Is the BPO industry on the wane? Even though many may consider this sort of apprehension too unlikely, some reports do depict that the industry is not in the right track or failing to gratify the aspiration.

A new report conducted under the auspices of analyst firm Gartner is of the view that almost one quarter of the acclaimed Business Process Outsourcing (BPO) operatives will cease to exist in the form of separate entities by 2012. In accordance with its views, owing to continual rise of new vendors, acquisitions may have a decisive effect on market and this stunning reality will change the BPO provider landscape in the coming years. What should be the necessary task then? Gartner thinks that the enterprises have to search for warning signs while appraising BPO vendors to lessen risks.

“As providers are exposed to the economic crisis, loss making contracts and an inability to adapt to standardized delivery models, many will struggle to survive in their current form. Some will be acquired and some will exit the market completely to be replaced by dynamic new players delivering BPO as automated, utility services,” said Robert H. Brown, Research Vice President, Gartner.

The report “Assess and Manage Vendor Risks to Protect Your Business” has identified six key points to watch for, that might announce the predicted market shakeout. The report also identified the BPO vendors which may be the candidates for acquisition or for instant market exit.

Are you (being a BPO owner) getting nervous hence? Well, the firm has its own suggestion also to steer clear of this. As per the report, you must make every effort to look forward to unprofitable portfolio BPO deals, since a number of BPO providers are carrying unprofitable contract portfolios, mainly originating from excessive, too soon pursuit of the deals, without much thought as to how to transition them to a standardized, rationalized, profitable state of ongoing operations.

Well, this is basically the first and foremost step. If you are skeptical still, you should confer with a veteran.