Forrester Research Reveals Business Process Outsourcing Expertise Is Overhyped

CAMBRIDGE, Mass.–([1])–Sept. 2, 2003–The business process outsourcing (BPO) megadeal is a myth. According to “BPO’s Fragmented Future,” a new report from Forrester Research Inc. (Nasdaq: FORR), firms looking to outsource core business processes like human resources, and finance and administration to gain cost savings will not find a single vendor that can manage such complex offerings. The BPO market will grow to $146 billion in 2008, but the marketplace will fragment. Forrester surveyed 82 senior business and IT executives and held in-depth interviews with 12 early adopters of BPO. While BPO initiatives may result in significant cost savings, the report details many examples of vendor hype. Companies experimenting with business process outsourcing report inflexible contracts, difficulty managing vendors, and a lack of performance metrics. “Although some firms show BPO savings, vendors overstate their current offerings,” stated Forrester Group Director John C. McCarthy.

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