The business process outsourcing market is expected to touch $1 trillion by 2006, registering a compounded annual growth rate of 9 per cent, with the United States accounting for 60 per cent of the global BPO market spending, according to an Assocham-IDC report.
The Asia-Pacific region is likely to be the fastest growing in the world in terms of spending on the BPO market. The Europe, Middle East and Africa (EMEA) region is expected to witness a steady growth in its IT spending during 2004-06, with the United Kingdom leading the way.
Driven by prosperity to outsource, cut costs and focus on core competencies, US accounts for 60 per cent of the global BPO market spending and this trend is likely to continue during 2004-06, it said.
"But US is likely to experience the slowest year-on-year growth in spending on the BPO market while their Asia-Pacific counterparts are likely to see robust growth annually during this period," it said.
The BPO service providers space is facing a structural change as customers expectations and preference are evolving over a period of time.
In a survey done by IDC in US among Fortune 500 companies, the respondents preferred a blend of business and technical capabilities in the BPO service providers, the report said.