Gartner predicts growth in BPO market

Research firm expects global growth of 6.3%, 17.9% growth in Asia/Pacific

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Gartner predicts growth in BPO market Gartner has predicted that the BPO sector will grow 6.3% globally in 2011.
By  Georgina Enzer Published  August 22, 2011

The global business process outsourcing (BPO) market is predicted to grow by 6.3% in 2011 and 5% in 2012, according to studies conducted by Gartner.

The outlook of BPO in developing economies is mixed, which has tempered growth expectations.

"While growth remains strong in developing economies, the United States, the world's largest BPO market, presents a mixed picture for the global market," said Cathy Tornbohm, research vice president at Gartner. "Emerging markets are faring far better and, generally, multinational companies continue to look to BPO as a means both to reduce costs and to buoy their business operations during the protracted return to a growth environment. We also see an increase in transaction volume, especially in payroll, recruiting, accounts payable, and customer data analytics and knowledge process outsourcing (KPO) activities."

Gartner said that there will be 3.8% growth in the BPO market in North America in 2011, the US is the largest and most established market for BPO.

Key vertical markets poised for industry-specific BPO growth through 2014 in North America are retail, healthcare, transportation and utilities.

Dynamic growth is expected for customer selection in the customer relationship management (CRM) and human resources (HR) domains.

In Western Europe, the BPO market will grow 8.9% according to Gartner, as demand for services relating to customer management (CM), finance and accounting (F&A) and HR BPO continues to grow.

In Europe, Gartner does not see a major wave of deals being brought back in-house. For newer services, such as KPO, there is demand for legal process outsourcing, particularly in the UK. Continental Europe has seen demand primarily for payroll services, increasingly with a multi-country service requirement, contact centre BPO, and industry-specific processes such as banking and road tolling.

Gartner predicts that the BPO market will grow 17.9% in the Asia/Pacific's BPO market in terms of U.S. dollars.

Gartner expects higher demand for services related to CM BPO, HR outsourcing, F&A outsourcing, banking and financial BPO services, billing BPO services and supply management BPO through 2015.

India, Australia and China are the key growth economies for this sector.

Gartner estimates that Japan's BPO market (expressed in yen) will decrease 0.9% in 2011 due to the impact of the March earthquake.

Gartner has said that overall the Latin American adoption of BPO will grow through 2015, despite a slow-down in 2009.

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