London, 9th February 2005 - New research from HandySoft has revealed that the main board at almost half of Europeâs top 10,000 firms are seriously thinking of outsourcing whole business processes. This is a first step on the road to becoming what management consultants are calling "virtual" organisations â namely, companies that outsource all but their core business processes.
Some 15% of larger European organisations have actually implemented Business Process Outsourcing (BPO), but with 48% actively considering such strategic initiatives at board level, there is a clear implication that BPO will see sustained growth over the next few years. Sectors most interested in BPO are Utilities & Telecoms (19%) and Financial Services (18%), probably because competitive pressure is exerting the double challenge of reducing costs while maintaining â or even improving â customer service standards. BPO might typically cover processes such as:- customer service enquiry management; foreign exchange deal processing; software development; hardware and software upgrade installation; prospect database hosting and management; payroll and employee benefits management.
Contrary to received wisdom that continental European countries are less keen on outsourcing than the UK, France is found to lead the field in senior consideration, enthusiasm and implementation of BPO (20%), with the UK close behind (17%). Germany (15%) comes third, but anecdotal feedback points to the likelihood of rapid growth over the next two years, based on recent dramatic development of its overall outsourcing market. In contrast, Netherlands (3%) and Scandinavia (9%) are less keen on outsourcing, and appear to be concentrating on in-house implementation of Business Process Management (BPM) to improve corporate efficiency and transparency.
The research also highlights the other side of the coin â namely that 52% of Europeâs top 10,000 companies are not actively considering BPO. In order to meet the welter of current regulatory compliance strictures, these companies are investing in Business Process Management (BPM) software in order to help automate and monitor business processes, capture and enforce best practice, ensure regulatory compliance and reduce risk. In fact, the underlying technology base for in-house or outsourced business process management is the same.
Wendy Cohen, Sales and Operation Director EMEA, HandySoft, comments, "Organisations under pressure to streamline their operations and financial reporting are looking either to outsource certain business processes, or to handle them better with in-house systems. While BPO is not yet adopted by the majority, its current 15% penetration in Northern Europe represents a significant foothold, and the level to which it is under consideration at board level should tell us that growth in take-up over the next few years will also be substantial. This, of course, also points to significant growth in the underlying software for business process management, whether implemented on a license basis in-house, or â as is increasingly the case â on a per transaction basis with a BPO provider."