The worldwide business process outsourcing (BPO) market is forecast to grow 6.3% in 2011 and 5% in 2012, according to a study by market research firm Gartner.
While growth remains strong in developing economies, the world’s largest BPO market, US, presents a mixed picture for the global market, and the BPO outlook is mixed in developed economies, resulting in a tempering of growth expectations.
The study revealed 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.
The report also sees an increase in transaction volume, especially in payroll, recruiting, accounts payable, and customer data analytics and knowledge process outsourcing (KPO) activities.
Gartner estimates that North America’s BPO market will grow 3.8% in 2011, and Canada has also seen major BPO initiatives throughout the decade in the energy sector, as well as an active domestic BPO service provider market.
In Western Europe, Gartner estimates that the BPO market will grow by 8.9% in 2011 due to demand for services relating to customer management, finance and accounting and human resources.
In Europe, Gartner does not see a major wave of deals being brought back in-house, while for newer services including KPO, there is demand for legal process outsourcing, particularly in the UK.
Continental Europe has seen demand primarily for payroll services, increasingly with a multicountry service requirement, contact centre BPO, and industry-specific processes such as banking and road tolling.
Gartner sees the challenges of overcoming language requirements, labor laws and trade unions, and a lack of labor arbitrage benefits as limiting the adoption of many types of BPO in continental Europe.
The outlook for Asia/Pacific’s market remains positive, with growth expected to be 17.9% in 2011.
Most growth will centre on the key regional economies of India, Australia and China, driven by the infusion of best-of-breed processes and technology, faster time-to-market and improved quality of service, though Japan’s BPO market will decrease 0.9% in 2011.
Despite the slight slow growth of Latin America’s IT services industry in 2009, Gartner estimates that the region’s BPO market to grow by 14.7% in 2011, as BPO continues to be adopted by the domestic and Latin American subsidiaries of global corporations.
