As offshore business process outsourcing (BPO) firms look to expand their business models, they are reportedly angling to make acquisitions, especially in geographies with growing demand for outsourced services, such as Europe.
But two recent acquisitions by India's Cognizant Technology Solutions point the way to what could become a broader trend, the convergence of BPO and software-as-a-service.
As Jeff Kaplan writes in his THINK IT Services blog, Cognizant last month announced its purchase of marketRx, which provides Web-based analytics and other services to life sciences companies. And last year Cognizant bought AimNet Solutions, an IT infrastructure managed service provider.
These types of purchases help BPO firms "shift their operations from a labor-centric to a software enabled model," writes Kaplan, an important consideration in an industry experiencing problems with staff shortages and attrition. BPO providers can use SaaS to automate their existing processes and services and to add new ones.
So are these companies in the BPO business or the SaaS business? It really doesn't matter, says Kaplan.
Industry analysts and investors may be concerned about these categorizations, but most customers will see this company and larger vendors like Cognizant as business services companies.