Offshore business process outsourcing will grow 65 per cent year-on-year in 2004 to touch $3 billion, according to a study.

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"Offshore BPO is growing fast over the past few years and the market is accelerating in 2004 but the industry will not sustain such high revenue increase in future," a study by technology research and advisory firm Gartner said.

"Offshore BPO is an emerging but immature opportunity. There will be a slower adoption of offshore BPO through 2007 and accelerate thereafter," Robert H Brown, principal analyst for Gartner's sourcing group, said in a statement.

"As the service delivery matures and as users and service providers overcome operational, cultural and socio-political issues, growth will resume towards the end of decade and will synchronize more with overall BPO growth," Brown said.

A survey of 301 US clients of BPO conducted by Gartner in 2003 showed that 16 per cent were already outsourcing BPO services offshore and 17 per cent were considering outsourcing processes offshore within the next two years.

Gartner said the vast majority of offshore BPO is around contact centres and the remainder for back-office transaction processing services. It said organisations must not neglect mapping the entire customer processes, particularly the intersection between the parts that are outsourced and functions that are retained.