The BPO demand environment took center stage this week as Genpact and EXLService reported results. Our takeaway was that the demand environment for BPO is healthy. There are a number of data points to confirm this. Solid quarterly results from the BPO players. Positive commentary regarding BPO provided by larger IT services firms and outsourcing consultants. We remain positive on the fundamentals noting that as BPO continues to gain steam the enthusiasm will get built into stock prices. We encourage those interested in the space to play the long term fundamentals. We remain focused on trends that are emerging, including the race up the value chain as companies move from services and/or software to solutions. The catalysts are cost cutting, regulatory (financial services & healthcare), and new technologies (cloud, analytics, and mobile). Our BUY-rated names are IBM (IBM), Accenture (ACN), Cognizant (CTSH), Syntel (SYNT), Virtusa (VRTU), Genpact (G), and ExlService (EXLS).
Joseph D. Foresi
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].