Business Process Outsourcing - A World Market Analysis

Business Process Outsourcing - A World Market Analysis

With the development of the business process outsourcing market, service providers are experiencing increasing growth opportunities. Demand of companies is on the rise along with the expectations of the clients. Execution of deals depends on the ability of companies to meet client demands. Future of business process outsourcing depends on investments made by vendors and the relationship of vendors with clients.

There is an increase in outsourcing of key business functions and related IT operations, as companies intend to get the right things done for less money. Usually, processes that are outsourced include those, which are necessary but provide no competitive edge. Outsourced business processes include administration, billing, payroll, training, HR functions and logistics management. With increase in mergers, acquisitions, competition and globalization, BPO industry is expected to witness higher demand for new applications and advanced systems leading to growth in the outsourcing market.

These and other market data and trends are presented in "Business Process Outsourcing: A World Market Analysis" by BizAcumen, Inc. Our reports are designed to be most comprehensive in geographic coverage and vertical market analyses

BUSINESS PROCESS OUTSOURCING BMR-6002


CONTENTS


1. METHODOLOGY 1
Study Reliability and Reporting Limitations 1
Disclaimers 2
Quantitative Techniques & Reporting Level 3

2. GLOBAL MARKET OVERVIEW AND OUTLOOK 4
Market Scenario 4
Business Process Outsourcing Market: A Primer 4
Change in Market Scenario with Outsourcing 5
Major Threats 6
Competition in the BPO Vendor Market 6
Egypt to be Emerging Destination for IT outsourcing and BPO 6
Key Industry Segments 6
Worldwide Logistics BPO Market 6
Customer Care Services 7
Growth of Finance and Accounting Outsourcing Market Worldwide 7
HR Business Processes Outsourcing Market 8
One-Stop-Shop for Complete HR Outsourcing Draws Appeal 9
Building Up the Right Team Essential for Successful HR BPO
Outsourcing 9
Procurement BPO Market 10
Increased Demand for Procurement BPO 10
Consulting Services Market 10
Future of Outsourcing - A Global Outlook 11

3. MARKET TRENDS 12
BPO Market and its Growth 12
Emerging Markets Spur Growth 12
Outsourcing Taps New Benefit Areas 12
Emerging Trend Towards Automation 12
Offshore Outsourcing of Call Centers Gains Ground 13
Offshore BPO Driving Cost-Effectiveness 13
BPO - Transitioning 14
De-Stressing of Voice in Call centers 14
Captivation of the Voice 14
Back Office Transactions 14
BPO Moving Towards Multiple Process Outsourcing 14
Shift Towards BPO 14
BPO Market on a High Note 15
Seeking Support from Third-Party Consultants: A Growing Trend 16
Factors Driving Growth 16
Changing Business Perspectives 16
Widening of Scope of New Segments 16
Further Expansion in Established Segments 16
Multi-Process BPO - A Key Growth Driver 17
Impact on Software Enterprises 17
Major Obstacles 17
Pricing Pressure Continues 17
US Slowdown Places BPO in Consolidation Mode 17
Vendor Capacity - an Important Inhibiting Factor 18
Differences in Growth Trends by Geography and Market Segment 18
IT & BPO firms to Realign Its Service Delivery Operations 19
Demand for BPOs that Bring About Transformational Change 19
Implementation Risk in Transformational BPO 20
Trends in Key Industry Segments 20
Financial Services 20
Finance & Accounting Outsourcing - The Dynamic BPO Segment 20
Financial BPO Segment to Witness Robust Growth 21
Trends in HRO 22
HRO - A High-Profile BPO Segment 22
Multiple-Process and Total Human Resource Outsourcing to
Keep Growing 22
Increasing "Commoditization" in HR Functions 22
Senior HR Executives to Play Decisive Roles in HRO
Implementation 22
Small and Medium Enterprises to Expand HRO Services Usage 23
Sole Sourcing - A Potential HRO Model to Increase
Operational Efficiency 23
HRO Demonstrates Vibrant Growth 23
Outsourcing in HR to Increase 24
Procurement Service Outsourcing 25
The Global Procurement BPO Market - An Overview 26
Demand Uptake in Procurement BPO Market 26
Procurement BPO Market - Key Demand Generators 27
Procurement BPO Market - Key Players 27
Major Challenges Faced by Procurement BPO Vendors 27
Knowledge Process Outsourcing 28
Challenges in KPO 28
Changing BPO Buyer and Vendor Roles 29
Spending Trends by Segment 29
BPO Market Trends - Recent Past Perspective 29
Pricing Trends 29
BPO Sales Cycle 29
The Range of Multishore BPO Expands 30
Outsourcing Transactions Grow, While Value Takes a Plunge 30
Maturing Market to Drive Trend for Consolidation 30
Changing Perceptions 30
Outsourced Functions and Growth Sectors 31
Advantage of Integrators 32
Buyer and Vendor Relationships 32
Europe Surpasses US in Large Outsourcing Contracts 32
Market Players 32
HR BPO Gaining Rapid Ground 33
Offshoring and Nearshoring 33
Key Factors Influencing Outsourcing 34
Advantages and Downsides of Outsourcing 34
Outsourcing Model Under Transformation 35
Location - A Key Factor Influencing Outsourcing Decisions 36
OTC Technology Creating New Avenues in B2B Billing Outsourcing 37
On-Demand Services Picking up Momentum 37
Major Outsourcing Destinations for Global Companies 37
Client Base of Outsourcing Business 38
Countries with Potential Capabilities to Challenge India’s
BPO Supremacy 38
Outsourcing Challenges 39

4. SERVICE FACTS 39
Business Process Outsourcing (BPO) 39
Planning for BPO 40
Cost Savings in BPO 40
Types of BPOs 40
Onsite Business Process Outsourcing 40
Offsite Business Process Outsourcing 41
Offshore Business Process Outsourcing 41

5. CORPORATE DEVELOPMENTS 42
BancTec Acquires DocuData Solutions 42
Genpact Acquires Majority Stake in Citigroup 42
Aegis BPO Takes Over AOL Call Center 42
NCO Group Completes Acquisition of Outsourcing Solutions 42
Accenture Acquires Gestalt 43
Affiliated Computer Services to Take Over CompIQ 43
Affiliated Computer Services Takes Over Communications
Development 44
Accenture Inks Agreement to Take Over AddVal Technology 44
HP to Take Over EDS 44
Hewitt Announces Acquisition of LCG 45
South West Water and Accenture Enter into Outsourcing Agreement 46
Eisai Inks Outsourcing Agreement with Accenture 46
Accenture Enters into BPO Services Agreement with CNA Financial 46
ACS Renews Contract with Weld County 47
Baltimore Gas Selects Accenture to Rollout Smart Energy Savers
Program 47
The US Department of VA Selects EDS to Support Combat Veteran
Call Center 47
Scripps Selects ADP for Providing BPO Services 48
TCS Bags Multi-Year IT Outsourcing Contract 48
TCS Subsidiary Receives Contract for BPO Services from Sun
Life Financial 48
TeleTech Inks Multiyear Service Contract with JNET 48
StarTek Renews Agreement with a Communication Company 49
HP Bags a Long-Term Contract from Tribune Publishing 49
ACS Receives a Supply Contract from CAQH 50
ADP to provide HR BPO Services to Sodexo 50
Convergys Enters into Agreement with a Financial Services Company 50
Convergys Enters into Contract with Avaya 51
CSC Wins Contract from Zurich Financial Services 51
CSC Signs BPO Contract with Wilton Re 51
CSC Enters into Contract with GSA 52
CSC Bags Contract from Eaton 52
TCS Renews Contract with Virgin Atlantic 53
Spherion and United Airlines Renew Contract for Recruitment
Outsourcing 53
Harvard Pilgrim Extends Agreement with Perot Systems 53
CGI Extends Contract with Océ North America 54
Spherion to Expand RPO Operations 54
Tata to Set-up Rural BPO Unit in Orissa 54
Perot Systems to Establish Infrastructure, IT services and BPO
Division in Coimbatore 54
Accenture Announces its Procurement BPO 54
CGI Announces Merger of its Insurance Divisions 55
Spherion to Acquire Technisource 55
Gevity Announces Acquisition of HRAmerica 56
ACS Announces Acquisition of Albion 56
Convergys Acquires AOL Contact Center 57
Adaptis Inks Partnership with Kaye-Smith 57
Adaptis Signs BPO Alliance with Clear Choice Health Plan 57
Accenture Signs Outsourcing Agreement with AIG 58
Accenture and Microsoft Enter into an Outsourcing Agreement 58
Accenture and BT Enter into an Outsourcing Agreement 59
Washington Gas Signs Agreement with Accenture 59
Accenture and United Utilities Enter Outsourcing Agreement 59
Convergys Inks Contract with Johnson & Johnson 59
Convergys and Fifth Third Bancorp Renews Contract 60
Convergys and Rosetta Stone Sign Contract 60
CGI Renews Agreement with The Commerce Group 61
ACS Renews Contract with PERSI 61
ACS Inks Deal with Safety-Kleen 62
CSC Enters into a BPO Contract with UKvisas 62
CSC Secures a Contract from DHS to Develop IDDMP for USCIS 62
CSC Wins BPO Contract from Universal for Providing Banking
Services 63
CSC Wins BPO Services Contract from Chubb 63
CSC Obtains an Eagle Task Order from USCIS 64
Hewitt Contracts with Rogers 64
Intelligroup Contracts with eXpertivity 65
TCS Contracts with Hawaiian Airlines 65
EDS Inks Agreement with Telekomunikacja 66
TCS Enters into an Agreement with Pichincha 66
Computer Sciences Enters Multi-Year BPO Agreement with Northstar 67
Convergys to Provide Marketing Research for a Global Financial
Firm 67
Convergys Enters into Agreement with Telecom Egypt 68
Convergys Enters into Contract with Starbucks 68
CSC Expands Contract with John Hancock 68
Rabobank Extends BPO Contract with Unisys 69
CSC Extends Outsourcing Contract with Swiss Re 69

6. MAJOR PLAYERS 70
Accenture (USA) 70
Adaptis, Inc. (USA) 70
Aegis InterWorld, Inc. (USA) 70
Affiliated Computer Services (USA) 70
Amdocs Limited (USA) 70
Ceridian Corporation (USA) 70
CGI Group (Canada) 71
Computer Sciences Corporation (USA) 71
Convergys Corporation (USA) 71
Electronic Data Systems Corporation (USA) 71
Gevity HR, Inc. (USA) 72
Hewitt Associates, LLC (USA) 72
Intelligroup, Inc. (USA) 72
KARVY Global Services Limited (India) 72
Keane, Inc. (USA) 72
Perot Systems Corporation (USA) 73
Sapient Corporation (USA) 73
Spherion Corporation (USA) 73
StarTek, Inc. (USA) 73
Tata Consultancy Services Limited (India) 74
Intelenet Global Services Pvt. Ltd. (India) 74
Unisys Corporation (USA) 74

7. MARKET ANALYTICS 75

8. THE UNITED STATES 82
Market Overview and Outlook 82
Human Resources Outsourcing - A Highly Lucrative and Rapidly
Growing Segment 82
Key Issues in HRO 83
The US Imaging and Document Management Outsourcing Market 84
The Offshoring Advantage 84
Offshoring Challenges 85
The Right Strategy for Offshoring 85
Procurement BPO Market 85
HR Outsourcing - The Fastest Growing BPO Domain 86
Outsource to Remain Competitive 86
Factors Compelling US Businesses to Move to Offshore BPO Sector 87
The Trend for Relocating 87

9. CANADA 89
Market Overview and Outlook 89

10. EUROPE 91

a. France 96

b. Germany 97

c. The United Kingdom 98

d. Rest of Europe 101

11. ASIA-PACIFIC 104
Asia-Pacific Market for BPO 104
Asia-Pacific Registers High Growth in Outsourcing 105
HR Outsourcing to Expand 105
India - A Key Destination for Outsourcing in Asia-Pacific 105
The BPO Industry - Year 2008 105
Outsourcing Remains Strong Despite Margin Pressures 105
Smaller Companies Under Intense Pressure 106
Vendors Call for Economies of Scale 106
BPO Sector Eyes Smaller Cities 107
Players to Witness Diversified Client Base 107
Domestic Market Depicts Signs of Waking Up 107
Mid-Market - the Next Big Stop 107
The Integration of Software and BPO 108
KPO Industry Gains Efficiency 108
IT and BPO Sector to Register High Growth 108
The IT-BPO Sector Flourishing in India 109
The Indian Edge in the Global BPO Market 110
Factors Underpinning the Indian ITES-BPO Exports 111
Large English Speaking Cohort 111
Standard Security Setting 111
Focus on Premium Quality 111
Enabling Policy Setting 112
Low-Cost Advantage 112
Accelerating Business Infrastructure 112
More Foreign Language Jobs to Create Need for Foreign
Language Professionals 112
Indian Outsourcing Market 113
Indian BPO Market in Boom 113
India Leads in BPO Transactions 113
Year 2008 - Assumes Greater Importance for the BPO Sector 115
Indian Procurement Service Outsourcing 115
India Becomes Global BPO Publishing Hub 115
US Mortgage Outsourcing Opportunity for India 116
Indian BPOs Under Pressure, as Tier-Two Players Gain Ground 117
Tier-One Suppliers Face Troubled Waters 117
North East India Entices BPO Firms 118
Market Competition 118
Tier-Two Players Drive on Uneven Ground 119
BPO Leader - Today India, Tomorrow ? 119
India BPO Sector En Route to Growth Despite Odds 120
BPO Market All Set to Target Finance Sector 120
Indian IT Vendors Target to Increase BPO Market Share 121
Captive Players Dominate BPO Services Market 122
Indian BPO Industry to Face Shortage of Labor 123
India to Lose Dominance in Future 123
Indian Vendors Eye Domestic Potential 124
Government Eases Policies, Allows Sharing of Facilities for
Daytime Processes 124
Indian Government’s New Regime Strengthens Domestic BPO Market 124
India’s Competitive Stance Expected to Weaken 125
Indian Vendors Target US Healthcare Sector 125
Increasing Opportunities for Chartered Accountant in India 126
Financial Companies Plan End-to-End Outsourcing 126
US Healthcare Industry Opens Door to Indian BPOs 126
BPO-IT Companies Venture into KPO Business for Higher Returns 127
Indian BPO Market 127
Indian BPO Industry Outlook 128
Infrastructure and Staff Constraints 128
Growth Prospects 128
Indian BPO Clients Prefer Integrated IT-BPO Services 128
Rising Rupee Strongly Impacts the BPO Sector 129
Role of Indian Suppliers in the Domestic Market 129
The Competition Ahead 130
Issues Affecting the Industry 131
Attrition - The Bane of Indian BPO Sector 131
India Faces Increasing Challenge in Global BPO Market 132
India to Suffer Erosion in BPO Market Share 132
Challenging Attrition 133
The Emergence of Indian BPO in the Global Scene 133
Changing Trends of Indian BPO Sector 134
Indian Back-Office Service Providers Eye Overseas Markets 134
Educational Segment Opens New Grounds 134
India Dominates Worldwide Offshore Segment 135
Growth of the Offshore Market 135
Consolidation and Fragmentation Go Parallel 136
Multinationals Threaten Dominance of Indian Players 136
Opportunities for Indian Vendors 136
Philippines 137
The Philippines BPO Market 137
Philippines BPO Industry to Record Improved Growth 138
Philippines Eyes US BPO Market 138
Strengths of Philippines 138
Philippines to Tap Australian BPO Opportunities 139
The Singapore BPO Market Scenario 139
China to Support BPO Development 139
Malaysian BPO Sector 140
Singaporean BPO Sector 140
The Thailand BPO Sector 140

12. REST OF WORLD 142
Outlook 142
Brazil 142
Chile 142
Israel 142
Egypt: An Emerging Market 143
Africa 143
South Africa 144
Service Overview 145
Current Scenario 145
Growth Strategies 146
Outlook 146
Call Centers Dominate the BPO Scene 147
Team SA - A Group Effort to Boost Domestic BPO Market 147


EXHIBITS

Table 1: Global Business Process Outsourcing Market by Region
for the Period 2007-2015 (Sales in US$ Billion)

Table 2: Percentage Breakdown of Global Business Process
Outsourcing Market by Region for the Years 2008 & 2012

Table 3: Global Logistics Outsourcing Market by Region for the
Period 2007-2015 (Sales in US$ Billion)

Table 4: Percentage Breakdown of Global Logistics Outsourcing
Market by Region for the Years 2008 & 2012

Table 5: Global Sales and Marketing Outsourcing Market by
Region for the Period 2007-2015 (Sales in US$ Billion)

Table 6: Percentage Breakdown of Global Sales and Marketing
Outsourcing Market by Region for the Years 2008 & 2012

Table 7: Global Customer Care Outsourcing Market by Region for
the Period 2007-2015 (Sales in US$ Billion)

Table 8: Percentage Breakdown of Global Customer Care
Outsourcing Market by Region for the Years 2008 & 2012

Table 9: Global Finance and Accounting Outsourcing Market by
Region for the Period 2007-2015 (Sales in US$ Billion)

Table 10: Percentage Breakdown of Global Finance & Accounting
Outsourcing Market by Region for the Years 2008 & 2012

Table 11: Global Human Resource Outsourcing Market by Region
for the Period 2007-2015 (Sales in US$ Billion)

Table 12: Percentage Breakdown of Global Human Resource
Outsourcing Market by Region for the Years 2008 & 2012

Table 13: Global Other Business Process Outsourcing Market by
Region for the Period 2007-2015 (Sales in US$ Billion)

Table 14: Percentage Breakdown of Global Other Business
Process Outsourcing Market by Region for the Years 2008 & 2012

Table 15: Business Process Outsourcing Market by Service
Segment in the US: 2007-2015 (Sales in US$ billion)

Table 16: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in the US for the Years 2008 & 2012

Table 17: Business Process Outsourcing Market by Service
Segment in Canada: 2007-2015 (Sales in US$ billion)

Table 18: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Canada for the Years 2008 & 2012

Table 19: Business Process Outsourcing Market by Region in
Europe: 2007-2015 (Sales in US$ billion)

Table 20: Percentage Breakdown of Business Process Outsourcing
Market by Region in Europe for the Years 2008 & 2012

Table 21: Business Process Outsourcing Market by Service
Segment in Europe: 2007-2015 (Sales in US$ billion)

Table 22: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Europe for the Years 2008 & 2012

Table 23: Business Process Outsourcing Market by Service
Segment in France: 2007-2015 (Sales in US$ billion)

Table 24: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in France for the Years 2008 & 2012

Table 25: Business Process Outsourcing Market by Service
Segment in Germany: 2007-2015 (Sales in US$ billion)

Table 26: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Germany for the Years 2008 & 2012

Table 27: Business Process Outsourcing Market by Service
Segment in the UK: 2007-2015 (Sales in US$ billion)

Table 28: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in the UK for the Years 2008 & 2012

Table 29: Business Process Outsourcing Market by Service
Segment in Rest of Europe: 2007-2015 (Sales in US$ billion)

Table 30: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Rest of Europe for the Years 2008
& 2012

Table 31: Business Process Outsourcing Market by Service
Segment in Asia-Pacific: 2007-2015 (Sales in US$ billion)

Table 32: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Asia-Pacific for the Years 2008 &
2012

Table 33: Business Process Outsourcing Market by Service
Segment in Rest of World: 2007-2015 (Sales in US$ billion)

Table 34: Percentage Breakdown of Business Process Outsourcing
Market by Service Segment in Rest of World for the Years 2008
& 2012


COMPANIES PROFILED