Global Business Process Outsourcing Market - 2021-2028

Global Business Process Outsourcing Market - 2021-2028

Market Overview

The business process outsourcing (BPO) market was sized around US$ XX million in 2020 and is estimated to reach US$ XX million by 2028, growing at a CAGR of XX % during the forecast period (2021-2028).

BPO (business process outsourcing) is a business technique in which a company hires an outside service provider to complete a critical business task required for its operations but lacks the importance of holding a core value in its market position. Though BPO was a practice initiated by the manufacturing industry, where third-party vendors were hired to improve efficiency, other industries later adopted it.

Most BPOs handle two different areas of work, namely, back-office functions and front-office functions. While the back-office functions mostly handle internal business functions such as human resources, payment processing, among others, front office functions mostly include marketing, sales and even customer services.

Market Dynamics

Enhanced work performances and financial benefits offered by business process outsourcing drive the business prospects of the global business process outsourcing (BPO) market.

Enhanced Work Performance and Financial Output

Business outsourcing involves a third party to which an organization's work is subcontracted so that the outsourcing company could focus on its core business, thus enhancing its performance. Since the third-party company to which the work is outsourced specializes in a single bracket of work, it could process the work at hand with enhanced efficacy, accuracy and speed. Business process outsourcing enables core companies to deploy more resources to various operations, providing an improved market advantage.

In addition to amplified work performance, business process outsourcing also supplements financial benefits to the core company that outsources its work. The enhanced financial gains could be witnessed particularly as two outcomes, firstly through tax returns and savings. The second outcome involves the financial gain attributed to the company due to the reduced labor cost and similar expenses that are spared when work is outsourced. As per Deloitte, 70% of the market leaders agree to the fact that they assign business process outsourcing for the benefits of cost-saving. Therefore, it could be conclusively assumed that the enhanced work performance and financial output is one of the major drivers of the global business process outsourcing (BPO) market.

Security Risks and Data Leaks

Since sensitive data of various nature needs to be shared by the client company to the outsourced company in the event of business process outsourcing, a potential security threat exists for instances where such secured data could be misused, stolen and even traded. Since most business process outsourcing firms do comparatively small-scale background checks and screening compared to highly secured global firms, the chances for bad actors and potential threats to enter the picture are high.

Additionally, security, particularly cyberspace security offered by outsourced companies, is less tight in many cases. Therefore, the chances of data and security risks associated with outsourcing could be a potential market restraint that constricts the market growth of the global business process outsourcing (BPO) market.

For instance, in 2016, around 157,000 customer data, including bank details, were stolen from TalkTalk Telecom Group plc, a British broadband, telecom and network company, by three Wipro employees, to whom the back-office operations were outsourced.

COVID-19 Impact Analysis

The impact of the COVID-19 pandemic on the global business process outsourcing (BPO) market was initially disastrous as a reduction in outsourcing was witnessed during the initial phases of the pandemic. As per a survey conducted by Deloitte, in April 2020, it was found that 32% of businesses expressed the opinion that the post-pandemic world would experience an enormous decrease in outsourcing due to financial losses and windfall in market demands.

Nonetheless, the global business process outsourcing (BPO) market is transforming itself to survive the impacts of the COVID-19 pandemic by adopting several futuristic changes such as adoption of work from home culture, real-time remote monitoring, among several others. Advanced digital solutions for actively supporting various processes also help the respective market stay afloat or even progress during the pandemic.

Segment Analysis

Based on type, the global business process outsourcing (BPO) market is broadly segmented into front office and back office

The reduced in-house expenses and availability of specialized talents triggers the market growth of the front office segment

The front office segment of business process outsourcing deals with outsourcing customer-facing services such as tech support and customer service, among others. Since client-facing services are linked to direct client interactions, the quality of such services could determine a company's revenue generation and reputation. Though the in-house workforce could potentially handle the respective tasks, front office outsourcing could radically improve customer satisfaction and better staff operating at a lower price.

Additionally, outsourcing front office positions to an external agency could provide the company access to talents specialized in different fields the company requires at a substantially lower price than in-house hiring. Therefore, the front office segment of the global business process outsourcing (BPO) market is expected to grow significantly over the forecast period.

Geographical Analysis

The presence of tech giants and startups in the North American region boost the global business process outsourcing (BPO) market of the region

North America dominates the business process outsourcing (BPO) market because big tech businesses and startups are primarily responsible for the region’s growth. To deliver complete business process outsourcing services to their clients, companies in the area significantly invest in developing new technologies such as analytics, big data, cloud computing and artificial intelligence (AI).

Furthermore, the Asia-Pacific business process outsourcing (BPO) market exhibits the fastest CAGR growth since nations such as China and India have among the world's fastest-growing economies. Recently, India has surpassed U.S. and the UK as the top destination for business process outsourcing, with most firms in the U.S. and the UK outsourcing IT-related business operations to Indian service providers. The availability of a low-cost labor pool in growing markets such as India, China and the Philippines aided the expansion of the BPO services industry in the Asia-Pacific region.

Competitive Landscape

The business process outsourcing (BPO) market is highly consolidated and competitive with many local and international players and exponential growth in technological advent. Major market players include IBM Corporation, Cognizant, Capgemini, Genpact, ADP, Inc., Wipro Limited, Accenture, Tata Consultancy Services Limited, HCL Technologies Limited, NTT DATA, Inc., WNS (Holdings) Ltd.

The market leaders are adopting numerous new strategies to dominate the market, such as new product launches, acquisitions and collaborations, contributing to the global growth of the business process outsourcing market.

IBM Corporation.

Overview: IBM Corporation is an American conglomerate founded in 1911. The company is headquartered in New York, U.S. and is one of the leading market players in hybrid cloud and artificial intelligence technologies. The company has an annual revenue of US$ 73,620 and employs around 350,000 people in around 170 countries the world over.

Service Portfolio: Business Process Outsourcing (BPO) services for business continuity and resiliency

IBM Corporation offers revolutionary business processes and outsourcing operations utilizing artificial intelligence, cloud technologies, automation, among others. BPO services include procurement and sourcing services, finance transformation services and talent and transformation services.

Key Development: In August 2021, IBM Corporation expanded its presence in India by establishing a cutting-edge software lab in Ahmedabad, Gujarat. The company intends to expand its advanced cloud and artificial intelligence technology and its global presence with this expansion.

Why Purchase the Report?

Visualize the segmentation of the business process outsourcing (BPO ) by type, outsourcing type, deployment mode, ownership, application, end-user

Identify commercial opportunities in the business process outsourcing market by analyzing trends and co-development deals.

Excel data sheet with thousands of data points of business process outsourcing (BPO) market-level 4/5 segmentation.

PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.

Component mapping in excel for the key product of all major market players

The global business process outsourcing (BPO) market report would provide approximately 80 market data tables, 74 figures and 180 pages.

Target Audience

Business process outsourcing (BPO) providers/ Clients

Commercial and Technological Firms

Industry Investors/Investment Bankers

Research Professionals

Emerging Companies

Manufacturers"

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