Businesses throughout the United States have turned to outsourcing such processes as contact center operations to overseas providers in an effort to save money on customer service operations. As this move has proven to be significantly profitable for some, the trend continues.

In its latest forecast of the global business process outsourcing market, “Global BPO Market Forecast: 2008 – 2012,” BPO analyst Firm Nelson Hall provides a comprehensive forecast of business process outsourcing (BPO) services globally by service line and geography.

According to the findings in this report, the BPO market continues to strengthen relative to the more mature IT outsourcing market and its forecast to reach $450 billion by 2012.

The BPO market has enjoyed increased maturity in terms of supplier capability and this increased supply-side maturity was matched by growth in BPO TCV awarded during 2007 across all major geographic regions. 

The current economic slowdown is amplifying the underlying strength in the BPO market. As a result, organizations across all sectors are under increasing pressure to review their efficiency in mature markets.

NelsonHall has predicted that the economic climate will hasten globalization. As a result, organizations will not only use offshore outsourcing to reduce their cost base, but also to speed the development of their capability in emerging marketing in an effort to take advantage of the growth opportunities there. 

In the financial services and telecommunication sectors especially, there will be an increased requirement for BPO services to support new market entry. As a result, services such as customer management services, payments and other industry-specific financial sector services, and recruitment process outsourcing will benefit.

Organizations will increasingly focus on establishing themselves in the emerging economies of Asia and Latin America. They will look to locate support functions such as finance and accounting services and procurement within these geographies. Such a move is sure to lead to opportunities in the outsourcing and relocation of existing shared services centers.

The area of customer management services is showing an upturn, and is also important in support new market entry in addition to taking on increased roles in assisting organizations in customer retention. 

The most impacted geography in terms of economics is North America. This is expected to lead to increased BPO activities, although there is the possibility of greater protectionism in the U.S. and a reaction against both outsourcing and offshoring. 

Currently, rather than a backlash, there are signs of increased BPO evaluation but it is possible that a downturn in BPO contract activity could take place in the U.S. in Q4 2008 and during the first half of 2009. Whether or not the increase will continue in North America in the next year remains a “wait and see” game as much relies on the presidential election and its outcome.