After having won a majority of contracts from large BPOs during the last year, leading software firms with back office arms are all set to become bigger players in the BPO market, says research firm Datamonitor.

Companies such as Tata Consultancy Services (TCS) and Cognizant accounted for almost 80 per cent of the total value of large BPO contracts awarded in the past year. According to the research firm, 54.3 per cent of all large BPO deals were signed by IT services vendors having BPO arms, and not specialist BPO firms.

Vamshi Krishna Mokshagundam, an analyst with Datamonitor India, said that although the the BPO players did account for 44.7 per cent of all announced deals, their cumulative contract value reflects only 19.5 per cent of overall deal value.

Amidst the period of recession, the biggest deal so far was Citigroup's $ 2.5 billion contract, which was bagged by TCS, following its acquisition of Citi’s BPO arm in India, despite questions surrounding Citi’s financial stability. Similarly, Cognizant, known for its strong presence in healthcare and lifesciences, has won a $ 95 million deal for clinical data management from Astra Zeneca, probably the largest publicly announced deal in knowledge process outsourcing (KPO).

In terms of revenue figures also, IT firms have shown a greater focus on BPO recently. Infosys saw its IT services revenues grow from $931.5 million to $1,101 million in the 12 month period to September 2008, whereas its BPO revenues grew from $53 million to $72 million. In other words, IT services have grown by 18 per cent, compared to a 36 per cent growth in BPO revenues. X