Over the past few years, business process outsourcing has been gaining more widespread acceptance across a range of company sizes and industries. In 2005, IDC observed vibrant BPO activity, and notably, a pickup in small and midisize deals (see IDC#34804for a detailed look on 2005 BPO deal activity). A closer examination of these deals showed that a growing number of midmarket companies were embracing outsourcing as a way to manage their business processes.

From the vendor perspective, a number of the major BPO vendors who have primarily focused on large companies as their target market, have been working to build offerings specifically targeted at the midmarket. Further, IDC has observed the emergence of new BPO vendors whose primary target is to fulfil the perceived gap in BPO services for midmarket companies.

With early signs of BPO activity focused on the midmarket, both from buyer and vendor perspectives, IDC launched a study in December 2005 to more closely examine interest, adoption, and spending plans for BPO among midmarket buyers in the US.

The study focused on the four key horizontal business process areas that have been generating the most interest within the US market: human resources (HR), finance and accounting (F&A), customer care, and procurement. This presentation reports on the findings for F&A.