BPO Industry Analysis

The Business Processing Outsourcing Market is expected to register a CAGR of 8.5% during the forecast period.

Business process outsourcing has become incredibly popular with companies ranging from Fortune 500s to startups over the last two decades. Businesses in every industry can now outsource non-core processes while applying more resources to core business functions. The BPO industry is a subset of outsourcing that involves contracting third-party service providers for various business-related operations and responsibilities. While manufacturers initially used BPO, pretty much every industry you can think of around the world now uses it as part of their business models. Businesses across all industries have adopted BPO because business process outsourcing solutions provide an array of opportunities for cost reduction and business growth.  Services within the BPO Industry (including payroll, accounting, and data analytics outsourcing) make it easier for businesses to dedicate their time and resources to core business and office operations. The BPO sector also enables businesses to react faster to changing market dynamics by adapting their processes as the market changes. 

Global business process outsourcing companies are increasingly benefiting from the growing complexities in supply chains, which create a trend wherein organizations are looking to third-party firms for outsourcing their operations. Automation will continue to be a significant threat to low skilled jobs in the BPO sector. Many of the major business process outsourcing companies intend to make major investments into robotic automation in the coming years. APAC continues to be a vibrant market for the business process outsourcing (BPO) space. The BPO Industry is primarily driven by the increasing number of global companies expanding their base in the region and partnering with agile business partners to provide them with the required services. 

The North American business process outsourcing market accounted for a significant portion of the global market. Regional BPO industry growth is accredited to flexibility and customization of service offerings in order to better meet individual needs, coupled with an increasing demand for cloud computing technology. However, some of the Asian countries like India and the Philippines have shown strong growth in recent years. 

Growing competitiveness from new outsourcing destinations, coupled with the pressure on businesses to run cost-efficiently, will drive accelerated growth in the Business Process Outsourcing industry. Automation will continue to be a significant threat to low-skilled jobs in the BPO sector. Many major outsourcing companies intend to make major investments in robotic automation in the coming years. The advantages of BPO include cost-efficiency, higher flexibility, better quality and performance, competitive advantage, etc. Outsourced service providers can complete business processes at lower costs because of economies of scale, specialized processes, low-cost countries, etc. Outsourcing non-critical functions allows organizations to use their internal resources for core competencies and essential business functions. The BPO sector also enables businesses to react faster to changing market dynamics by adapting their processes as the market changes. 

‍

BPO Industry Trends

The America have the largest Business Process Outsourcing Market

The Americas have the largest Business Process Outsourcing Market. North America alone had the largest BPO market than Europe, Middle East, and Africa. New technologies that have been developed over the past few years, including robotic process automation (RPA), have begun to impact the BPO industry. Robotic Process Automation (RPA), a significant development in BPO industry trends, uses bots and artificial intelligence on a user interface to complete work faster, at a cheaper rate. RPA, with its cost savings, speed, and efficiency benefits, is slowly making its way into all industries and all types of business processes. While it is an uphill task for many BPO service providers, the top Business Process Outsourcing Companies are already working to make robotic process automation part of their standard client services portfolio. 

Before 2000, the customer service industry was entirely dependent on websites and interactive voice response (IVR) for transferring a call to the correct representative. Now, around 79% of the US population has at least one social media account, leading to a notable shift in consumer behavior. Instead of call center software programs, companies now want to invest in real-time customer engagement that allows them to gain first-hand product insights and turn issues into new products or solutions toaddress future problems through social media. 

Currently, the BPO industry’s overview clearly shows increased optimism about market growth and reduced regulations. Businesses are also encouraged by the benefits gained through innovative technologies, such as cloud computing and process automation. Global outsourcing service providers are expected to use new technological innovations to effectively address market challenges, enhance products and services, and manage talent shortages while helping keep operating costs low. 

‍

The Use of the  Cloud Computing in BPO industry is on rise.

According to the Business Process Outsourcing industry sources, consumer demands for multi-channel communications have exploded over the past five years. For BPO service providers, this change in customer management is a huge opportunity in the BPO Market. Over the last few years, BPOs have been investing in the tools and capabilities to offer a wide range of social media management services. These service offerings range from social media monitoring to business intelligence and actioning customer response. Many BPO service providers are also investing in dedicated social media service teams. Working in tandem, social media teams and customer representatives can deal with customer grievances much faster, leading to higher customer satisfaction and better customer experience. 

Small and medium businesses (SMBs) have a limited budget, which can’t grant state-of-the-art office space and infrastructure. More and more SMBs are adopting virtual storage and systems to counter a lack of data centers, hardware and software, and the personnel required to implement new technology. The benefits of cloud computing include improved business collaboration due to a standardized system between the Business Process Outsourcing Companies and the client, and higher data security due to impenetrable cloud systems. The adoption of cloud services and investments by top Business Process Outsourcing Companies in this technology will continue further as cloud computing becomes more mainstream, mature, and cost-effective. 

‍

Business Process Outsourcing Industry Overview

The report covers major international vendors operating in the global business process outsourcing market. In terms of market share, a few of the major Business Process Outsourcing Companies currently dominate the market. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and tapping into new markets. Despite the advent of these relatively small Business Process Outsourcing Companies in the market, the BPO market is still consolidated with top 10 vendors, accounting for over 55% of the market.

‍

Business Process Outsourcing Market News

  • In June 2021, IBM announced IBM z/OS V2.5  the next-generation operating system (OS) for IBM Z designed to accelerate client adoption of hybrid cloud and  Artificial Intelligence and drive application modernization projects.
  • In July 2021, Wipro Limited launched FieldX, a cloud-based end-to-end digital service lifecycle automation solution built on ServiceNow's Now Platform®. Using FieldX, manufacturing organizations can enhance and scale-up their after-sales customer service operations while reducing costs.