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Shifting Strategies for the ITO and BPO Services

by: Ronald Escanlar

Friday, November 4, 2011 | Outsourcing News |

Developments in the BPO and ITO Market

According to the latest TPI Momentum 2011 Market Trends and Insights Service Line Report, clients who rely on BPO and ITO services are interested in service delivery options and emergent technologies, such as support for mobile devices, cloud computing, and X-as-a-Service. Providers also face the clients who demand custom-fit services and features for their business processes.

The same report from the outsourcing consultancy firm said that 2010 saw a record number of BPO contracts being signed, coupled with a tremendous increase in ITO budgets across companies.

From the same report come these highlights:

New clients came over to the BPO fold. Last year saw 759 BPO contracts being signed - a 20% increase from 2009. Majority of these contracts were signed between companies venturing into outsourcing over Contact Center Services, Finance & Accounting, Human Resources and Procurement. Total spending, though, was down by 12% from 2009.

The ITO market slowed due to re-evaluation of company IT strategies. Contract award volumes were reduced from 2009 since clients were evaluating their strategies and policies, especially with the exponential growth in mobile computing, virtualization, and cloud computing. The Americas, nonetheless, witnessed a 1.6% increase in ITO contract awards.

Clients opted for multi-sourcing. As clients renewed outsourcing contracts, companies opted to use portfolio bundling, creating separate bundles of outsourcing contracts in business and technology sectors.

Mobile computing has changed the market. The explosion in mobile device use and mobile computing has directly impacted the outsourcing industry, via new advantages and disadvantages. Service providers needed to create new solutions for clients who wanted mobility with information security.

Experts needed. Clients have shifted to expertise in their respective vertical industries when it came to choosing service providers last year. Custom-fit solutions have become the name of the game, instead of basic, pre-packaged services. Innovation has also taken the front seat among clients, as they saw the advantages of cloud and mobile computing. Preference for business process-as-a-service has also increased among clients.

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