBPO market in 2006. Companies in the Asia-Pacific region have traditionally outsourced only manufacturing activities. Given the relative infancy of the ITES-BPO market, this region is expected to experience rapid growth over the next few years. Growth will primarily be driven by cost-reduction and the need to focus on core competencies. HR, finance and accounting are expected to be the key growth areas in the Asia-Pacific region in the years ahead.

(Source- BPO India)


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