Report Overview
The global business process outsourcing market size was valued at USD 221.5 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 8.0% from 2020 to 2027. Reduced international trade barriers and improved telecommunication and IT capabilities have led to a situation where organizations are increasingly interlinked with each other for carrying out business. Moreover, organizations are focusing on reducing the cost of conducting business to access global resources to meet the demands of the industry. Thus, organizations are leveraging the benefits of outsourcing and are focusing on core competencies, thereby generating avenues in the market for business process outsourcing.
The major operations offered by Business Process Outsourcing (BPO) services include business administration, supply chain management, sales, marketing, and customer care services. The players in the market for business process outsourcing are engaged in providing reliable and cost-effective services across various industries and sectors such as BFSI, manufacturing, retail, IT and Telecommunications, and healthcare. The aforementioned industries comprise a few of the major application areas of business process outsourcing, and companies operating in these verticals prefer to incorporate business process outsourcing are part of their business strategy, in order to allow them to focus on their fundamental business activities and ultimately increase their profitability.
The business activities of an organization are classified into critical activities, core activities, and non-core activities. Core activities are the company’s primary competencies that give the company a strategic advantage. Critical activities require specialized skill-set. Similarly, non-core activities are supporting activities that largely involve relationship management between consumers and products. Classifying these activities is vital in order to allocate resources appropriately to ensure timely delivery of services. Nowadays, companies have begun to place greater emphasis on core activities with a view to maintain their market presence and expand their customer base, which results in the outsourcing of resources for non-core activities.
Companies engaging in business process outsourcing can choose to outsource specific services or business functions based on their individualistic requirements. These services include payroll, IT, logistics, and legal services. Reduction of labor costs as well as reducing and/or eliminating overheads arising from human resources and equipment are some of the potential benefits of outsourcing. Furthermore, business process outsourcing services offer higher flexibility as it enables businesses to retaliate faster to changing market dynamics by adapting the BPO processes as the market changes. For instance, organizations don’t have to invest in high capacity in-house servers or need not be concerned about outdated technologies.
Services such as training and recruitment require additional efforts and time. Owing to this, some companies prefer to outsource human resource services. For instance, Accenture is one of the pioneers engaged in offering human resources and finance and accounting services. The company’s human resource service includes workforce performance, recruitment, payroll, benefits and compensation, and other learning and employee services. The company’s human resource services cater to clients such as Microsoft, General Motors, IBM, and Goodyear.
Service Insights
The service segment has been further segmented into finance and accounting, human resources, knowledge process outsourcing, procurement and supply chain, customer services, and others. The others segment includes legal and tax, logistics, and training. The customer services segment held the largest market share of over 30.0% in 2019 and is predicted to register the highest growth rate over the forecast period. The customer service BPOs are specialized in handling customer queries that are generated through chat, email, social media, phones, and other channels.
The growing establishment of service centers that require online and offline technical support is fueling the growth of the customer service segment. Furthermore, the finance and accounting segment is expected to grow at a significant rate over the forecast period owing to the increasing presence of banking facilities and stringent regulatory requirements in the banking sector resulting in the requirement of outsourcing services. The finance and accounting services include internal audit, capital budgeting, general accounting, treasury risk and management, and tax services.
End-use Insights
The BPO industry offers its service across various end-use industries such as BFSI, healthcare, manufacturing, IT and telecommunications, retail, and others. The others segment includes travel and transportation, government, education, construction, and utilities. The BFSI segment secured a market share exceeding 30.0% of the global business process outsourcing market in 2019 and is anticipated to grow at the highest rate from 2019 to 2027. Customer focus on services such as service expediency, real-time interactions, and faster complaint resolution has resulted in BFSI companies outsourcing customer service activities.
Report Overview
The global business process outsourcing market size was valued at USD 221.5 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 8.0% from 2020 to 2027. Reduced international trade barriers and improved telecommunication and IT capabilities have led to a situation where organizations are increasingly interlinked with each other for carrying out business. Moreover, organizations are focusing on reducing the cost of conducting business to access global resources to meet the demands of the industry. Thus, organizations are leveraging the benefits of outsourcing and are focusing on core competencies, thereby generating avenues in the market for business process outsourcing.
The major operations offered by Business Process Outsourcing (BPO) services include business administration, supply chain management, sales, marketing, and customer care services. The players in the market for business process outsourcing are engaged in providing reliable and cost-effective services across various industries and sectors such as BFSI, manufacturing, retail, IT and Telecommunications, and healthcare. The aforementioned industries comprise a few of the major application areas of business process outsourcing, and companies operating in these verticals prefer to incorporate business process outsourcing are part of their business strategy, in order to allow them to focus on their fundamental business activities and ultimately increase their profitability.
The business activities of an organization are classified into critical activities, core activities, and non-core activities. Core activities are the company’s primary competencies that give the company a strategic advantage. Critical activities require specialized skill-set. Similarly, non-core activities are supporting activities that largely involve relationship management between consumers and products. Classifying these activities is vital in order to allocate resources appropriately to ensure timely delivery of services. Nowadays, companies have begun to place greater emphasis on core activities with a view to maintain their market presence and expand their customer base, which results in the outsourcing of resources for non-core activities.
Companies engaging in business process outsourcing can choose to outsource specific services or business functions based on their individualistic requirements. These services include payroll, IT, logistics, and legal services. Reduction of labor costs as well as reducing and/or eliminating overheads arising from human resources and equipment are some of the potential benefits of outsourcing. Furthermore, business process outsourcing services offer higher flexibility as it enables businesses to retaliate faster to changing market dynamics by adapting the BPO processes as the market changes. For instance, organizations don’t have to invest in high capacity in-house servers or need not be concerned about outdated technologies.
Services such as training and recruitment require additional efforts and time. Owing to this, some companies prefer to outsource human resource services. For instance, Accenture is one of the pioneers engaged in offering human resources and finance and accounting services. The company’s human resource service includes workforce performance, recruitment, payroll, benefits and compensation, and other learning and employee services. The company’s human resource services cater to clients such as Microsoft, General Motors, IBM, and Goodyear.
Report Coverage & Deliverables
- Competitive benchmarking
- Historical data & forecasts
- Company revenue shares
- Regional opportunities
- Latest trends & dynamics
Service Insights
The service segment has been further segmented into finance and accounting, human resources, knowledge process outsourcing, procurement and supply chain, customer services, and others. The others segment includes legal and tax, logistics, and training. The customer services segment held the largest market share of over 30.0% in 2019 and is predicted to register the highest growth rate over the forecast period. The customer service BPOs are specialized in handling customer queries that are generated through chat, email, social media, phones, and other channels.
The growing establishment of service centers that require online and offline technical support is fueling the growth of the customer service segment. Furthermore, the finance and accounting segment is expected to grow at a significant rate over the forecast period owing to the increasing presence of banking facilities and stringent regulatory requirements in the banking sector resulting in the requirement of outsourcing services. The finance and accounting services include internal audit, capital budgeting, general accounting, treasury risk and management, and tax services.
End-use Insights
The BPO industry offers its service across various end-use industries such as BFSI, healthcare, manufacturing, IT and telecommunications, retail, and others. The others segment includes travel and transportation, government, education, construction, and utilities. The BFSI segment secured a market share exceeding 30.0% of the global business process outsourcing market in 2019 and is anticipated to grow at the highest rate from 2019 to 2027. Customer focus on services such as service expediency, real-time interactions, and faster complaint resolution has resulted in BFSI companies outsourcing customer service activities.
Meanwhile, following the BFSI segment, the IT and telecommunications segment is expected to exhibit the second-highest CAGR exceeding 8.0% owing to the growth of IT companies and rapid industrialization across the globe. Additionally, support from the government to improve the global economy by encouraging other sectors such as banking and healthcare to boost their investments in technology is expected to fuel market growth. For instance, according to the National Association of Software and Services Companies (NASSCOM), a trade association for the information technology industry in the Indian BPO market stated that the IT-BPO industry was valued at USD 12.0 billion and is expected to reach USD 118.0 billion by the end of 2018.
Regional Insights
The European market for business process outsourcing accounted for more than 26.0% of the global market share in 2019. The regional market growth is accredited to the provision of flexibility and customization of the service offerings in order to better meet individual needs coupled with rising demand for cloud computing technology. Additionally, the availability of a skilled workforce coupled with the quality of service and operational efficiency are the major factors that are driving the companies to outsource their business processes to the European countries.
The Latin American market for business process outsourcing is projected to witness a CAGR exceeding 6.0% over the forecast period. The regional market growth is ascribable to the rising growth of the manufacturing and Consumer Packaged Goods (CPG) industries in this region. Additionally, increasing support from the Latin American government towards the promotion of English language learning programs in order to gain attraction from global service providers in several Latin American countries is also anticipated to propel market growth. The cost-effective pricing structure and Spanish and Portuguese language skills are further generating avenues in the market for business process outsourcing in Latin America.
Key Companies & Market Share Insights
The competition in the market for business process outsourcing results from the presence of major global players such as Accenture, Infosys Limited, HCL, Wipro, Capgemini, and Amdocs. A diverse range of services allows companies to gain a competitive edge in the market for business process outsourcing. For instance, Capgemini, one of the pioneers in the BPO industry, is engaged in offering multiple BPO services such as financial services, supply chain and procurement, and business analytics.
These market players particularly focus on entering into mergers and acquisitions and joint ventures/collaborations in order to enhance their market presence. For instance, in July 2018, Wipro Limited announced the acquisition of Alight HR Services in India for a total deal value of USD 1.5 billion. The company offers human resource outsourcing, IT outsourcing, and finance process outsourcing. Companies are focusing on setting up new BPO centers across the globe to expand their market presence and augment their existing customer base. For instance, in September 2017, Infosys Limited announced the establishment of a new service center in the Netherlands. This office will be engaged in providing finance and accounting and other end-to-end outsourcing services.
Business Process Outsourcing Market Report Scope
Report Attribute | Details |
Market size value in 2020 | USD 237.0 billion |
Revenue forecast in 2027 | USD 405.5 billion |
Growth Rate | CAGR of 8.0% from 2020 to 2027 |
Base year for estimation | 2019 |
Historical data | 2016 – 2018 |
Forecast period | 2020 – 2027 |
Quantitative units | Revenue in USD billion and CAGR from 2020 – 2027 |
Report coverage | Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered | Service; end-use; region |
Regional scope | North America; Europe; Asia Pacific; Latin America; Middle East & Africa |
Country scope | U.S.; Canada; UK; Germany; France; China; India; Japan; Singapore; Malaysia; Brazil; Mexico |
Key companies profiled | Accenture; Infosys Limited; HCL Technologies Limited; Wipro Limited; Capgemini; CBRE Group, Inc; NCR Corporation; TTEC Holdings, Inc.; Sodexo; Amdocs |
Customization scope | Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends from 2016 to 2027 in each of the sub-segments. For the purpose of this study, Grand View Research has segmented the global business process outsourcing market report based on service, end-use, and region:
Service Outlook (Revenue, USD Billion, 2016 – 2027)
Finance & Accounting
Human Resources
Knowledge Process Outsourcing
Procurement & Supply Chain
Customer Services
Others
End-use Outlook (Revenue, USD Billion, 2016 – 2027)
Banking, Financial Services, and Insurance (BFSI)
Healthcare
Manufacturing
IT & Telecommunication
Retail
Others
Regional Outlook (Revenue, USD Billion, 2016 – 2027)
North America
U.S.
Canada
Europe
U.K.
Germany
France
Asia Pacific
China
India
Japan
Singapore
Malaysia
Latin America
Brazil
Mexico
Middle East & Africa
Title: Exploring Current Trends in the BPO, KPO, and BPM Industry
Introduction:
The business landscape is constantly evolving, and the BPO (Business Process Outsourcing), KPO (Knowledge Process Outsourcing), and BPM (Business Process Management) industry is no exception. In this blog, we will delve into the latest trends shaping this industry, highlighting how organizations are leveraging these trends to optimize their operations, enhance efficiency, and drive business growth.
Automation and Intelligent Process Automation (IPA):
Automation has been a game-changer in the BPO, KPO, and BPM industry, enabling organizations to streamline their processes, reduce costs, and improve productivity. However, the current trend is a shift towards Intelligent Process Automation (IPA), which combines robotic process automation (RPA) with artificial intelligence (AI) capabilities. IPA allows for more complex tasks to be automated, including decision-making processes, data analysis, and cognitive tasks. This trend is transforming the industry by enhancing accuracy, speed, and scalability while reducing errors and manual intervention.
Focus on Customer Experience:
Customer experience has become a critical differentiator for businesses across industries, and the BPO, KPO, and BPM sector is no different. Organizations are increasingly focusing on delivering exceptional customer experiences by integrating customer-centric practices into their operations. This involves investing in technologies like customer analytics, sentiment analysis, and AI-powered chatbots to understand customer preferences, personalize interactions, and provide seamless support across multiple channels. By prioritizing customer experience, organizations can build strong customer relationships, improve satisfaction levels, and drive loyalty.
Data Analytics and Insights:
With the abundance of data available, organizations are recognizing the value of harnessing this data to gain actionable insights. The BPO, KPO, and BPM industry are leveraging data analytics tools and techniques to extract meaningful information from vast datasets. By analyzing this data, organizations can make data-driven decisions, identify trends, optimize processes, and uncover new business opportunities. Additionally, the integration of advanced analytics, such as predictive and prescriptive analytics, is helping organizations anticipate customer needs, optimize resource allocation, and enhance overall operational efficiency.
Security and Data Privacy:
As the BPO, KPO, and BPM industry deal with sensitive data, security and data privacy have become paramount concerns. Organizations are proactively adopting robust security measures to protect confidential information and comply with data privacy regulations, such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act). This includes implementing encryption technologies, data access controls, and conducting regular security audits. Furthermore, there is an increased focus on training employees on data privacy best practices and ensuring a culture of data security within organizations.
Expansion of KPO Services:
Knowledge Process Outsourcing (KPO) is gaining prominence as organizations look to leverage specialized knowledge and expertise. KPO services, which involve outsourcing high-value and knowledge-intensive processes like research and analytics, are witnessing significant growth. Organizations are partnering with KPO service providers to access domain-specific knowledge, market insights, and advanced research capabilities. This trend is particularly evident in industries such as healthcare, finance, legal, and technology, where deep subject matter expertise is essential for making informed decisions and driving innovation.
Adoption of Cloud Computing:
Cloud computing has revolutionized the way organizations manage their IT infrastructure and software applications. In the BPO, KPO, and BPM industry, cloud-based solutions are becoming increasingly popular due to their scalability, flexibility, and cost-effectiveness. Cloud platforms enable easy collaboration, secure data storage, and remote access to applications and systems. By adopting cloud computing, organizations can optimize their operations, enhance agility, and scale their business without significant upfront investments in hardware and infrastructure.
7.Rise of Robotic Process Automation (RPA):
Robotic Process Automation (RPA) is witnessing widespread adoption in the BPO, KPO, and BPM industry. RPA involves the use of software robots or bots to automate repetitive and rule-based tasks, freeing up human resources to focus on higher-value activities. RPA not only improves operational efficiency and accuracy but also reduces costs and turnaround times. Organizations are leveraging RPA to automate tasks like data entry, invoice processing, and report generation, resulting in significant time and cost savings.
Focus on Sustainability and Corporate Social Responsibility:
The BPO, KPO, and BPM industry are recognizing the importance of sustainable practices and corporate social responsibility. Organizations are implementing environmentally friendly initiatives like paperless operations, energy-efficient infrastructure, and waste reduction programs. Additionally, there is a growing emphasis on social responsibility, including diversity and inclusion initiatives, ethical sourcing, and community engagement. By incorporating sustainable and socially responsible practices, organizations in this industry can attract socially conscious clients, enhance their brand reputation, and contribute positively to society.
Conclusion:
The BPO, KPO, and BPM industry are experiencing significant transformations driven by technological advancements, changing customer expectations, and evolving market dynamics. Automation, customer experience, data analytics, security, and the expansion of KPO services are just a few of the notable trends shaping this industry. By staying abreast of these trends and embracing innovation, organizations in this sector can gain a competitive edge, deliver value-added services, and drive business success in today’s dynamic business environment.