November 18th, 2004
The business of business process outsourcing
Can Big Blue succeed in BPO? The latest edition of KnowledgeWharton, published by the University of Penn’s Wharton School, reports that IBM continues to shift away from platforms to services, with nearly half of its $89 billion revenue from last year coming from services. The company got into BPO consulting in a big way with the $3.9 billion acquisition of PricewaterhouseCoopers in late 2002. Earlier this year IBM purchased Daksh, an Indian BPO provider with 6,000 employees. IBM has scored some good deals, but Wharton researchers warn that yanking a process out of a firm and delivering it back as a service is by no means a commodity business. "IBM will have to find ways of automating the processes and migrating at least some parts of the process execution to off-shore locations to remain competitive in these segments."
Joe McKendrick is an author and consultant with deep knowledge and insights regarding trends and developments in the technology industry. See his full profile and disclosure of his industry affiliations.
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