At San Jose Directions yesterday, I got to participate in a panel addressing the vendor community on how to unlock the potential of industry-specific BPO. The panel was led by David Tapper from IDC, and analysts from the Health and Industry Insights groups were with me on the panel. We know that technology providers from outside of our industry (and even some that focus on financial services) often have difficulty connecting their offerings to our business needs. So our discussion highlighted key industry issues and dynamics that may be helping or hindering adoption of BPO. What I talked about in financial services is the enormous disruption we will see over the next 5 years as the number of US banks shrinks dramatically, and at the same time individual institutions must shrink their cost base to adjust to a shrinking revenue base. I see this as having huge implications in back-office processing, including more adoption of BPO for what really are "utility" functions within banks. Ripe for outsourcing are functions such as reconciliation and payment processing – requiring large technology investments to increase efficiency, but also delivering very little in the way of customer service or product differentiation for most banks. In keeping with some of the "big tent" presentations, we also talked about how SaaS and cloud computing will evolve BPO and can dramatically increase the scalability of industry-specific BPO. For me, I wonder how aggressively banks will move operations and technology to BPO providers. And who will be the big winners? Dave's blog touches on Nicholas Carr and his assertion that we are in the midst of a "Big Switch" – from private computing to utility computing – how will this macro-level adjustment affect BPO in our industry?