More Big Firms to Boost Investment in BPO

About 75 percent of large international companies will boost their investment in outsourcing and take advantage of offshore delivery models for services like human resources and finance, according to research published by KPMG and HfS.

The KPMG report showed that 72 percent of large businesses plan to spend more on outsourcing, and 61 percent plan to increase their use of IT and business processes shared services in the next two years, mostly offshore. 

The report titled “The State of Services & Outsourcing in 2014: Things Will Never be the Same” also said that global firms expect to boost offshoring activities by 20 to 30 percent next year. The main focus of most organizations is integrated and shared global service models along with outsourcing. More than half of the companies (56 percent) are increasing spending on centralized services.

KPMG’s Dave Brown said that today’s outsourcing companies should go beyond supplying workers that provide basic operations. Otherwise, outsourcing may be reduced to a “staff augmentation model” instead of a “strategic partnership” that enhances the client’s skills and capabilities.

As the BPO map continues to evolve, clients have a wider list of locations to choose from. A.T. Kearney’s 2014 Global Services Location Index lists the best 100 places for outsourcing, with Asian countries dominating (Bangalore at no. 1 and Manila at no. 2), followed by Eastern and Central Europe, and Latin America.