HR, BPO, Gartner, Outosurcing
Gartner says worldwide HR BPO market will grow 18 percent in 2003
-
|
- Print |
- Email Page
Human resources (HR) is the most outsourced business process, with worldwide HR business process outsourcing (BPO)revenue on pace to reach $46 billion in 2003, an 18 percent increase from 2002 revenue of $39 billion, according to Gartner, Inc.. By 2004, HR BPO is forecast to reach $51 billion and represent 39 percent of all BPO revenue.
Gartner analysts are providing their outlook for the outsourcing industry this week during the Gartner Outsourcing Summit, which is being held June 23-25, at the Century Plaza Hotel and Spa in Los Angeles.Payroll and benefits services are the most popular in HR BPO and are driving the growth of the market. Companies that are already outsourcing HR processes expect to significantly increase their investment in HR outsourcing in the next 24 months.
"Best practices and vendor scalability have been proven in HR over time, and enterprises perceive HR BPO options as being less risky and offering good value for money," said James Holincheck, research director at Gartner. "HR is a more mainstream and common BPO undertaking, so inhibitors to its uptake are low compared to other processes."
Gartner analysts said that in 2003, a short-term drive to cut costs is leading to an increase in enterprises signing HR contracts that are focused on immediate cost ramifications. As more companies become comfortable with the premise of BPO, they will shift their focus to longer-term engagement models that transform their HR processes.
The bulk of HR BPO deals in 2003 are priced on a utility basis, while in 2004, there will be more multiprocess deals that emerge. Traditionally, HR outsourcing deals have been low in flexibility, but in 2004 there will be an increased ability to change service levels and adjust process delivery outputs. Gartner analysts said that by 2004, an increasing number of businesses, encouraged by an improving economic and competitive climate, will become mainstream adopters of end-to-end, strategic BPO deals.
"Enterprises should note that HR BPO is a vast, mature and growing external services option for their businesses. However, the market is not monolithic, and enterprises must understand what 'flavors' of HR BPO can most meaningfully impact their business," said Holincheck. "Creation of a sourcing strategy for HR that determines the proper mix between internal and external services will be critical to success."
Gartner analysts and industry luminaries are providing further information on the outsourcing market during the Gartner Outsourcing Summit. The three-day summit is the most comprehensive conference ever organized for users of outsourcing services, providing a 360-degree view of today's most important outsourcing issues, and access to the market's leading solution providers. Additional information about the conference is available at www.gartner.com/us/itsourcing.
To keep up to date on latest outsourcing issues, please visit Gartner's Outsourcing Web site at www.gartner.com/outsourcing.
-
|
- Print |
- Email Page
Making Gainsharing WorkHow to Create, Cultivate and Maintain the Business of Innovation in an Outsourcing Arrangement14 Jul 2008 | (Thinking Point)
Service Improvement – A Shared ResponsibilityRachel Anderson of Alsbridge Europe outlines the dual responsibility of service improvement.08 Apr 2008 | (Thinking Point)
Retained Organisation – The Importance of Getting It RightRachel Anderson of Aslbridge Europe makes an argument for effectively designing your retained organisation, no matter how large or small.08 Apr 2008 | (Thinking Point)
Service Provider M&A – Change of Control Doesn’t Have to Mean Loss of ControlThe outsourcing service provider market has experienced a steady stream of mergers and acquisitions (M&As) which began to pick up in 2007. However, a solid outsourcing arrangement is structured to
anticipate...08 Apr 2008 | (Thinking Point)
