company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its

Chairman

Chalr? Recruitment Outsourcing

A couple of months ago, IBM announced that it was purchasing a 9,000-person call center named Daksh with operations in India and the Philippines. The acquisition is interesting for two reasons. First, IBM previously had no significant call center capacity and with this one purchase has become a major player in the booming offshore industry. Second, the price IBM paid was considered by most people to be irrationally exuberant. According to investment banking firm Avendus, the price was roughly 15 times last year's earnings (or three times annual revenues). Clearly, IBM felt that owning (rather than just leasing) call center capacity was an absolute necessity for its long-term business strategy.

Earlier in the year, Accenture hired a senior call center executive away from the contact center company ICT Group. When I spoke to this executive about his new job, he said he was hired to be "responsible for the world's single largest call center offshore initiative," which involves 6,000 call center seats. Apparently, Accenture is moving into the call center business in a big way as well.

Traveling in the opposite direction, the large call centers are moving into the IT services business, although in a somewhat less grandiose manner. Sykes is a worldwide contact center organization with many service lines including managing tech support for clients like Microsoft and Intel. It has done such good IT support work that it has moved into full-blown IT outsourcing. In the Philippines, Sykes is hiring software developers by the hundreds to do software programming work for its blue-chip clients.

Convergys, another large contact center organization, has hired ICT heavyweights to oversee the company's Information Management Group. Its objective is to focus on developing the company's "higher-value service offerings" in the IT and business process outsourcing (BPO) spheres.

Meeting in the Middle

Another area of budding togetherness for IT and contact center services, BPO is considered the mother lode of outsourcing because it encompasses everything that can be imagined as being outsourced. It is a very big field.

A quick look at the Accenture Web site makes that company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its

imes last year's earnings (or three times annual revenues). Clearly, IBM felt that owning (rather than just leasing) call center capacity was an absolute necessity for its long-term business strategy.

Earlier in the year, Accenture hired a senior call center executive away from the contact center company ICT Group. When I spoke to this executive about his new job, he said he was hired to be "responsible for the world's single largest call center offshore initiative," which involves 6,000 call center seats. Apparently, Accenture is moving into the call center business in a big way as well.

Traveling in the opposite direction, the large call centers are moving into the IT services business, although in a somewhat less grandiose manner. Sykes is a worldwide contact center organization with many service lines including managing tech support for clients like Microsoft and Intel. It has done such good IT support work that it has moved into full-blown IT outsourcing. In the Philippines, Sykes is hiring software developers by the hundreds to do software programming work for its blue-chip clients.

Convergys, another large contact center organization, has hired ICT heavyweights to oversee the company's Information Management Group. Its objective is to focus on developing the company's "higher-value service offerings" in the IT and business process outsourcing (BPO) spheres.

Meeting in the Middle

Another area of budding togetherness for IT and contact center services, BPO is considered the mother lode of outsourcing because it encompasses everything that can be imagined as being outsourced. It is a very big field.

A quick look at the Accenture Web site makes that company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its

usiness in a big way as well.

Traveling in the opposite direction, the large call centers are moving into the IT services business, although in a somewhat less grandiose manner. Sykes is a worldwide contact center organization with many service lines including managing tech support for clients like Microsoft and Intel. It has done such good IT support work that it has moved into full-blown IT outsourcing. In the Philippines, Sykes is hiring software developers by the hundreds to do software programming work for its blue-chip clients.

Convergys, another large contact center organization, has hired ICT heavyweights to oversee the company's Information Management Group. Its objective is to focus on developing the company's "higher-value service offerings" in the IT and business process outsourcing (BPO) spheres.

Meeting in the Middle

Another area of budding togetherness for IT and contact center services, BPO is considered the mother lode of outsourcing because it encompasses everything that can be imagined as being outsourced. It is a very big field.

A quick look at the Accenture Web site makes that company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its

arge contact center organization, has hired ICT heavyweights to oversee the company's Information Management Group. Its objective is to focus on developing the company's "higher-value service offerings" in the IT and business process outsourcing (BPO) spheres.

Meeting in the Middle

Another area of budding togetherness for IT and contact center services, BPO is considered the mother lode of outsourcing because it encompasses everything that can be imagined as being outsourced. It is a very big field.

A quick look at the Accenture Web site makes that company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its

company's direction clear. It now provides 18 categories of services. Some of the new BPO subsidiaries that have been incorporated over just the past few years are Accenture Finance Solutions, Accenture HR Services, Accenture Learning, Accenture Procurement Solutions, Accenture Business Services for Utilities, Accenture eDemocracy Services and Navitaire -- a bewildering number of extensions to the core Accenture brand.

IBM's approach is to keep all BPO work under a single company umbrella, but its BPO focus in the booming Asia-Pacific region is obvious by its hiring practices. As one example, recent full-page employment advertisements in the Philippines are being used to hire boatloads of people required for IBM's outsourcing operations. The advertisements emphasize the need for "previous experience in the areas of customer care, human resources, employee and payroll services." Requirements for IT skills are stated farther down on the page, giving the appearance of being an afterthought.

On the call center side, Convergys is promoting services like billing and employee care (payroll, benefits and other human resource services). Sykes says it delivers "total solutions" to "complement" its CRM services. The large call center StarTek is probably the most bold. It comes right out and calls itself a "Business Process Outsourcing" company.

So what is going on? Why does everyone want to be in each other's business?

There seem to be two main reasons these companies are broadening their product lines into areas that are clearly outside their core expertise. The first has to do with customer requirements. Large blue-chip clients no longer want to buy bits and pieces of service offerings from a jumble of separate suppliers. It's just too complicated and expensive to manage it all. They want to buy a broad range of outsourcing services from a few suppliers (or even just one).

This trend has been happening in the IT sector for some time now. According to Gartner Inc. and most of the major IT analysts, large outsourcing deals have been the "main engine of growth" over the past couple of years, and this trend is expected to continue.

Escaping commodisation is another reason companies are expanding to new frontiers. The most successful IT companies have become so large and their project management procedures so reliable that, to a large and sophisticated client, their service offerings can be difficult to distinguish from those of competitors. In other words, they have become commodity providers -- not that much different from farmers selling pork bellies. This situation has been apparent in the call center industry for some time. The IT companies, on the other hand, aren't used to thinking of themselves in such a manner and probably don't like it very much. But what unique selling feature