GARTNER DATAQUEST SAYS BSP SERVICES MAY PROVIDE A CHEAPER AND FASTER ALTERNATIVE TO FULL-BLOWN OUTSOURCING.

As enterprises look to ways to source business processes quickly, efficiently, and cost-effectively early signs of the business service provider (BSP) model seem to respond to this need, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Gartner Dataquest defines BSP as the delivery of one or several ongoing, automated, Web-based business services by an external provider in a shared environment.

"By automating the delivery of business process and enabling clients to perform transactions themselves, the BSP model solves may of the limitations of the applications service provider (ASP) and business processing outsourcing (BPO) models," said Rebecca Scholl, senior analyst for Gartner Dataquest's IT Services worldwide group. "The BSP model also goes beyond pure cost reduction and operational enhancement. It enables true process transformation by incorporating business knowledge and technology."

The BSP market is still in its infancy with only a handful of processes provided through a BSP environment. Many more processes are expected to emerge as the BSP model matures and as companies recognize the value of specialization and process automation. But the processes that are good candidates for BSP may not be traditional independent processes. The value of Web-native software is to integrate multiple processes across departments and outside the enterprise to retain the natural flow of a process.

"Multiple flavors of BSP services exist because the level of automation varies across business processes and because clients require different levels of service from their service providers. Some BSP offerings are closer to ASP offerings, such as limited process management and transaction processing, while full-process management and process content are closer to BPO offerings," Scholl said.

Gartner Dataquest recommends investigating BSP opportunities because they provide a cheaper and faster alternative to full-blown outsourcing and ensure true business expertise. However, users and service providers examining BSP opportunities must go slowly and follow certain basic guidelines:

Determine which processes are good candidates for BSP, with a particular focus on cross-functional processes.

Determine which level of service is required - In some instances, a basic level of application maintenance and inquiry support is sufficient; in others, customers expect BSP to deliver full transaction processing or process management.

Establish a sourcing methodology and experiment one step at a time - Even if a BSP is a faster alternative than full-blown outsourcing, a solid sourcing, business process reengineering and integration methodology will avoid disappointments in the long run.

Additional information is available in the Gartner Dataquest Perspective "What Processes Are Good Candidates for BSP?" This Research Brief examines how delivery strategies are changing for professional service segments because of new technologies and what benefits are derived from process and application solutions.

This information is produced by Gartner Dataquest's IT Services group. This group provides a complete picture of the IT services industry including network integration and support, hardware services, consulting and system integration, outsourcing, life cycle service, strategic partnering and services marketing, software support, and vertical markets, including communications, education, financial services, government, healthcare, manufacturing, and retail. To subscribe to one of Gartner Dataquest's IT services programs, please call 408-468-8000. Reports can be purchased on the Internet at www.gartner.com.

Gartner Dataquest is a leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.