The present economic downturn has prioritized outsourcing as a means of achieving short-term cost reductions, and that business process outsourcing in some cases is being used to carry out overdue overhauls to back-office and business service delivery models.
According to EquaTerra report 65% of service providers cite that the economic climate is driving more outsourcing, with pipeline levels up 27% quarter on quarter. This shows that there is an increase in both demand and supply for outsourcing services, beyond general and administrative back-office functions.
Knowledge Process Outsourcing (KPO) for functions such as engineering, research and development, analytics and legal process work, and financial modelling and analytics are gaining in popularity alongside the more traditional BPO services of outsourced payroll and benefits, accounts receivables, and application infrastructure support.
Interestingly the Western Europe the market for BPO will increase by around 10% during the year. Present BPO deals tend to focus on a single function like HR or F&A and on business processes that are pretty much standard across industry like payroll and benefits, or accounts payable and receivables. By focusing on one or two standard business processes service vendors, companies can start to industrialize a process and offshore it, and begin to see some economy of scale.
Looking at surge of BPO business, Wipro Technologies plans to recruit 8,000 employees to its business process outsourcing (BPO) arm financial year.
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