The Hindu Business Line : BPO revenues to touch $134 b in 2005: Gartner

WORLDWIDE revenue in business process outsourcing (BPO) is projected to reach $133.7 billion in 2005, an 8 per cent increase from the 2004 revenue of $123.8 billion, according to a Gartner study.

"A year ago, BPO providers and prospective buyers held many discussions, but few deals were signed," said Ms Lisa Stone, Research Vice-President at Gartner. "The level of activity we are seeing now reflects the fact that the value proposition behind BPO has been accepted by buyers. Through year-end 2005, prospective buyers will be energised, creating a seller's market," she added.

With such a high demand for BPO, prospective buyers need to make sure that BPO providers have enough qualified personnel to meet the demand. Many new vendors will be coming into the market that lacks particular domain expertise, said the press release quoting Gartner analysts.

"Buyers should assess if their company's BPO opportunity is compelling from a vendor perspective. This can be analysed by evaluating whether the type of BPO offered aligns with the provider's strategic direction, and how committed the provider is to staying in that market," said Ms Stone.

"If a company is considering new BPO projects, it must begin to develop a BPO strategy and make decisions soon," said Mr Robert Brown, principal analyst at Gartner. "Companies must consider if BPO offers an opportunity for them to improve services without capital investment, offload non-core services or reduce operational costs. The sooner prospective buyers can start meaningful discussions with providers, the more likely they will be able to get the BPO vendor's attention," said Mr Brown.

This year's theme for Gartner's outsourcing summit in April is `Practical Outsourcing: Managing the Choices, Risks and Rewards.'

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BPO revenues to touch $134 b in 2005: Gartner