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2002 size estimates included £4.7bn (Ovum Holway), £8.3bn (Gartner) £15.4bn (Nelson Hall), and even £29.7bn (IDC). For business people, this is not good enough.
One problem is there’s no commonly understood definition of BPO. It’s less a market than a trend, a catch-all description. In such a situation, the methodology a market research firm uses to assess the market must necessarily involve judgement, and the higher the number the more quotable the results become.
Similarly, when estimating BPO market growth many firms survey the views of sales managers and average their estimates and forecasts. We therefore should not be surprised at optimistic totals, especially in nascent, growing markets.
As the market develops these salespeople might be expected to grow more realistic. To illustrate this, IDC has cut its five year forecast growth rate for HR BPO by a third in the last year.
But remember we would still be listening to suppliers’ salespeople, and the definition of the market would still be unclear. Caveat Emptor!
Dineshi Kodituwakku is a Principal at Credo.
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