Business processing set to boom

Business process outsourcing (BPO) is set to boom in the UK, growing to over £10bn by 2005 despite company concerns, according to new research from analyst Ovum Holway.

The market for business process management (BPM) is also set to rise rapidly but from a much lower base, with systems integrators that provide services gaining the lion's share, according to sister company Ovum.

BPO, which Ovum Holway defines as "long-term contracting out to an external company of the management and delivery of business processes", reached £3.5bn last year, compared with £6.9bn for IT outsourcing.

But the analyst predicts a 31 per cent compound annual growth rate (CAGR) through to 2005 when it will reach £10.3bn. IT outsourcing will grow at about 14 per cent CAGR to £11.9bn in the same period.

Ovum predicts worldwide figures for BPM will rise from £650m to £5bn by 2007.

The interest in defining business processes as the basis of internal systems is nothing new.

Renewed interest, however, has come from a combination of factors, such as an increasing need for enterprises to change rapidly and the emergence of web services.

Current UK leaders in BPO are Capita Group, with 15 per cent of the market, followed by Serco Group and then systems integrators such as EDS and Siemens. The top 10 companies represent 50 per cent of the total.