Horizontal BPO in European FS: Industry Report

Horizontal BPO in European FS

Product Type: Market Research Report
Published by: Datamonitor
Published: July 2005
Product Code: R313-11811

Description

Introduction
Horizontal BPO services are, overall, further advanced in terms of market development than the more sector-specific vertical BPO services. While a great deal of this development has happened in a service bureau or managed service set-up in the past, future growth will be driven by strategic horizontal BPO which emphasizes cross-functionality and process transformation.

Scope
In-depth discussion of human resources, finance and accounting and procurement outsourcing services
Detailed analysis of horizontal BPO vendors operating in the European financial services market
Spending forecasts to 2008 for individual horizontal BPO segments across the European financial services sector
Highlights
There is a move towards a more strategic view of horizontal BPO manifested through the interest in complete centralized shared service outsourcing. Datamonitor views this as a more or less nascent market which, despite drawing on the more fragmented first wave of horizontal services, is in the early stages of growth.

Procurement is set to be the fastest growing horizontal BPO function to 2008. Procurement is moving towards including more strategic aspects such as supplier selection and technology integration of suppliers. Seen as a strong cost play, the procurement BPO segment will benefit from a good fit with FSIs' strongly efficiency-driven strategies.

Increasing vendor credibility has been a key enabler of the move towards a more strategic approach to horizontal BPO. Specifically this has been driven by M&A among horizontal BPO vendors and IT services companies making significant acquisitions in the market.

Reasons to Purchase
Understand drivers and barriers to take-up to enhance sales success in the FS horizontal BPO market segment
Improve positioning in the horizontal BPO market with detailed knowledge of competitors and market perceptions
Understand the dynamics and growth potential of outsourced central enterprise services to improve marketing and sales efficiency

Table of Contents

TABLE OF CONTENTS

CHAPTER 1 EXECUTIVE SUMMARY 3

Market context 3

Competitive dynamics 4

The future decoded 5

CHAPTER 2 MARKET CONTEXT 11

Introduction 11

Key findings 11

Introduction 12

Market segments 12

Human resources outsourcing 13

Finance and accounting outsourcing 14

Procurement outsourcing 15

Drivers and trends 16

IT strategy drivers: balanced approach dominates 16

Moving to strategic BPO 16

Increasing vendors’ credibility 17

Improved openness to horizontal BPO 18

Operational risk regulation makes outsourcing more attractive option 19

Global sourcing strategies 19

CHAPTER 3 COMPETITIVE DYNAMICS 20

Introduction 20

Key findings 20

IT services and vertical BPO providers 22

Process experts 22

Competitive structure 24

IT outsourcing generalists 25

Process experts 26

Key BPO providers 27

Regional horizontal BPO champions 28

Emerging competitors 28

CHAPTER 4 THE FUTURE DECODED 30

Introduction 30

Key findings 30

Outsourcing market segments: procurement grows fastest, but long-term trend narrows growth discrepancies 32

Line of business trends: retail banking to grow most over period 34

Retail banking 34

Financial markets 35

Insurance 36

CHAPTER 5 APPENDIX 37

Abbreviations 37

Forecasts and assumptions 37

What currencies are used? 37

Future readings 38

SPP writing team 38

LIST OF TABLES

Table 1: Horizontal BPO segment growth in financial services, 2004 - 2008 32

Table 2: Horizontal BPO services spend per line of business, 2004 - 2008 34

LIST OF FIGURES

Figure 1: Market context 3

Figure 2: Competitive dynamics 4

Figure 3: The future decoded 5

Figure 4: Market maturity model: the horizontal BPO market has gained critical mass and needs to tackle the transformational challenge to boost future growth 12

Figure 5: Human resources outsourcing 13

Figure 6: Finance and accounting outsourcing 14

Figure 7: Procurement outsourcing 15

Figure 8: What will be the primary drivers of your IT strategy in 2005? 16

Figure 9: Horizontal BPO openness is ahead of vertical markets, but strong growth can continue with interest remaining high 18

Figure 10: Vendor map 24

Figure 11: Competitive positioning 25

Figure 12: Horizontal BPO segment growth in financial services, 2004 - 2008 32

Figure 13: Line of business horizontal BPO growth in financial services, 2004 - 2008 34

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