BPO market set to grow to £71bn in 2005

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BPO market set to grow to £71bn in 2005

Nick Huber
The worldwide market for business process outsourcing will reach £71bn in 2005, up 8% from 2004, analyst firm Gartner has predicted.

In Europe spending on BPO will remain strong and is on course to reach £19bn this year, an increase of 6.6% from 2004.

Business process outsourcing - which covers IT-intensive business processes, such as human resources and accounting - offers organisations the potential to make significant cost savings in areas of the business that do not give a competitive advantage.

Growth areas for business process outsourcing will include procurement and payroll functions, according to Gartner.

Robert Brown, principal analyst at Gartner, said, "Companies must consider whether BPO offers an opportunity 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 to get the BPO suppliers' attention."

Gartner said user organisations should check that business process outsourcing suppliers have enough qualified staff to meet the increased demand. Many new suppliers coming into the market could lack specialist skills, Gartner warned.

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