This IDC study compiled the outline and trends of the business process outsourcing (BPO) market in Japan by market segment. It also analyzes the key functional business outsourcing market, which is divided into human resource, customer care, finance and accounting, and procurement segments, in 2003, and provides forecast up to 2008. This study also includes IDC's recommendations to service providers.

IDC forecasts that the key functional business outsourcing market will reach 1,012.2 billion Yen in 2008 with a compound annual growth rate (CAGR) of 8.8% between 2003 and 2008. User companies have high expectations for using BPO as an option of their business strategies on selection and concentration and cost reduction. "The market environment surrounding companies, such as globalization of business and escalation of market competition, is changing, which calls for operation reform, says Satoshi Matsumoto, senior market analyst, IT services, IDC Japan. He adds that service providers will have to develop strategic services to realize cost reduction of user companies, create new businesses, and increase the value of shareholders.