Japan Business Outsourcing 2006-2010 Forecast

This IDC study analyzes the situations and trends in the Japan business outsourcing market based on IDC's definition of key horizontal business functions, namely human resource (HR), customer care, finance and accounting (F&A), and procurement, and compiles the forecast of each function. This study particularly analyzes the market situation in 2005, provides a forecast from 2006 to 2010, and includes IDC's recommendations to SPs.

More and more companies are using the business outsourcing market in Japan amid expectations for "work reform/improvement,", "reduction of operation cost," and "supplement of labor force/expertise" among companies. The business outsourcing market in Japan marked year-on-year growth of 10.8% to reach 785.9 billion yYen. IDC forecasts that the market will maintain positive growth although the year-on-year growth rate will gradually decrease as the market expands. IDC Japan's IT Sservices senior market analyst, Satoshi Matsumoto, says, that "as the economy becomes more service-oriented and the HR service market becomes active, many service providers are entering the market and the market competition is intensifying. He says that service providers used to have advantages in different service abilities depending on their background industries and track records, but it is becoming difficult to differentiate competitors as service contents sought by user companies are diversifying and expanding. He adds that it is important for service providers to develop services with high added-values such as "consulting" and "systemization of business activities" in addition to the main service of labor-intensive business activities.