The North American strategic document outsourcing (SDO) market is projected to total $17.1 billion in 2010, a 1.7 percent increase from $16.8 billion in 2009, according to Gartner, Inc. The market is expected to reach $17.6 billion in 2011 and reach $20.1 billion in 2014.
“While the SDO market was negatively impacted by the recession and the decision-making paralysis that ensued in most organizations, revenues will grow in 2010 and through the forecast period,” said Pete Basiliere, research director for Gartner. “By 2014, we expect the SDO market to be growing at just over 5 percent a year.”
SDO is the subset of business process outsourcing (BPO) focused on the publication of customer communications, including content creation, multimedia presentation and incoming document processing. The outsourced documents may be transactional forms, sales collateral, direct-marketing materials and more. The documents can be published in physical or electronic media, or a combination of multiple media.
“Large and very large enterprises and government agency clients increasingly engage SDO providers as a means to cut costs, avoid capital expenditures, improve business processes and ensure compliance with complex regulations,” said Mr. Basiliere. “SDO providers who can quickly provide demonstrated cost savings and process improvements that meet or exceed the client’s return on investment (ROI) justification for outsourcing, while also enabling their clients to be more efficient, and can work with their customers’ employees to implement sustainable change, will enjoy the greatest revenue growth potential.”
The inbound services segment will experience an accelerating growth trend over the forecast period, beginning with a 3 percent revenue increase from 2009 to 2010, and rising to an 8 percent increase from 2013 to 2014. The key to this growth is the confluence of the clients’ need for completely automated document workflows, and the SDO providers’ need to take greater “wallet share” by adding more value-added services.
In-process management services will experience a relatively modest 1.5 percent increase in 2010. On-site office services pull down the category’s numbers as fewer enterprises engage providers to manage corporate reproduction departments with services ranging from delivering and picking up mail and packages to volume reproduction of company documents. SDO providers are also minimizing the amount of labor in the on-site facilities by automating as much as possible, driving down revenues as certain services are dropped and the automated services generate lower revenues.
Outbound services will grow 1.3 percent in 2010, primarily due to the drag that transaction publishing and direct mail have on the category. Direct mail is the lowest-revenue SDO segment and will not see much growth; the volume of mail is declining, and specialist providers are scrambling to keep whatever they can. The category’s strong growth is in large measure because of the multimedia publishing segment. Providers indicated that their transaction documents are migrating from higher-revenue paper documents to electronic presentation, reducing their revenues even if they are able to sustain the volume of transactions being published by bringing on new customers.
Repository services, often known as archiving, involves storage of the clients’ documents and other materials in physical and/or electronic format, as well as subsequent retrieval when needed. Cost containment, reduction of primary on-site storage capacity associated with archiving, and e-discovery are the primary drivers for outsourcing the archive function. This segment is forecast to grow 2.0 percent in 2010 and 3.0 percent in 2011.
Source:http://www.documentmanagementnews.com/the-news/general-news/825-gartner-says-north-american-strategic-document-outsourcing-market-to-grow-17-percent-in-2010-.html
