Tuesday, September 22, 2009

Trend spotting: Back-Office services

The year has seen recession-hit companies sell captive business
process units. Ostensibly to shore up the balance sheet & concentrate
on their core business. Citigroup, Aviva, AIG among others and more to
come.
BPO vendors lap up these captives for inorganic expansion of service
offering, geographies & domains served and client-baskets.
Here's a fundamental problem waiting to be solved. On the one hand
there is a huge appetite for back-office (BO) - the non-core
'plumbing' in every company. Never mind the sale of captive BO units.
That only highlights the other side of the coin. One can no more
accurately predict the cycles in business & economy. Demand for BO
services may spike in good times & will certainly be restrained in the
bad.