Offshore outsourcing rockets in 2004

Offshore business process outsourcing (BPO) will generate revenues of $3bn in 2004, a 65 per cent increase from the 2003 total of $1.3bn, industry watchers have predicted.

But the research note from Gartner warns that the industry will not sustain such high revenue increases in the future, even though offshore BPO has enjoyed high growth rates recently, and is predicted to accelerate through 2004.

The analyst firm estimated that this year, offshore BPO would represent 2.3 per cent of the total BPO market.

"Offshore BPO is an emerging, but immature, opportunity. There will be slower adoption of offshore BPO through 2007," said Robert H Brown, principal analyst at Gartner, in a statement.

"As the service delivery matures, and as users and service providers overcome various operational, cultural and socio-political issues, growth will resume toward the end of the decade and will synchronise more with overall BPO growth."

Gartner found that the majority of offshore BPO business involves contact centres, including voice, email and chat, while the remainder is for back-office transaction processing services.

The analyst advised organisations to map the entire customer process, particularly the intersection between the parts that are outsourced and the functions that are retained.

"The recommended plan for a successful outsourcing relationship is careful planning, integration, and management of outsourced channels, functions or processes where they remain part of the enterprise-wide strategy for customer service," said Brown.

"To build successful service delivery, clients and outsourcers must understand the entire process and clearly articulate who is responsible for which piece to ensure that nothing falls through the cracks."