The BPO market in the Asia-Pacific region excluding Japan will grow at a five-year compound annual growth rate of 11.2 percent, from US$17 billion in 2008 to US$29 billion in 2013, IDC said Monday in a statement.
Emerging economies in the region are expected to undergo rapid growth during the forecast period, the market analyst group added. For example, the Indian market is predicted to achieve 17 percent growth between 2009 and 2010, due in part to a strong domestic demand especially from the telecoms sector and mainstream uptake of BPO services.
Suchitra Narayan, IDC's research manager for Asia-Pacific IT services research, noted that the current economic downturn is playing a part in the accelerated adoption of BPO, and in particular, platform BPO. Platform BPO typically refers to business processing services based on a vertical or horizontal technology platform.
Analysts to Show How To Implement and Manage a Successful Outsourcing Partnership During the Gartner Outsourcing Summit, April 4-6 in Los Angeles, CA
STAMFORD, Conn.--(BUSINESS WIRE)--March 29, 2005--Worldwide business process outsourcing (BPO) is projected to reach $133.7 billion in 2005, an 8 percent increase from 2004 revenue of $123.8 billion, according to Gartner, Inc.
Gartner analysts predicted earlier this year that eight to 12 major BPO contracts, each exceeding $300 million in contract value, were likely to be signed between the fourth quarter of 2004 and the end of the first quarter in 2005. That prediction is rapidly turning into a reality. Gartner analysts now believe interest and demand for BPO will surge as more of these larger deals are signed.
Gartner defines BPO as the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administers and manages the processes based on defined and measurable performance metrics. BPO has many markets. They typically include staff functions such as human resources, finance and accounting, and contact centers or vertical specialization such as insurance claims processing or banking payments.
"A year ago, BPO providers and prospective buyers held many discussions, but few deals were signed," said Lisa Stone, research vice president at Gartner. "The level of activity that we are seeing now reflects the fact that the value proposition behind BPO has been accepted by buyers. Through year-end 2005, prospective buyers will be energized, creating a seller's market,""
Ms. Stone said that prospective buyers should understand that as rising demand materializes into more completed deals, the top vendors of BPO services will be focused on this newly acquired business. For this reason, more vendors will be in a position to bid only on projects that have a high probability of resulting in a sale.
"If a company is considering new BPO projects, it must begin to develop a BPO strategy and make decisions soon," said Robert Brown, principal analyst at Gartner. "Companies must consider if BPO offers an opportunity for them to improve services without capital investment, offload noncore 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 vendor's attention."
Even as the buzz around Vivel Paul's candidature as CEO is still doing the rounds at Satyam Computer Services [Get Quote], insiders say the government is considering a person who was an integral part of the company till three months ago.
The name of Venkatesh Roddam, former CEO of Satyam's BPO subsidiary Nipuna, is being seriously considered, since Paul is not keen to return to India, according to highly-placed sources. The search for a CEO has been following founder Ramalinga Raju's disclosures of financial fraud January 7 and his subsequent arrest.
Roddam, who is taking a break from corporate life and lives in Hyderabad, said: "I'm not too sure what is happening. I am getting calls from close friends and relatives who are asking me about this."
Roddam did not, however, offer a direct reply when he was asked if he was interested in the post but suggested he was not averse to it either. "It is a fantastic company to work with. It's an interesting and challenging role. They have a competent board now, to provide all kinds of support," said Roddam who worked for Nipuna for about three years.
Last week, Business Standard reported that the government had exhorted the new board, whose six members it has nominated, to look within the company or identify a person who knew Satyam's operations well, for the post of CEO and CFO.
