Business Process Outsourcing Market - Forecast 2021 - 2026
Overview
The business process outsourcing market size is set to grow at a CAGR of 7.5% during the forecast period 2020-2025 and projected to reach $338.1 billion by 2025. Business process outsourcing (BPO) comprises of contracting third-party vendors/service providers to handle multifarious business-related operations and responsibilities. The increase in the adoption of BPO by businesses across varied industry verticals, as these solutions provide a significant number of opportunities for both cost reduction and business growth as well. Moreover, the BPO services to organize the time and resources effectively which improve the core business and office operations, thus, the businesses are preferring this ease option. Hence, these factors are contributing to the expansion of the global business process outsourcing market size.
Report Coverage
The “Business Process Outsourcing Market Report – Forecast (2020-2025)”, by IndustryARC, covers an in-depth analysis of the following segments of the business process outsourcing Industry.
Key Takeaways
·Europe held a larger share in the business process outsourcing market owing to the increasing demand for the increasing requirement for cloud technology and knowledge process outsourcing.
·The growing acceptance of business outsourcing by a large number of companies, as this partnership provides a long-term cost-effective solution is likely to aid in the market growth of the BPO.
·The rise in the dependency of startups on BPO to complete recruitment and trading and gain talent at lower costs. Therefore, the mutual dependency of the BPOs and startups resulted in augmenting the revenue of the global BPO market.
Services- Segment Analysis
Presently, the customer service held the largest share in the business process outsourcing market size in 2018. The growing need for both offline and online technical support due to the increasing number of establishments of service centers has been driving the growth of the customer services in the BPO market. However, the finance and accounting service is projected to grow at the highest CAGR during the forecast period in comparison with human resources, procurement, and supply chain, knowledge process outsourcing, and customer services. This is because of the increment in the number of banking facilities coupled with the strict regulatory necessities in the banking sector, which are boosting the need for outsourcing services, globally.
End-Use - Segment Analysis
Currently, the BFSI segment occupied a larger share in the global business process outsourcing market size, as of 2018. Whereas, the IT and telecommunications sector is anticipated to grow at a highest CAGR during 2020-2025. This is mainly owing to the progression in the industrialization along with the growth of IT companies, worldwide. In addition to this, the government support by offering a notable part of the global economy to the banking and healthcare sectors to lift up their investments in technology. For instance, the National Association of Software and Services Companies (NASSCOM), a trade association for the IT industry in India, stated that the IT-BPO industry was valued at $118.0 billion as of 2018.
Geography - Segment Analysis
Europe's business process outsourcing market share dominated the global business process outsourcing market, accounts for more than 29%, followed by North America and APAC. It is majorly due to the flexibility and customization of service offerings to fulfill the rise in need for cloud computing technology by every individual. Furthermore, the increasing adoption of outsourcing in this region is burgeoning the Europe business process outsourcing market revenue.
Drivers – Business Process Outsourcing Industry Outlook
· The emergence of new technologies is attributing the growth of the business process outsourcing market
Developing technologies including cloud computing, software, social media, and automation are being used by BPOs, which are helpful in decreasing the costs and accelerating the growth. The growing customer base is also witnessing the increment in the number of businesses awareness regarding the benefits of outsourcing. Additionally, even startups are showcasing their interest in outsourcing one of their support business and encouraging the partnering with other firms. The economically viable solutions offered by the BPO are highlighting the adaption of the latest technologies to meet evolving market conditions and sustain in the competitive environment. This has resulted in the widening of services as well as customer base.
· The Competitive Advantages of BPO are gaining traction of the companies, thereby fueling the growth of the business process outsourcing market
The cost efficiency, higher flexibility, better quality and performance, increased diversity of skills and more global presence are the most important benefits offered by the BPO. Through this, the outsourced service providers are engaged in accomplishing their business processes at lower costs. On the other hand, the BPO declines the office space requirement and saves real estate costs. Outsourcing noncritical functions allow organizations to use their internal resources for core competencies and essential business functions. The quality of work completed by external service providers such as web developers or content marketers will be specialized and thus better. They will also be more productive.
Challenges – Business Process Outsourcing Industry
· Automation prevalence is hindering the growth of the business process outsourcing market
The possible data breaches, quality control & communication issues, impact of unstable governments, snowballing expenses, a lack of strategic alignment, overdependence on service providers are some of the hampering factors associated with the BPO industry. In the BPO sector, automation has been elevating as a major threat to low skilled jobs. As the major outsourcing companies are planning their major investments into robotic automation in the near future.
Market Landscape
Agreements, product launches, and R&D activities are key strategies adopted by players in the business process outsourcing market. In 2018, the market of the business process outsourcing has been consolidated by the top ten players accounting for more than 53% of the share. Infosys BPM Limited, Hcl Technology Limited, Cbre Group, Inc., NCR Corporation, Wipro Limited, Capgemini SE, Ttec Holdings, Inc., Sodexo, Accenture PLC, and Amdocs are the business process outsourcing top 10 companies.
