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NelsonHall Business Process Services Confidence Index Shows High Expectations for 2015

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NelsonHall’s Business Process Services (BPS) Confidence Index is a quarterly index of confidence to monitor changes in industry confidence in the global business process services market.

The objectives of the quarterly “BPS Confidence Index” are to identify:

  • Whether the demand for business process services has strengthened or softened in the past quarter
  • Expectations of how the relative demand for business process services will change over the coming year
  • The factors that are influencing change in demand
  • The characteristics of contracts that are showing relatively high and low acceptance
  • To produce a “Business Process Services Index of Confidence” that will be widely reported and used in reference to the business process services market.

The survey is open to all BPS service providers and participation is free-of-charge. To participate, please contact Paul Connolly.

The NelsonHall BPS Confidence Index score for Q1 2015 is 156 (out of 200), reflecting strong supplier confidence in BPS in 2015 relative to 2014.

Overall, the current economic climate is in general assisting the BPS market by maintaining a significant level of cost pressure, while the combination of cost pressure and technological advance is increasingly encouraging companies to look outside their own boundaries for new business models.

Accordingly, while emphasis on cost reduction remains high, BPS is increasingly being driven by organizations seeking to achieve transformation and to achieve revenue protection and growth. However, the geographic focus of these initiatives has switched back to company's core economies, with support for growth in emerging economies becoming a much less important driver of BPS adoption.

Nonetheless, despite this increasing optimism, frozen decision-making and business uncertainty are still significant inhibitors to adoption of BPS services, with the proportion of global clients and prospects whose sourcing decision-making is frozen reported to be 26% and clients and prospects are continuing to seek aggressive cost reductions, which can act as an impediment to deal completion.

By service line, F&A BPS was reported as exhibiting above average growth in Q4 2014, ahead of HR BPS and contact center services, as were the related and emerging areas of procurement BPS and supply chain management and this pattern is broadly expected to be repeated during the remainder of 2015.

By sector, BPS vendors continue to have very high expectations of the healthcare sector, across both healthcare providers and healthcare payers. Expectations are also high for the manufacturing sector, particularly in those sub-sectors strongly impacted by new technology such as high-tech, pharmaceuticals, and automotive.

By geography, growth expectations are particularly high for North America relative to Europe where expectations are relatively muted as is the case for Latin America. Growth expectations are moderate for Asia Pacific, with the exception of an expectation of high growth in Australia.

Contract scope and value is reported as increasing over the past 12-months, as contractts become for end-to-end and support for high-end decision-making increases, though contract lengths remain largely unchanged.

If you would like to register for the next BPO Index webcast, scheduled for the 2nd July, 2015, you can do so here.

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