Kennedy Sees Big Growth in BPO

Kennedy Information Research Group, a leading analyst of the consulting sector, estimates that worldwide business process outsourcing will grow at a CAGR of 11.6%, from $2.5 billion this year to $7.5 billion in 2009. Further, it is to grow at an increasing rate in coming years. Cost savings is a key reason given by 70% of companies to outsource, and 57% of responding companies say best practices and innovation are another key reason. But Deloitte and DiamondCluster indicate that outsourcing's anticipated benefits are simply falling short of expectations. It's a very complex business construct, particularly in an area that has not been heavily outsourced thus far like commodity purchasing. And, whoever figures it out first is going to win big.