Half of firms will suffer cost overruns and poor service over the next three years because they jumped on the business process outsourcing (BPO) bandwagon too early, warns a Gartner report.
Swayed by the hype and the promises, many firms have unrealistic expectations of what BPO can actually deliver and have mis-judged the maturity of the BPO market and vendors.
Even though BPO services such as core banking and finance and accounting could transform business, they are five years away from maturity. In contrast, contact centre outsourcing is relatively mature.
Gartner urges companies to put more care into their BPO strategy and be more rigorous in their selection process.
'Companies must set up an internal BPO strategy in order to block out the hype and determine the best offering for them to achieve their goals,' says Gartner research vice president Lisa Stone.
This was first published in September 2006