Copyright2002RossResearchwww.rossresearch.comReproductionispermittedandencouraged.OutsourcingThoughtLeadershipOctober2002Theme:OutsourcingMarketEvolutionRossResearchwelcomesyoutothisissueoftheonlyfree,monthlyoutsourcingnewsletterwrittenbyindependentthoughtleadersfromaroundtheworld.Wehavetwonewandexcitingchangestoourformat:•ThemedIssues:Everynewsletterarticlewillfocusonaspecifictopic.Thismonth’sthemeisOutsourcingMarketEvolution;November’sissuewilladdressInterculturalAspectsofOutsourcing.•EditorialQ&A:Weinterviewadifferentsourcingservicesprovidereachmontharoundtopicsrelatedtoourtheme.Forthisissue,wespokewithCreditekaboutFinance&AccountingOutsourcing.InThisIssue…•TheWideOpenWorldofOutsourcingOpportunities(page2):Aleadinginformationsourceonprofessionalservicesrevealsgeographicoutsourcinggrowth,industryprojections,andtrends.•ManagingtheDynamicsofPre/PostBPOActivities(page6):Anattorneydiscusseswhattoexpectateachcontractstage,basedonhisexperienceascounselonnumerous,globaloutsourcingtransactions.•TargettheSMEMarketplace?Um…Yah!!!(page10):RossResearchpointsoutwhytheoutsourcingneedsofsmallandmedium-sizedenterprisesarenotbeingaddressed…andwhytheyshouldbe.•Q&A:Finance&AccountingOutsourcing(page12):CreditekprovidesinsightsintotherapidlygrowingF&Aoutsourcingarenaandhowthismarketisexpectedtoevolve.Wewishyoumuchsuccesswithyoursourcingendeavors!Fondly,Lisa--LisaMaioRoss,PrincipalandEditorRossResearch–MarketIntelligenceforOutsourcersCopyright2002RossResearchReproductionispermittedandencouraged.2KennedyInformationestimatesthatthemarketforinformationtechnologyoutsourcing(ITO)andbusinessprocessoutsourcing(BPO)servicescombinedwillreach$375billionbyyear-end2002withaCAGRof16.2%between2001and2004.ITOworldwidewillgrowatacompoundannualgrowthrate(CAGR)of12%,between2001and2004.BPOspendingworldwide(includingdistributionandlogistics,humanresources,finance/administration,andcustomerrelationshipmanagement)willgrowataCAGRof21%overthesameperiod.ThestrongpredictedgrowthratesforBPOareduetotwoprimaryfactors:BPOisgainingacceptanceasahighlystrategic,highlyviablebusinesstool;andorganizationsthathavealreadyoutsourcedtheirITareincreasinglyopentobeing“upsold”toBPOcontracts.TheWideOpenWorldofOutsourcingOpportunitiesWrittenby:BradSmith,VicePresidentofResearch,KennedyInformation,Inc.Outsourcinghascausedquiteastiroverthepastseveralyearsasbuyers,industryanalysts,financialanalysts,shareholdersandeventhenationalbusinesspresscontinuetorealizeitsstrategicvalueasanoperationalalternative.KennedyInformationestimatesthatthemarketforinformationtechnologyoutsourcing(ITO)andbusinessprocessoutsourcing(BPO)servicescombinedwillreach$375billionbyyear-end2002withaCAGRof16.2%between2001and2004.Theoutsourcingindustryholdsthepromiseofdeliveringstrongprofitabilitytosavvy,qualified,andflexibleoutsourcingserviceproviders–traditional,mid-sized,andniche–aroundtheworld.FASTFACTSONGEOGRAPHICSPENDINGKennedyInformationmakesthefollowingoutsourcingspendingprojectionsbasedonprimaryandsecondaryresearchoftheoutsourcingindustry:•ITOworldwidewillgrowatacompoundannualgrowthrate(CAGR)of12%,between2001and2004.•BPOspendingworldwide(includingdistributionandlogistics,humanresources,finance/administration,andcustomerrelationshipmanagement)willgrowataCAGRof21%overthesameperiod.•Companiesaroundtheworldwillcontinueinitiatingoutsourcingrelation...
