Gartner has warned that the combined pressure of market consolidation and loss-making contracts will push one in every four providers of business process outsourcing services out of operation by 2012.

"As providers are exposed to the economic crisis, and loss-making contracts, and an inability to adapt to standardized delivery models, many will struggle to survive in their current form," the analyst house has said. Some will go bust, Gartner has suggested, under the weight of carrying unprofitable contract portfolios.

It cautions that enterprise BPO contracts could be put at risk as the market shape changes in the coming years.

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