Offshore BPO booms

Offshore business process outsourcing (BPO) is expected to reach US$3 billion in 2004, according to analysts at Gartner Group.

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By  Matthew Southwell Published  June 2, 2004

Offshore business process outsourcing (BPO) is expected to reach US$3 billion in 2004, according to Gartner Group. This figure represents a 65% increase from the 2003, when the offshore BPO market totalled US$1.3 billion. Despite this growth, the analyst house believes the offshore BPO market will not sustain such high revenue increases in the future. Furthermore, Gartner reports that offshore BPO is expected to represent only 2.3% of the total BPO market this year. “Offshore BPO is an emerging, but immature, opportunity,” says Robert Brown, principal analyst for Gartner’s sourcing group. “There will be slower adoption of offshore BPO through 2007. As the service delivery matures, and as users and service providers overcome various operational, cultural and socio-political issues, growth will resume toward the end of the decade and will synchronise more with overall BPO growth,” he adds. Gartner analysts believe the vast majority of offshore BPO is around contact centres, including voice, e-mail and chat, and the remainder for back-office transaction processing services. However, the analyst house says users looking to avail themselves of these services must not neglect to map the entire customer process, particularly the intersection between the parts that are outsourced and the functions that are retained. “The recommended plan for a successful outsourcing relationship is careful planning, integration, and management of outsourced channels, functions or processes, where they remain part of the enterprise-wide strategy for customer service,” says Brown. “To build successful service delivery, clients and outsourcers must understand the entire process and clearly articulate who is responsible for which piece to ensure that nothing falls through the cracks,” he adds.

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