Brazilian BPO End-user Study

This Frost & Sullivan research service titled Brazilian BPO End-user Study provides an overview of the landscape in the country, with end-users information regarding the current behavior of business process outsourcing (BPO) adoption and future trends within different types of business process outsourcing services.

Market Overview

BPO Services in Brazil Go beyond Cost-cutting Considerations

Business process outsourcing has grown significantly in Brazil, presenting a compelling business case for organizations striving to reduce operating costs, improve quality, and redeploy resources toward core activities. With these advantages, companies can compete and achieve at very high levels of competition. "Customers today have a choice of BPO service providers and an array of outsourcing models to best suit their business needs," notes the analyst of this research service. "However, as in the case of any economic restructuring chapter the world has seen, this new wave of globalization faces its share of short-term challenges - some political, some economic." The BPO market in Brazil is very divergent, consisting of many companies that have attained a level of process maturity and others, at the other end of the spectrum, that are unaware of the potential within the outsourcing concept. Multinational corporations have deployed the BPO service provision model following its adoption in their headquarters. On the other hand, there are top corporations located outside the south and southeast regions of Brazil remaining oblivious of the BPO service providers and the real value of the service.

Adoption levels in the region remain basic. Companies have not ventured into the complex BPO areas and have restricted themselves to basic contact center and human resource processing services. Considered in the light of the global economic slowdown, BPO services offer end users the opportunity to leverage the advantages and procure complete, lucrative contracts.

Price and Security Issues Prove to be Major Stumbling Blocks for the Market

As BPO services are perceived as expensive, initial hiring or extended contract plans are not considered feasible. "For companies that do not have any current BPO services and have no plans to contract one in the near future, the pricing factor is the main restraint for approximately 60 percent of them," says the analyst. "The remaining 40 percent represents companies that do not perceive any value in BPO services or have information security issues in passing the activities to a third-party provider." In the case of companies that have deployed BPO services and are willing to experiment further, quality of service acquires meaningful dimensions and past experiences with the current provider will strongly impact the decision process. Flexibility of the provider is another important criterion for companies that are amenable to the concept of outsourcing.

The element of hesitancy displayed by companies to delegate the management of processes to a third party is another factor impeding growth. An interesting observation made was that certain companies have utilized some kind of BPO service but are unwilling to extend it to other processes. This is attributed to the lack of confidence in the security provided in dealing with multiple or more advanced tasks. Participants in this space must work toward finding solutions to overcome such barriers. In addition, to move up the value chain, vendors must expand their repertoire to include high-end services such as equity research and analytics, CAD/CAM research and development, biotech and pharmacy research.