The worldwide business process outsourcing (BPO) market will grow by 6.3 per cent in 2011 and five per cent in 2012, according to a report from research firm Gartner.

The growth expectations are tempered owing to the mixed outlook for BPO in developed economies, it said.

“While growth remains strong in developing economies, the US, the world's largest BPO market, presents a mixed picture for the global market," said Ms 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 activities," she said.

Gartner estimates that North America's BPO market will grow 3.8 per cent in 2011. The US is the largest and most established market for BPO.

Within horizontal sectors, dynamic growth is expected for customer selection in the customer relationship management and human resources domains.

Gartner estimates that Japan's BPO market (expressed in yen) will decrease 0.9 per cent in 2011. The impact of the March 2011 earthquake is expected to be prolonged, and analysts expect this will impair growth in the BPO market.

In continental Europe, the challenges of overcoming language requirements, labour laws and trade unions, and a lack of labour arbitrage benefits, still limit adoption of many types of BPO, it said.

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