Market, Growth, Europe, BPO
Europe BPO market on growth path
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European Business Process Outsourcing (BPO) market is expected to grow 4.5 per cent year-on-year in 2004 to 25 billion euro and in the next three years, the growth will be greater and trend of offshoring of these services will gain strength, according to a study.
''BPO is now the fastest growing segment within IT services, and is expected to grow at a compound annual growth rate (CAGR) of 6.8 per cent to reach 33 billion euro in 2007,'' according to research and advisory firm Gartner.The use of offshore resources as an alternative to domestic BPO is also starting to take off and by 2007 offshore BPO will account for 14 per cent of the total BPO market compared with only one per cent in 2003, Gartner said.
The BPO market is evolving quickly with many US service providers aggressively targeting Europe. ''Eastern Europe has become particularly attractive because of good delivery locations and many global BPO providers are ramping up their capabilities in Prague, Krakow and Budapest to take on the competition from European BPO service providers and Indian offshore providers,'' said Ms Rebecca Scholl, principal analyst at Gartner.
To take advantage of the opportunity that Europe offers, the business process outsourcing (BPO) arm of Infosys, Progeon, is setting up a centre in the Czech Republic.
The centre is expected to come up within 2-3 months and Progeon is also on the lookout for a partner to strengthen its front-end base in Europe.
Gartner said the desire to focus on core competencies, cost reductions and customer service improvements, primarily by large organisations, are the key drivers to BPO growth in Europe. BPO adoption in transaction-intensive processes such as payroll, card processing and claims processing continue to grow, but are now extending to enterprise processes such as human resources, finance, accounting and procurement. Several large organisations have signed comprehensive HR or Finance and Accounting BPO contracts in Europe over the past three years.
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