Washington (June 1, 2004) -- Buoyed by a projected 26 percent compounded annual growth rate, the value of global contracts for the outsourced procurement of services and goods is expected to more than triple from $200 million currently to $640 million by 2008, reports market research firm NelsonHall.

The financial services sector, along with high-tech/manufacturing, is showing the most interest in outsourced procurement activity among industry segments. The principal categories being targeted by procurement outsourcers currently include IT, business travel, telecommunications, contract labor, and office supplies and equipment. Growing areas include professional services, marketing, and MRO (maintenance, repair and operations) materials.

The NelsonHall findings follow on the heels of last month's report that back-office business process outsourcing contracts awarded globally during the first quarter were dominated by finance and accounting services, rather than human resource services, which had previously prevailed. However, the bulk of BPO contract value worldwide (78 percent) was derived from front-office (sales, marketing and customer relationship management) and middle-office (e.g., check processing and insurance/benefits administration) services. Back-office accounting, HR and procurement outsourcing services represented only 22 percent of global BPO contract value.

"By geography, the BPO market continues to develop more strongly in North America than in Europe, with Asia making an increasing contribution to [the first quarter of] 2004," notes NelsonHall.

-- WebCPA staff

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