Business process outsourcing, the fastest growing part of the
European IT services and sourcing market, will attract unreliable
players that could lead to high-profile failures, research firm
Gartner has warned.
European businesses hoping to outsource activities such as human
resources, payment systems and inventory management because of the
cost benefits, should watch out who they do business with.
"There will be many companies jumping in [to offering outsourcing
services] with two feet without a serious commitment to the process
delivery model," said Robert Brown, a Gartner senior analyst.
Business process outsourcing is an immature but rapidly growing
market, and service providers will want to be associated with it,
according to Gartner. Today's dominant vendors, such as EDS, IBM
and PricewaterhouseCoopers, will face tough challenges from new
entrants.
Companies looking to outsource should "watch out for the newcomer
using a BPO [business process outsourcing] label just as a sales
tool," Gartner said.
The European market for business process outsourcing should reach
£26.6bn in 2002 and grow to £44.5bn by 2005. It is the fastest
growing component of the European IT services and sourcing market
with a projected 14.7% compound growth rate between 2000 and 2005,
according to Gartner.