This IDC study is an overview of the major business process outsourcing (BPO) contracts signed in 2004 in the U.S. market for the four key horizontal functions of customer care, human resources, finance and accounting, and procurement. Per IDC observation, these segments have driven the greatest activity and interest in BPO during the past year.

This study presents the vertical distribution of these BPO contracts, with a view to investigating BPO adoption trends and drivers characterizing different industries. The study also has the goal of identifying those vertical markets that are the forefront of BPO adoption in these four horizontal markets.

"IDC has found that a handful of industries drove the lion's share of BPO contract activity in the United States during 2004," said Shruti Yadav, research analyst, BPO Services. "Responding to mounting pressures around cost reduction and greater operational flexibility, companies in the manufacturing, government, and retail sectors led the adoption of the BPO engagement model together accounting for more than 60% of all U.S. deals signed over the past year. IDC expects these drivers, in combination with other BPO goals such as technology access and regulatory compliance, to drive further growth in key verticals."