More and more, Gartner clients
    have been asking about outsourcing their document workflows every year for the
    last three years. We find that enterprises and government agencies are increasingly
    engaging strategic document outsourcing (SDO) providers as a means to cut their
    fixed and overhead costs, avoid capital expenditures, improve business
    processes, ensure compliance with complex regulations and enhance customer communications.
    I'd like to share with you a high-level view of our recent SDO forecast for
    North America. While every company is different, I know from experience that both
    providers and users benefit from understanding whether a market is growing and
    why.


    Gartner defines business
    process outsourcing (BPO) as the delegation of an IT-enabled business process
    to a third party that owns, administers and manages the process. SDO cuts
    across BPO segments, such as enterprise services, customer management, supply
    management and operations segments. SDO focuses on the printed and electronic
    publication of customer communications, including content creation, incoming
    document processing, multi-media presentation and archiving.


    Typically, the outsourced
    documents are generated by ERP systems, CRM and content management databases,
    publishing systems used to create print and electronic output, and inbound
    communications from customers, prospective customers and vendors. The purpose
    of these communications may be marketing, sales, informational or
    transactional.


    Gartner's SDO forecast covers
    the four document life cycle categories: inbound services, in-process
    management services, outbound services and repository services. We project revenue
    growth in the North American market will grow at a 4% compound annual growth
    rate (CAGR) from 2010 through 2015. Overall revenue grew from $16.8 billion in
    2009 to $17.2 billion in 2010 and is projected to grow to $20.8 billion by
    2015. No doubt, you are not alone in considering document outsourcing.


    Clients frequently ask about "inbound
    services," the segment often known as "scan, capture and extract." We project
    this segment will experience strong growth over the forecast period, beginning
    with a 5% revenue increase from 2010 to 2011 and averaging 6.5% revenue growth
    through 2015. This growth is spurred on by end users' need for completely
    automated workflows, competitive price pressures over the longer term and the
    SDO providers' ability to supplement inbound services revenue with other
    value-added SDO services.


    In-process management services
    will experience a 2.9% increase in 2011. Growth in this segment is driven by
    print supply chain management, which will grow mainly because large
    organizations have lost the expertise necessary to purchase marketing materials
    and other printed matter and not because organizations are printing more.


    One of the "traditional" document
    outsourcing categories, "outbound services" will be essentially flat with only
    a 1.9% revenue increase in 2011. Transaction publishing, which is primarily
    paper-based invoices, statements, checks, policies and other similar items,
    remains a drag on the category with a flat 1.6% CAGR through 2015. Transaction
    documents are migrating from higher revenue paper documents to electronic
    presentation, reducing their revenue, albeit at a slow pace.


    Interestingly, our research found that providers have been able to sustain and even
    grow revenue (in one case, by more than 30% from 2009) by bringing on new
    customers that formerly insourced document printing and mailing. Altogether,
    the new mail volume basically offsets the amount lost to electronic communications
    and householding and other techniques that buyers are using to cut the number
    of mailings and the associated (and growing) postage costs. SDO providers see
    the multi-media publishing segment as having significant revenue potential.
    Multi-media publishing incorporates all of the marketing materials and related
    campaigns, whether in print or electronic form, or, ideally, in both.


    Archiving services involve storing
    end users' 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% in 2011 and 4% in 2012.


    Given the fact economic
    conditions on the whole are not improving substantially, companies like yours continually
    look for ways to cut costs and improve document workflows. As you can see from
    the forecast, the strategic document outsourcing market is a buyer's market. Now
    is the time for cost-conscious buyer to engage providers with document process
    improvement expertise, especially outsourcing of the internal scanning and
    high-volume transaction printing processes that are not one of your true core
    competencies.







    PETE BASILIERE is
    the research director at Gartner in the Technology and Service Provider
    organization, providing research and advice on production printing systems and
    applications, strategic document outsourcing (SDO) and 3D printing, including
    best practices, market strategies and technology trends. For the full report,
    visit www.gartner.com.

     

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