PublicationDate:18March2003ResearchBriefBPOPurePlaysandProcessSpecialistsTargetSMBMarketAbstract:Smallandmidsizebusinessesareturningtobusinessprocessoutsourcingproviderstohelpreducecostsandincreaseperformance.Pureplaysandprocessspecialistsarejockeyingtomeetthisdemand.ByRobertH.BrownRecommendationsISmallandmidsizebusinesses(SMBs)shouldevaluatebusinessprocessoutsourcing(BPO)processspecialistsbasedontheirpasttrackrecordhelpingcustomersofsimilarsizeand,whereapplicable,verticalindustryexperience.IProbenewlyestablishedvendorsfortheirlong-termcommitmenttotheSMBsectorandtoBPOingeneral.SomepeopleviewBPOandSMBsas"today'shotmarket"andmaynotbelong-termplayers.IVendorstargetingtheSMBmarket,includingprocessspecialists,shouldavoidthetemptationtostretchservicescoveragebroaderinattemptstobeallthingstoallpeople.Forcompanieslookingtoaddnewaffinityprocessestotheirportfolio,considerleveragingalliancepartnersbecauseorganiceffortswillbeexpensiveandtimeconsuming.2BPOPurePlaysandProcessSpecialistsTargetSMBMarket2003Gartner,Inc.and/oritsAffiliates.AllRightsReserved.18March2003IntroductionSMBsareincreasingtheirinterestinBPO.Atthesametime,themarkethasseenanexplosioninthenumberBPOvendorsandaffiliatedservicecompaniesstrivingtowinapieceoftheaction.ManyofthelargestBPOvendorsarefindingitdifficulttopenetratetheSMBsectorwithoutsacrificingthejuicyprofitmarginstheyhavebecomeaccustomedtoamongtheirlargeFortune1000clients.BPOpure-playvendorsandprocessspecialistsarewinningthewalletandmindshareofSMBbuyersofBPO.PureplaysgeneratealloftheirrevenuefromBPOandareknownforcomprehensiveservicedeliveryacrossthebreadthofaprocessarea(suchashumanresources[HR]andfinanceandaccounting).Processspecialistsareknownforbeingfocusedonasingularprocess(suchaspayrollwithinHR).Conversely,mostBPOproviderswithanIToutsourcingheritage(suchasACS,CGI,EDSandIBM)andconsultants(suchasAccenture,BearingPoint,Braxton,DeloitteToucheTohmatsuandCapGeminiErnst&Young)derivevirtuallyalloftheirrevenuefromlargemarketenterprises.Todate,theseorganizationshaveyettoengagetheSMBsectorinameaningfulway.SMBsdonothavethesamehistoricaltrackrecordofusingoutsourcingservicesandarethereforemoreapttoworkwithanexternalserviceproviderthatunderstandsthespecifichorizontalprocessandverticalindustryneedsofasmallersizeorganization.Also,manySMBsareinclinedtakeaselectiveapproach,whichperfectlysuitsthevaluepropositionoftheprocessspecialists.GartnerDataquestbelievesthattheseplayersaregainingasignificantandsuccessfulholdamongsmallerbusinessesdue,inpart,totheirfocusontheSMBsectorandtheoutsourcingofspecific,singularfunctions.SelectingtherightproviderforBPOrequiresthatSMBsdotheirhomework.ThemarketforvendorstargetingSMBsisdiverse,butisbynomeansmonolithic.Segmentingthesevendorsbytheirexpertiseisagoodwaytobegin.ThisexercisehelpsSMBstonarrowtheirfocusamidstadizzyingarrayofproviderchoices,andsimultaneouslybringsfocustoBPOvendorsthathavefoundtheircompetitivelandscapeincreasinglycrowded.ThelistofvendorsidentifiedinthisPerspectiveisnotdefinitive,norisitaGartnerDataquestendorsementofvendors'capabilities.Rather,GartnerDataquesthighlightstheBPOpure-playvendorsandprocessspecialiststhatareengagedintheSMBsectortohelpbothvendorsandusersnavigatethecompetitivelandscape.3©2003Gartner,Inc.and/oritsAffiliates.AllRightsReserved.18March2003BPOPure-PlayVendorsEngagedintheSMBSectorPure-playBPOvendorsarecompa...
