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IDC: BPO to Grow 10 Percent Annually
By John Moore, Ziff Davis Internet

The worldwide business process outsourcing market will expand at a 10.9 compound annual growth rate through 2009, International Data Corp. said this week. IDC called the market “vibrant and brimming with opportunity.”

The market, according to IDC, will reach $641.2 billion in 2006 compared with $382.5 billion in 2004.


IDC identified procurement and training as among the fastest-growing BPO segments. Those areas will experience high double-digit year-to-year growth over the five-year forecast period, according to the company.

Procurement outsourcing has gained momentum in recent months with prominent deals including Walt Disney Co.’s $1.3 billion outsourcing initiative involving the procurement function. Earlier this month, Mercer Human Resource Consulting awarded IBM a $58 million contract to manage its IT procurement systems, among other areas.

The human resources and finance and accounting segments also are seeing BPO activity, IDC said.

Affiliated Computer Services Inc., which derives 75 percent of its revenue from BPO, recently cited finance and accounting BPO as having the highest growth rate in the company. During an analyst teleconference last week, Mark King, ACS president and chief executive officer, also pointed to human resources outsourcing as an area of strength.

EDS Division Wins Insurance Pact

EDS-SOLCORP, a division of Electronic Data Systems Corp., will provide its hosted insurance software solution to Hub Financial Inc., a managing general agency in Canada.

The deal hinges on EDS-SOLCORP’s WealthServ-Insurance software. WealthServ automates such functions as case management, carrier connectivity, and broker compliance and compensation. The company’s WealthServ product line accommodates the converging product offerings of managing general agencies and securities dealers.

“We are aiming at investment shops that are cross-selling insurance and insurance distributors who are cross-selling investments,” said Alex Sweeny, vice president of strategic business development at EDS-SOLCORP.

Hub Financial is a subsidiary of Chicago-based Hub International Ltd., an insurance brokerage that provides both insurance and investment products.

EDS-SOLCORP’s WealthServ solution, which debuted earlier this year, targets a historically fragmented market, Sweeny said. “The marketplace is served by small, fragmented solution vendors,” he noted. Those solutions, he added, tend to be geared toward investment dealers or insurance brokers, but not both.

Next Page: Manhattan Associates Nabs Apparel Deal.

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