Report

August 2003

• 67% of respondents are doing or investigating BPO.
• Of the firms at least considering BPO, 33% spent at least $1 million in 2002, but 52% expect to spend that much in 2004.
• 51% of firms struggle to find the right performance metrics.

• Vendors overhype their BPO capabilities.
• Providers can't master the entire range of BPO skills.
• Simple bulk transactions will be the largest BPO segment -- reaching $58 billion in 2008.

• Vendors will differentiate based on their analytics tools.

• BPO is the first stage in the evolution to process-centric IT.

• Figure 1.  Users' BPO Activities And Budgeting
• Figure 2.  Users' Motivations And Savings
• Figure 3.  Users' Difficulties With BPO
• Figure 4.  Users' Evaluations, Challenges, And Realized Savings With Vendors
• Figure 5.  Savings From BPO Can Be Significant
• Figure 6.  The Hype And The Reality Of The BPO Market
• Figure 7.  The Broad Set Of Skills To Do BPO Well
• Figure 8.  Defining The BPO Segments
• Figure 9.  Forecast: US BPO Market, 2003 To 2008
• Figure 10.  Pricing Dynamics Over Typical BPO Contract

 

• Online Resource
• Companies Interviewed For This Report
• Related Research

• IBM does its own apps on demand.
• The offshore mating dance gets political.
• Offshore interest continues to build.
• BPO assets overvalued.