While expecting growth to $146 billion, Forrester Research Inc. of Cambridge, Mass., is predicting the emerging market will soon "fragment."

The process of outsourcing human resource functions, accounting, customer service and marketing grew tremendously during the 1990's in both substance and "myth," the study reports.

Forrester surveyed 82 senior business and IT executives and held in-depth interviews with 12 early adopters of "business process outsourcing," as it is called. While BPO initiatives may result in significant cost savings, the report details many examples of vendor hype.

Companies report inflexible contracts, difficulty managing vendors, and a lack of performance measurements.

Forrester Group Director John McCarthy said, "Although some firms show BPO savings, vendors overstate their current offerings."