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Corporate Governance Key Factor In APEJ BPO Effectiveness

• Corporate governance will be a key consideration – IDC has found that over the past 12 months, both enterprises and vendors are quicker to recognize the importance of establishing corporate governance structures before proceeding with BPO implementation. Companies that have their internal processes mapped out are able to benchmark and measure performance more effectively than companies that were disorganized.
• Enterprises raise concerns of BPO security – Enterprises are increasingly demanding stricter security and data privacy measures to ensure that sensitive information, such as personal data, bank account details and other confidential information do not leak out once transferred into the hands of third party vendors. Prominent BPO vendors have also gone to great lengths to ensure that adequate security, back up and safety systems are in place to minimize the breach of highly sensitive information.
• BPO mega deals are few and far between – The market should not expect to see many mega BPO deals (in excess of US) in APEJ, the likes of which occur more often in the US and Western Europe. Instead, expect to see more piece-meal, ad hoc and customized BPO deals that are smaller in contract size (less than US). The complex, diverse and non-homogenous market dynamics of APEJ mean that more targeted, specialized and local BPO deals will become more common instead of mega deals that span large functions and operations across the entire enterprise.
• Rise of the Indian BPO players – Long regarded as being cost effective in IT implementation, Indian players have successfully leveraged IT outsourcing and forayed into BPO services with a strong concentration on the finance and banking sectors.
• China still needs time to develop – Cost will not be a major advantage for BPO given the existing low cost of doing business in China. BPO will be seen more as a driver for best practices benchmarking that will allow Chinese companies to expand more rapidly and tap into markets beyond the local frontiers.

Under IDC’s definition, Business Process Outsourcing is distinct from Processing Services. IDC regards BPO as more strategic and involves transformational activities that align a company's outsourcing engagements to corporate objectives. For example, an ongoing engagement by a bank to hire a vendor to look at benchmarking and advisory on how to increase customer response time would be considered a BPO engagement. However, if it is just outsourcing check processing to a vendor to do it more cheaply at bulk, that would not be considered BPO but rather processing services.

IDC's Asia/Pacific BPO program covers qualitative and quantitative research for BPO across horizontal functions ranging from Human Resources to Finance and Accounting to Customer Care. IDC tracks BPO that is consumed locally and not exported. Thus, if a U.S. company engages a BPO vendor in India for services delivered to the U.S., that is considered a BPO export and not counted as part of IDC's study.