The number one driver behind the growth in the BPO market today is an increase in the number of enterprises that are reviewing their internal operations in an attempt to more fully understand their true core competencies, and focus on only those competencies. This decision process often includes an evaluation of the cost of owning technology - with it's associated support costs that are not core to the enterprise. This is leading to an increased willingness to outsource processes considered non-core, yet critical - activities such as claims administration, HR services and payment services.

A secondary driver of growth in this market is a desire by enterprises to improve their current service levels. BPO offers enterprises an opportunity to do so in many cases, and at the same time removes the requirement for the capital expenditure that would be necessary if the enterprise sought to improve those service levels internally. Service providers who can best communicate their ability to deliver significant process improvement (as opposed to simply taking on an existing process in a status quo manner) are likely to emerge as the market leaders who will change the way in which business has traditionally been done.

The third most prominent driver of growth in this market - not surprising given the current economic environment - is a desire by enterprises to extract all possible costs from within their internal operations. Any chance of decreasing transaction-processing costs frees up precious capital that can then be applied to more strategic initiatives.

Over a period of time, enterprises will increasingly narrow those activities they deem to be 'core, and critical'. An example of an early adopter of this view is a company such as Nike, whose core competency is brand management, with all other activities carried out by external service providers. As this view of what is a 'core' process narrows, and is increasingly adopted by enterprises at large, more and more processes will become candidates for BPO.