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October 13, 2006
Next stop for BPO: The Mid-market?
As with IT outsourcing, most business process outsourcing so far has focused on large companies. It makes sense. The big corporations have the budgets and the scale that make outsourcing (and especially off-shoring) practical. Plus, for the big Indian tech services outfits, the focus is on selling BPO services to clients who are already using them for IT stuff. But as the BPO market grows it will also broaden. Eventually, it seems likely, tens of thousands of companies--not just hundreds--will be handing back office work off to specialists who can do it better and cheaper.
I got my first hint of this incipient trend today, when some of the folks from Motif dropped buy. This is a six-year-old Indian firm that until one year ago supplied back office services as a subcontractor through PRC, the big Florida-based call center operator. It has started selling directly to clients and so far has landed eight of them including Mellon Bank, eBay, Priceline, and ACS. John Coker, the CEO, is a 30-year IT and operations veteran of the financial services industry who was hired to develop the mid-market. "This is virgin territory. We think we can grow to be a couple of hundred million dollar company in seven to 10 years," he says.
Right now, Motif is very small. Just 350 employees. Mostly in India, but 30 in the Philippines and 4 in Morristown, N.J. Coker figures he can play on the company's track record and offer to help companies make their first steps into BPO--starting with staffing levels of 10-15 people. "A lot of companies don't know how to go about this. If they go to the big services firms like Genpact, those outfits want to give them 100 people or tell them to forget about it. We can start small and help them learn how to outsource gradually," Coker says.
Motif seems well positioned to handle these kinds of engagements. Its big challenge will be convincing cautious companies to take those first risky steps.
Is there anybody out there who?? already making a big business out of the mid-market?
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