The BPO Market Outlook: Changing Competitive Dynamics, Key Players and Best Practices

Business Process Outsourcing (BPO) is the fastest growing segment of IT outsourcing, as organizations see the opportunity it offers to outsource business processes with the following benefits: the ability to focus on core competencies; cost savings; improved business process quality; flexibility in terms of technology; and reduced time to market.

‘The BPO Market Outlook’ is a new management report that provides an introduction to horizontal BPO - such as CRM, human resources, finance and accounting, and procurement - profiling the major players, analysing market trends and outlining best practices to provide organizations with a platform for making the right BPO decisions. This new report will enable you to assess the BPO market and develop specific competitive strategies to increase efficiency and productivity whilst reducing costs.

Key Findings of this Report:

- The market for F&A BPO is set to grow from $13.9 billion in 2005, to over $18.5 billion in 2008, at a CAGR of 10%.
- BPO can lead to savings of up to 30%, which can increase to 50% if the outsourced work is offshored.
- The BPO market is the single fastest growing area of the IT services sector. Growing 8% annually, spending on BPO services is expected to grow from $112.1 billion in 2005 to $144 billion in 2008, an increase of 40%.
- F&A BPO is mainly a labor arbitrage play, which means the barriers to entry are lower and Indian offshore providers have been able to gain a strong foothold in the market.
- The HRO market is predicted to grow from just under $23 billion in 2004 to over $30 billion in 2008, at a CAGR of 7%.
- Procurement outsourcing (PO) is starting to gain market traction.
- India remains the largest provider of offshore BPO services, accounting for nearly half of the global offshore BPO market. However, China is expected to grow rapidly.

This Report will Enable you to:

- Anticipate future risks by assessing the benefits and risks of outsourcing business processes, in terms of the type of process that should be outsourced, the capabilities of service providers and location of service provision analysed in this report.
- Develop successful competitive strategies, penetrate the market and increase market share using our best practice advice and recommendations for companies considering BPO and the forecast for market growth in each BPO sector.
- Make informed decisions by recognizing the market dynamics shaping the BPO market, and how that affects your BPO strategies through an analysis of the market trends, drivers and inhibitors that are influencing the BPO market and its horizontal sub-sectors.
- Create a competitive advantage by understanding the vendor competitive dynamics in each horizontal BPO function using the competitive analysis and profiles of the main vendors within this report.

Key Questions Answered in this Report:

- Which are the fastest growing BPO sub-sectors, and why ?
- Should outsourcing be based on financial or strategic considerations?
- What are the real risks surrounding finance and accounting BPO?
- Which business processes should be outsourced?
- How mature is each BPO sub-sector?
- When choosing a BPO provider, what are the most important factors to consider ?
- Which location to choose for offshore BPO?
- What type of BPO contract is most suited to your organization?
- Why is recruitment outsourcing making waves in the BPO industry?
- Which are the most established service providers in each BPO sub-sector? SHOW LESS READ MORE >

The BPO Market Outlook

Executive Summary
An introduction to business process outsourcing (BPO)
Customer relationship management BPO (CRM BPO)
Finance and accounting BPO (FAO)
Human resources BPO (HRO)
Procurement BPO (PO)
Offshore BPO
BPO best practice

Chapter 1 An introduction to Business Process Outsourcing
Summary
Purpose of this report
Introduction to outsourcing
Business process outsourcing
Benefits
Risks
Introduction to horizontal BPO
Customer relationship management (CRM) BPO
Human resources BPO (HRO)
Finance and accounting BPO (FAO)
Procurement BPO (PO)
Offshore BPO
Market dynamics
Market sizing
BPO market conclusions

Chapter 2 Customer relationship
management BPO
Summary
Introduction to CRM BPO
Drivers
Inhibitors
Market dynamics
Market background
Market sizing
Major contracts
Competitive dynamics
Accenture
Affiliated Computer Services (ACS)
Agilsys
Atos Worldline
beCogent
Capita Group
Convergys
EDS
IBM Global Services
ICICI OneSource
Minacs Worldwide
Perot Systems
Xansa
Recommendations

Chapter 3 Finance and accounting BPO
Summary
Introduction
Market overview
Market sizing
Major contracts
Competitive analysis
Accenture
Affiliated Computer Services
Agilisys
Capgemini
CGI Group
Convergys
EDS
Genpact
HP Services
IBM GS
Infosys
Tier Technologies
Vertex
Unisys
WNS Global Services
Xansa
Recommendations and FAO best practice
Vendor selection (minimizing risk)

Chapter 4 Human resources BPO
Summary
Introduction to HRO
Market overview
Hot topics
Capacity and pricing
Rise of multi-service deals, and offshore delivery
Mid-market moves
M&A not as expected
Rise of recruitment BPO (RPO)
Market dynamics
Market sizing
Major contracts
Competitive dynamics
Accenture HR Services
Affiliated Computer Services (ACS)
ADP (Employer Services)
Capita Group
Capgemini
Ceridian Corp
Convergys
EDS (ExcellerateHRO)
Fujitsu Services
Hewitt Associates
HP Services
IBM GS
SAP
Other
Recommendations and HRO best practice
Change management
When is HRO right for the organization?
Overcoming reluctance to outsource

Chapter 5 Procurement BPO
Summary
Introduction to Procurement BPO
Benefits
Market dynamics
Competitive analysis
Accenture
Ariba
IBM GS
ICG Commerce
Recommendations and PO best practice

Chapter 6 Offshore BPO
Summary
Introduction Offshore BPO
Market context
Indian services providers
Competitive analysis
Accenture
Cognizant Technology Solutions
EDS (Mphasis)
Genpact
HCL Technologies
ICICI One Source
IBM (Daksh)
Infosys Technologies
Tata Consultancy Services
Transworks Information Services
Wipro Technologies
WNS Global Services
Xansa
Recommendations and offshore BPO best practice
Vendor selection
Pick the Country First
Recommendation
Domain & Technical Filtering
Preparation and execution
Engagement issues

Chapter 7 Best practice BPO
Summary
Introduction
The three basic value propositions of BPO
Cost reduction
Core competency
Transformation
Key business and technological issues in BPO
Transformation: who, how and when?
How does application infrastructure need to evolve to enable BPO?
The vertical credibility challenge
The BPO maturity model
Pre-BPO
Lift-out stage
Shared services stage
Utility stage
BPO contracts
BPO benefits
BPO market segments
Glossary
Index

List of Figures
Figure 1.1: BPO market sizing ($m), 2004-2008
Figure 2.2: Accenture’s customer contact value proposition
Figure 3.3: Finance and accounting outsourcing
Figure 5.4: Procurement outsourcing
Figure 6.5: Indian BPO revenues and headcount, 2004-2006
Figure 6.6: Horizontal BPO in India in 2005
Figure 6.7: Accenture global delivery network, 2005
Figure 7.8: The three underlying value propositions of BPO
Figure 7.9: Market maturity model for BPO

List of Tables
Table 1.1: Top 10 fastest growing IT services providers, 2005
Table 1.2: Top 10 services providers by profit margin, 2005
Table 1.3: Largest BPO contracts in last 12 months, (to 30 June 2006)
Table 1.4: BPO market sizing ($m), 2004-2008
Table 2.5: Customer care BPO market sizing ($m), 2004-2008
Table 2.6: Major CRM BPO contracts in last 12 months (to 30 June 2006)
Table 3.7: Finance & accounting BPO market sizing ($m), 2004-2008
Table 3.8: Major FAO contracts in the last 12 months (to 30 June 2006)
Table 4.9: Major contracts in the development of HRO, 1999-2005
Table 4.10: HRO market sizing ($m), 2004-2008
Table 4.11: Major HRO contracts, 2005-2006 (to 30 June 2006)
Table 5.12: Key contracts in procurement BPO
Table 6.13: Top 10 services providers by profit margin, 2005

- Capita Group
- Capgemini
- Ceridian Corp
- Convergys
- EDS (ExcellerateHRO)
- Fujitsu Services
- Hewitt Associates
- HP Services
- IBM GS
- SAP