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Worldwide BPO Market Steadily Expands

    Online News published in DMReview.com
October 31, 2005

According to a newly released IDC study, the worldwide BPO market is vibrant and brimming with opportunity. The comprehensive BPO report finds that worldwide BPO spending will experience a five-year compound annual growth rate (CAGR) of 10.9 percent, growing from $382.5 billion in 2004 to $641.2 billion in 2009. This forecast covers eight BPO markets: human resources, procurement, finance & accounting, customer service, logistics, sales & marketing, product engineering, and training.

"The BPO market continues to gain momentum and present growth opportunities for service providers," said Romala Ravi, program director for BPO Services research at IDC. "Companies' expectations and demands continue to escalate, and companies are becoming more savvy about their options. In this environment - where clients drive vendor strategies - success in clinching and executing on deals will depend on vendors' ability to meet client demand where it's at, empower clients, and present flexible contracting structures."

The study compares and contrasts BPO spending and growth projections across the eight BPO markets. The study also identifies and evaluates key buyer and vendor trends that are shaping BPO spending intentions for each BPO market. Key findings from the study include:

  • The BPO market worldwide is experiencing robust growth
  • Some of the more mature segments such as customer care and logistics continue to hold strong, and present pockets of new opportunity and growth
  • Emerging markets such as procurement and training, though starting off from a small base, will experience high double-digit year-to-year growth in BPO spending over the five-year forecast period
  • Markets with a strong history of discrete, high-volume processing services such as human resources, and finance & accounting, are seeing great momentum around comprehensive BPO evaluation and adoption

In line with the market size spending projections, there are dramatic shifts in buyer and vendor trends. Buyers are moving beyond the "salvage" mode associated with the early 2000s and are looking to BPO to establish competitive differentiation and leadership. Their expectations of vendors are changing, deals signed are becoming more comprehensive, and buyer involvement in BPO deal-making is becoming more pronounced. On the vendor side, new types of players are seeing a role for themselves in this market. This in turn is impacting vendor business models and strategies, and is influencing the types of investments vendors must make to build and strengthen their BPO portfolios.

The IDC study, "Worldwide and U.S. BPO 2005-2009 Forecast: Market Opportunities By Horizontal Business Functions" presents the annual update to the five-year forecast for the worldwide and U.S markets for BPO services. Data is also provided for both the U.S. and the worldwide markets, providing a macro-region top-line view and a deeper dive into the U.S. market.

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For more information on related topics visit the following related portals...
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