Across Europe, business process outsourcing accounted for almost $48,000 million in 2002, having grown at more than 9% over 2001. 2001 is not a clear indicator of potential growth, but a look at anticipated growth across business sectors leads us to believe that business process outsourcing will grow at approximately 15% per year, in line with traditional outsourcing and FM indicators.

The important thing to remember is that for many companies, business process outsourcing contracts include document management, e-enablement, and print and mail functions as a part of the business process outsourcing services. This represents another encroachment into the market by companies outside the traditional range of players.

Support for this assertion is seen across the industry as companies tell researchers that they are currently considering outsourcing one or more IT activity or expect to be outsourcing IT activities by 2005. The reasons for outsourcing vary across organisations, and may include lack of resources, a desire for a fast path to a new technology, or the need to streamline after mergers or divestitures. Whatever the driver, requirements re-affirm an anticipated growth of more than 15% per year.

European organisations generally outsource at least 10% of their business requirements, especially when they decide to move to the next generation of technology or change the nature of their core businesses. Some large companies cite mergers, divestitures, and alliances as reasons for outsourcing IT and print-related functions. The process of integrating diverse IT environments and print environments can be so daunting that outsourcing is often the fastest and most reliable path to quick productivity.

Clearly, BPO is a strong candidate for growth across Europe. This market alone is expected to grow to almost $60,000 million by 2005.

Some specific processes that feed business process outsourcing and impact market size assessments include billing and payment services, which drive much of the statement printing process. In Europe, billing accounted for $870.8 million in 2002, which represents about 2.25% of the overall business process outsourcing market. Meanwhile, payment services accounted for about 20% of that market. Indications are that these services will grow dramatically over the next 5 years.

In the U.K., companies like GraphicData Online, Sherwood International/CSL Group, Cap Gemini Ernst & Young/Vertex, Edotech, Xansa, and IPSL (joint venture of Unisys, Barclays, and Lloyds) are already announcing BPO contracts that encompass most facets of document creation, management, print and view delivery, and archiving. The fact that this segment grew 15-fold from 1997 through 2000 makes this an area to watch.

Since all indications show that the outsourcing services segment is growing faster than other market segments, companies in this space who consistently meet customers’ needs will be well-positioned for better than average growth in the future.

This document has been abstracted from the CAP Ventures white paper entitled “Western European Document Outsourcing & Print Facilities Management Market Report: 2002/2003,” which covers the market trends in the service and outsourcing markets relating to printing and print facilities management in Western Europe. For more information about this and other CAP Ventures white papers, contact Allison Jones at (781)-871-9000 or allison_jones@capv.com.

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