More BPO service providers will exit market: Gartner
By IANSWednesday, September 30, 2009
NEW DELHI - More business process outsourcing (BPO) service providers in India will exit the market in coming years, as it is difficult for them to stay afloat in the current form due to the slowdown, according to a study released here Wednesday.
“One-quarter of the top business process outsourcing (BPO) service providers will not exist as separate entities by 2012,” said the study by IT research and advisory firm Gartner.
Market exit, acquisitions and the ascent of new vendors will rearrange the BPO provider landscape in the coming years, it said.
“As providers are exposed to the economic crisis, loss-making contracts and an inability to adapt to standardised delivery models, many will struggle to survive in their current form, said Robert H. Brown, research vice-president of Gartner.
“Some will be acquired and some will exit the market completely to be replaced by dynamic new players delivering BPO as automated, utility services, he added.
Gartner suggested that buyers vendor selection teams gain insight into prospective providers business deals to understand how profitable the vendors are.
Also, it is important to gain insight into the vendors track record of winning new businesses, it added.
The financial services sector accounts for about one-third of the total BPO market globally. Service providers with significant amounts of BPO revenue from the banking sector were the first exposed to the credit crunch and the financial meltdown.
Gartner has advised buyers to build exit strategies into contracts and develop contingencies for contract termination especially before signing a deal as the rate of cancellation of deals has risen sharply since 2007.
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November 18, 2010: 10:17 pm
Thanks for this information. I will only conclude that each one of us have our own ways and strategies of making things possible that may help to our economy and the progress of our country. |
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September 23, 2010: 12:05 pm
The post is really very good and interesting. The booming of BPO companies is very helpful to the community and economy. |
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July 23, 2010: 11:29 pm
Yes indian bpo is also very great.they do really very good work & mostly indian firms are on the list top 100 bpo companies. |
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February 26, 2010: 8:28 am
Before choosing a BPO Service provider, it is really important to make a wide research regarding their services handled, cost, effectiveness, and reliability of their performance. |
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October 1, 2009: 8:24 am
BPO service providers will still continue to struggle to acquire service demands. IT business outsourcing is still growing up and i believed they still to stay connected in some BPO service provider. |
 Benz Thomas |
October 1, 2009: 7:32 am
It seems the time for consolidation in the BPO industry is beginning now. Large clients like Xerox is acquiring service providers. Acquisitions of this kind will actually make the game better and tougher for existing service providers. One of the best acquisitions that happened in the last few months has been Tech Mahindra acquiring Satyam. Mahindra Satyam is currently doing well, and this can be gauged by the speed at which the company is adding new clients. Recently I read an interview of Mahindra Satyam BPO’s CEO in Shared Services Outsourcing Network website. The CEO seems to be pretty upbeat about the acquisition and is sharing details of the synergy between Tech Mahindra and Mahindra Satyam. You can read the interview at https://www.ssonetwork.com/topic_detail.aspx?id=6018&ekfrm=6 I am sure the combination of Tech Mahindra and Mahindra Satyam will be unchallengeable in the near future. |
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