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Study Reveals Trends that Drive BPO Competition

by: Sarah Joson

Monday, April 18, 2011 |

A study done by an Information Services Group (ISG) company called TPI stated the major services that attract new clients and make existing ones renew contracts. The key factor in the shift of the trend in outsourcing was the rise of Cloud Computing technology last year. It resulted to tighter competition amongst BPO service providers as well as reduced values and shorter durations of contracts.  This trend is predicted to continue all the way through the end of 2011.

Paul Reynolds, Chief Research Officer of TPI Momentum, said, “For service providers to increase pipelines and improve profitability in 2011, they will need an accurate reading of current client preferences and market trends, an appropriate strategy to respond, and disciplined execution in the face of strong competition.” “This report provides the information they need to understand the size and scope of opportunity in the global outsourcing market,” he added.

According to additional data collected by exclusive sources and TPI advisors from around the world, majority of the clients are predicted to embrace Cloud Computing and include Cloud-based services in contracts. This prompted service providers to reformulate services related to the said trend, and bolster their portfolios. 

Other factors in the restructuring and change in strategic plans of BPO firms are shorter contracts and multisourcing. Proof of that was a large number of contracts that expired last year and over 500 more are expected to expire this 2011. In addition to that, clients who spend $50 million annually in outsourcing acquire the services of two or more BPO firms. 

The TPI Momentum Market Trends and Insights 2010 Annual Report also includes data in IT and business process outsourcing like, geographic regions, vertical industries, client company sizes, service provider market share, etc., tips for services providers regarding multisourcing, as well as factors that affect Cloud Computing services.


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