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Home > Business > PTI > Report

BPO gains corporate acceptance: Survey

Seema Hakhu Kachru in Houston | April 23, 2004 11:13 IST

Despite the furore in the United States over sending jobs to countries like India, business process outsourcing has gained corporate acceptance, with offshoring of human resources along with finance and accounting tending to eclipse IT over the next five years, a study has said.

As businesses move beyond cost reduction and towards a growth agenda in 2004, IDC, a market research firm and Capgemini, a consultancy service provider, have together found that BPO is increasingly enabling corporate strategy.

According to a Capgemini/IDC pulse survey of more than 200 participants attending the IDC Outsourcing Forum: "Improving corporate effectiveness through results-driven BPO", conference on Tuesday, nearly 71 per cent respondents said they have already outsourced some of their IT function.

In addition, almost 31 per cent of respondents are involved in outsourcing a portion of their human resources with 24 per cent already offshoring part of their finance and accounting.

The survey also found that over the next five years, information technology outsourcing will slip to the third most popular business function outsourced, behind HR and F&A, but still in front of global procurement and customer care outsourcing.

According to Mike Thomas, Capgemini BPO leader, North America, "The survey illustrates that while companies are still beginning the outsourcing journey looking for cost savings, they increasingly turn to BPO providers who have the ability to offer transformational services plus operational capability."

As BPO continues to gain traction in the boardroom, true collaboration is required between companies and service providers in order to realise the transformation and cost reduction objectives, Thomas added.

"The survey findings reinforce IDC's market research which shows that as organisations explore BPO as a strategic option for improving business performance, they often face the challenge of building a shared understanding of BPO among key decision-makers and constituents," said Katrina Menzigian, IDC vice president of BPO services research.

"Whether it is overcoming risk concerns or dealing with compliance with Sarbanes-Oxley regulations, building a strong business case for BPO has never been more important," Menzigian said.

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