The UK Business Process Services market is predicted to grow annually at 7 per cent. The main reason for the increase is the advent of cloud computing.

TechMarketView, a leading IT analyst firm, has increased its November 2010 UK BPS market growth forecast for 2011 from 4.2 per cent to 5.3 per cent. The analyst firm raised its forecast in light of more positive news coming from the industry and some significant new contract awards. The UK BPS market is expected to reach a value of £6.6bn by 2014.

Recovery began in 2011 as public sector investment gradually returned and private sector continues to invest for competitive advantage. Cloud computing is bringing dramatic and disruptive change to UK BPS market as organisations change the way business processes are bought and delivered.

TechMarketView forecasts that the public sector will regain its appetite for outsourcing business processes over the next few years with growth is expected to accelerate sharply to reach 11% by 2014. By this time TechMarketView expects public sector growth to outstrip that in the private sector.

Cloud computing is expected to bring dramatic and disruptive change to the whole BPS market as organisations change the way business processes are bought and delivered. At the same time, customer organisations are pushing their suppliers to price their services according to the value they deliver to the customer rather than the cost or effort to provide them.

Organisations across both the public and private sectors are increasingly adopting cloud business process platforms such as life and pensions, HR, payroll, and revenues and benefits administration systems, to benefit from their greater flexibility, performance and cost of delivery. The emergence of ‘the cloud’ is the catalyst for many of these changes.

John O’Brien, research director said: “It is still very early days in the evolution of cloud-based BPS, however already different approaches are emerging such as on-premise and off-premise delivery, and the use of shared and non-shared platforms. We expect even more to evolve over the next few years. There will be plenty of opportunities for suppliers to benefit, so long as they have successfully made the transition to a platform-based model.” The emergence of ‘the cloud’ is the catalyst for many of these changes, and over the next few years, it will encourage organisations to seek alternative approaches.”