$5.4 bln spent on business process outsourcing in Asia-Pacific in 2004

IDC found that the market for business process outsourcing (BPO) services in Asia-Pacific Excluding Japan (APEJ) region was $5.4 bln in 2004. IDC forecasts this market will achieve a compound annual growth rate (CAGR) of 15% from 2005-2009 and generate more than $12 bln in revenues by 2009. This growth will occur despite the challenges presented by the size and complexity of the region’s BPO services market.

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Australia and New Zealand are the region’s early adopters of BPO, followed by the rapidly industrializing economies of Korea, Singapore and Hong Kong due to their high consumption of services. For the developing services market economies in APEJ, BPO deals are just starting to happen. In these countries, cost arbitrage is not an advantage because the cost of labor is already low. IDC finds that what companies in these countries are looking for is business process excellence, speed to market, improvement in quality, and efficient processes, as well as benchmarking to world-class standards. Companies in these countries want to break out of the domestic market and compete globally; hence they need to be up to scratch on world-class standards of service. BPO is being leveraged to help these companies internationalize and acquire the necessary processes and tools to become a globally competitive player.