European organizations will spend more money on business process outsourcing (BPO) services between now and 2011, a report from Forrester Research has predicted.

The analyst firm said its projections for BPO expenditure, growing at a five-year compound annual growth rate of 11.5%, mean that the BPO will see the highest growth of all IT service categories that it tracks.

Sonoko Takahashi, researcher at Forrester Research, said that financial services and public-sector organizations buy the most BPO services.

“Government and public services agencies, especially in the UK, also spend big on BPO, with several councils and government departments closing HR-flavoured deals for payroll and pension administration. Cases include London’s Metropolitan Police contract with LogicaCMG and the UK Crown Prosecution Service’s deal with Atos Origin,” she added.

Organizations will use BPO services in several areas, including human resources, financial services back-office, procurement, finance and accounting, and customer care.

Total European spending will rise from Euro 11.0bn (7.5bn Pounds) in 2006 to Euro 18.9bn in 2011, with human resources BPO attracting the largest spend, followed by spending on financial services back-office BPO.