PR - NelsonHall BPO Index Identifies 57% Growth in BPO Contracts in 2007

 
NelsonHall, the leading independent BPO analyst firm, this week announced the results of its "BPO Index" market monitor for the third quarter shows that the market is prospering with year-on-year TCV (total contract value) growth of 26%, and 57% growth during the first nine months of 2007.

Much of this growth is coming from a resurgence of interest in BPO in North America. Levels of contract activity have been particularly strong in the North American government and financial services sectors over the past twelve months, but in addition there has also been steady growth in BPO TCV across a wide range of other sectors in North America including manufacturing, retail, energy & utilities, and transportation.

NelsonHall also found that that there has been a turnaround in the average size of the leading BPO contracts during 2007 after falling worldwide during 2005 and 2006. This year, the average size of the top 20 and top 50 BPO contracts has returned to its 2004 levels due to the resurgence in major industry-specific contracts, particularly in state and local government, insurance, and occasionally utilities, together with a stream of large multi-process HR outsourcing contracts arising predominantly out of North America.

A relatively new trend arising in the third quarter of 2007, which is also supporting the increase in average contract size, is the emergence of a stream of relatively large finance & accounting (F&A) outsourcing contracts, with TCVs typically around $200 million. These contracts, which include the contracts between Infosys and Philips, Microsoft and Accenture, and BT and Xansa, are not confined to North America and are also emerging strongly in Europe. Separate F&A outsourcing contracts are also beginning to emerge for transactional accounting services and for higher value services such as month-end closing, reporting, and forecasting, as demonstrated by BT’s contract with Accenture.

Customer management services vendors are also continuing to move into F&A outsourcing through acquisition, for example Teleperformance’s acquisition of Alliance One and Transcom’s acquisition of IS Inkasso Service Group, though these organizations are focusing on collections and accounts receivables management where they can bring their customer care skills to bear.

The recent quarter also saw new developments in the move towards utility services in the banking sector with EDS launching a payment card processing utility in Australia and Tata Consultancy Services launching an outsourced reconciliation service with Deutsche Bank as the initial client.

NelsonHall’s quarterly BPO Index reports are available as part of NelsonHall’s BPO subscription services.