IDC: BPO to Grow 10 Percent Annually

By John Moore  |  Posted 2005-10-25 Email Print this article Print
 
 
 
 
 
 
 

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The BPO market should top $640 billion in 2006, according to IDC, which says the market is vibrant and full of opportunity.

The worldwide business process outsourcing market will expand at a 10.9 compound annual growth rate through 2009, International Data Corp. said this week. IDC called the market "vibrant and brimming with opportunity."

The market, according to IDC, will reach $641.2 billion in 2006 compared with $382.5 billion in 2004.

IDC identified procurement and training as among the fastest-growing BPO segments. Those areas will experience high double-digit year-to-year growth over the five-year forecast period, according to the company.

Procurement outsourcing has gained momentum in recent months with prominent deals including Walt Disney Co.'s $1.3 billion outsourcing initiative involving the procurement function. Earlier this month, Mercer Human Resource Consulting awarded IBM a $58 million contract to manage its IT procurement systems, among other areas.

The human resources and finance and accounting segments also are seeing BPO activity, IDC said.

Affiliated Computer Services Inc., which derives 75 percent of its revenue from BPO, recently cited finance and accounting BPO as having the highest growth rate in the company. During an analyst teleconference last week, Mark King, ACS president and chief executive officer, also pointed to human resources outsourcing as an area of strength.

EDS Division Wins Insurance Pact

EDS-SOLCORP, a division of Electronic Data Systems Corp., will provide its hosted insurance software solution to Hub Financial Inc., a managing general agency in Canada.

The deal hinges on EDS-SOLCORP's WealthServ-Insurance software. WealthServ automates such functions as case management, carrier connectivity, and broker compliance and compensation. The company's WealthServ product line accommodates the converging product offerings of managing general agencies and securities dealers.

"We are aiming at investment shops that are cross-selling insurance and insurance distributors who are cross-selling investments," said Alex Sweeny, vice president of strategic business development at EDS-SOLCORP.

Hub Financial is a subsidiary of Chicago-based Hub International Ltd., an insurance brokerage that provides both insurance and investment products.

EDS-SOLCORP's WealthServ solution, which debuted earlier this year, targets a historically fragmented market, Sweeny said. "The marketplace is served by small, fragmented solution vendors," he noted. Those solutions, he added, tend to be geared toward investment dealers or insurance brokers, but not both.

Next Page: Manhattan Associates Nabs Apparel Deal.

Manhattan Associates Nabs Apparel Deal

Manhattan Associates Inc. on Monday said it will deploy its supply chain execution solutions for VF Corp., an apparel company based in Greensboro, N.C.

VF will use Manhattan Associates' Warehouse Management, Labor Management and Performance Management products in its outdoor division's Visalia, Calif., distribution center. The company's outdoor brands include The North Face, Vans, JanSport and Eastpak. The outdoor division saw a 14 percent sales increase in the company's third quarter ended Oct. 1.

VF's sportswear division installed Manhattan Associates' Warehouse Management and Trading Partner Management solutions last year, and the company's wholesale division followed in 2005.

"Many apparel companies are moving toward the idea of a shared services model—the concept of having common business processes across an organization," said Mike Dunn, vice president at Manhattan Associates.

The objective is to operate autonomously in such areas as product design, while leveraging common business practices companywide, he added.

Consulting Firm Debuts

Arcon Group LLC recently debuted as a business advisory firm that aims to bridge what it views as a gap between front-office corporate strategy and back-office operations.

The Atlanta-based company, which launched Oct. 18, partners with the Balanced Scorecard Collaborative, a division of Palladium Group Inc., and TPI Inc., a sourcing advisory firm. Balanced Scorecard Collaborative and TPI both have a minor equity stake in Arcon, according to an Arcon spokeswoman.

Palladium's Balanced Scorecard Collaborative works with executives to align an organization's strategy with its core competencies. Arcon, meanwhile, focuses on an organization's back-office processes to make sure they are in agreement with its core competencies. Those processes include things such as finance, human resources, information technology, procurements and corporate services such as real estate and legal.

General and administrative processes account for 5 percent to 7 percent of a corporation's spending, but haven't necessarily been strategic functions for chief executive officers, noted Bruce Barlag, CEO of Arcon.

Finally, TPI provides advice on sourcing options for back-office processes: Should they be outsourced, sent offshore or maintained in-house as a shared service?

Arcon's offerings include a subscription-based research service. The company plans to offer information on outsourcing vendors, for example.

"We are now embarking on an extensive amount of research around the vendors' ability to provide capabilities in the outsourcing arena and building a profile of each of the vendors," Barlag said. He noted that the subscription service will also be offered to vendors and Wall Street equity analysts.

Ingram Micro's POS Division Adds Microsoft Products

Nimax Adds Microsoft POS

Ingram Micro Inc.'s Nimax division has added Microsoft Corp.'s retail solutions to its point-of-sale mix.

Nimax on Monday said it now carries Microsoft Retail Management System and Microsoft Point of Sale software. The retail system is for multistore retailers, while the POS solution is for single-store retailers.

Nimax focuses on bar code, POS and wireless hardware products. The company's vendors include IBM, Hand Held Products, Metrologic, PSC, Symbol Technologies and Zebra.

Nemx Updates E-mail Content Control Software

Nemx Software Corp. on Monday rolled out the latest release of its SecurExchange e-mail content control software, which the company markets through resellers.

The initial version of the product, which debuted in May, provided outbound and internal e-mail monitoring in addition to inbound message filtering.

SecurExchange Version 2.0 provides additional features such as real-time monitoring for message attachments. The product is able to scan Microsoft Office and Adobe PDF file attachments to prevent privacy or compliance violations, according to the company.

Another new feature is the optional SecurExchange S/MIME module, which automatically encrypts or digitally signs messages based on an organization's policies.

Based on a given message's content, Nemx's software can "invoke an action that secures the message without the user doing anything," said John Young, president of Nemx. He cited the S/MIME model as a feature resellers find attractive. He added that resellers have begun to specialize in outbound content control.

SecurExchange operates within Microsoft Exchange networks. The company earlier this year launched a reseller program.

 
 
 
 
John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.

 
 
 
 
 
























 
 
 
 
 
 

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