Business Growth Strategies in Outsourcing:

This article analyzing about the business strategies in outsourcing sector.
Businesses now use IT outsourcing for a wide range of services from ICT infrastructure and application services to running the human resources department. IT outsourcing has become a business imperative, with organizations today outsourcing to gain business capabilities and benefits. One main difference between IT outsourcing and BPO contracts is the complexity of pricing. In the IT world, it is relatively easy to structure the pricing of a contract around predictable, standard units such as hours of server uptime, the depreciation costs of equipment and the number of desktops supported. But in BPO, there is no such thing as a standardized unit.

Some interesting reports about business process outsourcing:

Nearly 80% senior decision makers surveyed in Europe and North America agreed that outsourcing was the way to make their businesses faster and moreadaptive.

At the center of most of the largest BPO deals has been a project to hand over the running of the ERP application underpinning the client’s back-office function to athird-party services vendor.

While the blurring of the lines between IT services and BPO contracts makes it difficult to make accurate market forecasts, some estimates suggest that the BPO market will reach $1 trillion by 2006.

The biggest BPO spenders are companies in the Americas with 60% of the global total, although the region’s year-on-year growth is expected to be the slowest in 2004.

Average deal size in Europe has also picked up dramatically at $418m in the first half of 2004, compared to an average of $220m in 2003.

In Europe, Germany accounted for 33% of deals signed in the first six months of 2004, up from 22% in the same period the previous year. The UK followed with 28% of deals signed, compared to 35% in the first half of 2003.

Despite existing and predicted growth, BPO still faces barriers – one of which is building the requisite trust between customer and supplier.