* BPO is a growing business, but challenges remain
For most organizations, there are a number of business processes that are clear outsourcing candidates. Payroll and other HR functions are prime examples. I experienced this firsthand when I worked at an early-stage start-up that used HR outsourcing firm TriNet in the late 1990s. TriNet consolidates benefits, payroll, and HR support for small companies that want to concentrate on their core business activities.
Business process outsourcing (BPO) also appears to be a busy market for the big outsourcing suppliers as EDS found in its most recent quarter. The company, which has been finding the business climate especially challenging, last week reported an upturn in its first quarter results (see story link below) and highlighted a 32% sequential improvement in its BPO contracts. This shows that while BPO contracts have been around for quite a while, they continue to be sought by customers to improve overall business metrics.
This trend is echoed in the overall revenue success of the 30 largest IT services vendors as reported recently by IDC (see story link below). The outsourcing segment of those vendors’ businesses grew by a healthy 17.9% in 2003 over 2002, notes IDC.
However, a recent Computerworld story (see story link below) reporting on an IDC conference at which several BPO customers spoke, noted that establishing reasonable BPO performance metrics continues to be a problem for users and vendors alike.
This echoes the topic that we’ve been discussing the past few weeks: the challenge of determining the value of outsourcing a particular business function (see newsletter links below).
But despite these challenges, the financial news highlighted above suggests that outsourcing is enjoying rapid growth. This is where I need your help: I’d like to discover more about you and your specific interests in the areas of outsourcing, offshoring, and related challenges.
Please drop me an e-mail to let me know which areas are of greatest interest to you, and where you’d like more (or less) coverage. For example, are you part of an organization that has outsourced or offshored some business processes? If so, which ones? What are your interests and concerns as a result? Are you interested in outsourcing some of your business functions? Alternatively, do you provide services to other organizations? Which ones?
The more you can share regarding your interest in outsourcing, the more specifically we can target the topics of this column to your desires and the more specifically we can address questions. I have appreciated the great input that I have received already and look forward to more of you letting me know your thoughts and concerns.
