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The business process outsourcing market size is projected to increase by USD 84.4 billion with a grow at a CAGR of 6.78% between between 2024 and 2028. The market report also offers information on several market vendors, including Accenture Plc, Automatic Data Processing Inc., Capgemini SE, Infosys Ltd., International Business Machines Corp., NEC Corp., NTT DATA Corp., Tata Consultancy Services Ltd., Wipro Ltd., and ZTE Corp. among others. A primary driver behind the expansion of the market is the emphasis on lowering operational expenditures. Operational costs encompass expenses associated with producing goods and services, as well as ongoing maintenance and administrative tasks. BPO plays a crucial role in reducing these costs and boosting operational effectiveness. It entails obtaining assistance for various business processes like procurement, logistics, and customer support. Consequently, businesses are increasingly turning to outsourcing to streamline operations and enhance their core activities. BPO services are sought after by organizations aiming to grow their market presence, broaden their clientele, and enhance customer relations.
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Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Accenture Plc - It offers intelligent finance operations, marketing solutions, and other services. The services are availed by SynOps. It helps create a data-driven operating model that connects intelligent technologies, talent, and data and analytics to provide real-time, actionable insights.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Based on end-user, the market is segmented into IT and telecommunication, BFSI, retail, healthcare, and others. The market share growth by the IT and telecommunication segment will be significant during the forecast period. This segment has captured most of the market share of the global BPO market. The growth of this segment can be attributed to technological advances, fast growth in data traffic, and growing demand for digital content and communication by consumers.
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The IT and Telecommunication segment was valued at USD 81.60 billion and this segment continues to expand exponentially during the forecast period due to the advent of the 5G spectrum. Several telecom organizations focus on developing and launching 5G-related products and services. Telecom and IT organizations outsource their customer relationship management functions to service providers to focus on their key offerings. Running business processes requires high investments in setting up and maintaining infrastructure. Organizations in the IT and telecom sector are constantly outsourcing their customer query management and other operations to service providers to reduce turnaround times and enhance customer services. Therefore, this segment is expected to register growth because of the increasing demand for outsourcing customer support services. Technologies such as RPA, ML, and AI are automating processes to achieve operational excellence, which will fuel the demand for BPO during the forecast period.
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APAC is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio's analysts have provided an extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. North America has always been a lucrative market, especially in the IT sector, as North America is an early adopter of advanced technologies. The strong presence and penetration of top companies fuel the market growth in North America. Thus, it is beneficial to outsource operations to countries with lower income taxes. The BPO market in the region is expected to grow at a moderate growth rate during the forecast period as the market is mature compared with other regional markets. BPOs in the region are offshoring their services to low-wage countries such as India and the Philippines. Another reason for the growth of the market in the region is a rise in the adoption of advanced technologies such as cloud computing solutions, social media, AI, and RPA.
The market encompasses various sectors such as healthcare, BFSI (Banking, Financial Services, and Insurance), IT & telecommunications, and more. With the rise of cloud computing and Artificial Intelligence (AI), companies are increasingly outsourcing tasks related to security, intellectual property rights, Know Your Customer (KYC), and Anti-Money Laundering (AML) compliance. The BPO sector serves as a crucial support for the IT and telecommunication industry, providing services like human resource and recruitment outsourcing, data warehousing, and analytics solutions. Enterprises, especially small- and medium-sized ones, benefit from BPOs for their virtual storage, hardware, and data center needs. BPOs also play a significant role in various verticals including retail & consumer goods, transportation & logistics, and energy & power, leveraging AI technologies for improved operations and power transmission.
Moreover, the market continues to evolve with a focus on external service, flexibility, and reduced costs. Companies are leveraging BPO for enhanced service delivery, agility, and optimizing operating costs. Technical improvements such as the adoption of IoT enhance efficiency across sectors like healthcare and IT, driving technological advancements. Outsourcing types like offshore, nearshore, and onshore cater to diverse needs, bolstering business process efficiency. Cloud computing and AI technologies play pivotal roles in achieving competitive advantage and operational excellence. Investments in power transmission further support the BPO sector's growth, fostering awareness and aligning with core competencies to meet global demands for business process outsourcing solutions. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The focus on reducing operational costs is notably driving market growth. Operational costs encompass expenses related to regular manufacturing, maintenance, and administrative activities. They help reduce operational costs and enhance business efficiency by providing services for various business processes such as procurement, logistics, and customer care. This can be particularly beneficial for industries like IT & telecommunications, retail & consumer goods, transportation & logistics, and energy & power, where efficient business processes are crucial for success. Additionally, the adoption of technologies like cloud computing and artificial intelligence (AI) further enhances the effectiveness of BPO services in these sectors. As a result, many organizations are outsourcing their operations to focus on enhancing their core businesses.
Moreover, outsourcing business processes helps organizations increase their market share, expand their customer base, and enhance customer relationships. Setting up an in-house business process team can incur additional costs of 50%-70% for managing extra workforce, office space, infrastructure, and training. This can be a significant burden for small- and medium-sized enterprises (SMEs), which may not have the resources to support such expansion. Utilizing virtual storage and efficient systems and hardware can help mitigate some of these costs, but outsourcing business processes through BPO remains a cost-effective alternative for many organizations. In contrast, BPO services can lead to significant cost savings of between 30%-50% on operating costs. Consequently, outsourcing business processes can save companies a considerable amount of money and time. companies are leveraging various technologies to further reduce operational costs, which is expected to positively impact the global BPO market in the market growth analysis period.
The increasing number of start-ups partnering with BPOs and increased transparency is a major trend in the market. The number of start-ups has been increasing. Start-ups are under a lot of pressure to compete with their contemporaries. These start-ups have small budgets and look for cost-effective labor. Therefore, they depend on BPOs to provide talent at low costs and complete business processes such as trading, finance, accounting, and recruitment. Emerging technologies such as cloud computing, AI, RPA, and social media services generally enhance the overall customer service experience, accelerate productivity, and maximize revenues.
Moreover, the increased focus on the business process of start-ups has resulted in better services and more profitable results, which may propel the growth of the market in focus during the forecast period. Moreover, start-ups have compelled the BPO industry to exhibit transparency in contracts, pricing, and policies. The involvement of governments has been a catalyst in increasing the demand for transparency. With government involvement and enhanced services, transparency will lead to better partnerships between clients and suppliers, resulting in better investment options and business innovation, further projected to drive the growth of the market during the forecast period.
The language barrier and goodwill risks are major challenges impeding the market growth. Language barriers are a major challenge for the market. Service providers are located in different regions and may lack the cultural knowledge, fluency, and communication skills necessary to provide excellent support to customers. Language barriers hamper the implementation of new processes throughout an enterprise. For instance, the marketing team decides to access software from the cloud so that any member of the team can access the information anywhere in the world. However, if the instructions are displayed only in English, non-native English speakers will find it difficult to use the new system, which will slow down their output.
However, the language barriers intensify the existing challenges in business operations, for instance, small problems such as what subjects to use on internal emails, when database information should be updated, and how to discuss presentations, hence leading to operational issues if the affected team members do not understand the suitable procedures owing to varying languages. Such gaps in communicating business needs and goals will hinder the market in focus during the forecast period.
The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Insurance Business Process Outsourcing (BPO) Market - Insurance Business Process Outsourcing (BPO) Market Analysis North America, Europe, APAC, Middle East and Africa, South America - US, China, India, UK, Germany - Size and Forecast
Healthcare Business Process Outsourcing (BPO) Market - Healthcare Business Process Outsourcing (BPO) Market Analysis North America, APAC, Europe, Middle East and Africa, South America - US, Canada, UK, China, Germany - Size and Forecast
IT Business Process Outsourcing (BPO) Market - IT Business Process Outsourcing (BPO) Market by Type and Geography - Forecast and Analysis
The market is thriving due to the increasing demand for specialized services in the IT and telecommunication sector. Companies are leveraging BPOs for various functions such as data centers, mobility, and robotic process automation (RPA) to improve efficiency and reduce costs. BPOs also play a crucial role in providing IT support, software development, and implementing Business Continuity Plans (BCP). Additionally, services like finance and accounting outsourcing, marketing & sales outsourcing, and customer support outsourcing are gaining popularity. With the rise of the Internet of Things (IoT) and the need for data security, BPOs are expected to play an increasingly important role in the market. The business process outsourcing (BPO) industry is adapting to the future with cloud technology and a distributed workforce on a standardized platform. Amid economic changes and restructuring, companies are utilizing BPO for infrastructure equipment management and navigating merger and acquisition activity with scrutiny from regulatory bodies like the California Consumer Protection Act. BPO offers alternatives to inhouse services such as human resource services and voice processing, image editing, and virtual staffing. With diverse outsourcing types like 3D visualization and product engineering, deployment modes include on-premise and cater to varying organization sizes and ownership models—captive or third party. The approach spans best-shore, bundled services, and contract-based outsourcing across sectors like transportation and logistics, travel and hospitality, and energy and utilities with support from Mediterranean Consulting.
In the market, companies are focusing on improving training & development outsourcing to enhance the skills of their employees. This is crucial due to the rapid advancement of technology, which requires a skilled workforce. BPOs are also playing a significant role in telemarketing and social media marketing, helping businesses reach their target audiences effectively. Additionally, BPOs offer Talent and HR Services to manage employee needs. With the growing demand for CRM and ERP systems, BPOs are providing business process services (BPS) and business process as a service (BPaaS). However, the market faces challenges such as maintaining a skilled workforce and managing attrition rates.
Market Scope |
|
Report Coverage |
Details |
Page number |
195 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.78% |
Market growth 2024-2028 |
USD 84.4 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.26 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
APAC at 42% |
Key countries |
US, UK, Germany, China, and India |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Accenture Plc, Alight Solutions LLC, Amdocs Ltd., Anderson Business Solutions Pvt. Ltd., Automatic Data Processing Inc., Capgemini Service SAS, Cognizant Technology Solutions Corp., Concentrix Corp., Deloitte Touche Tohmatsu Ltd., HCL Technologies Ltd., Infosys Ltd., International Business Machines Corp., NEC Corp., NTT DATA Corp., Oracle Corp., Sykes Enterprises Inc., Tata Consultancy Services Ltd., Tech Mahindra Ltd., Wipro Ltd., and WNS Holdings Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Business Segment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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