Business Process Outsourcing Market Size, Share & Trends Analysis Report By Service Type (Customer Services, Finance & Accounting), By End-use (IT & Telecommunication, BFSI), By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global business process outsourcing market size was valued at USD 232.32 billion in 2020 and is expected to register a compound annual growth rate (CAGR) of 8.5% from 2021 to 2028. The market is expected to benefit from the increasing focus of organizations on improving business agility, to survive the constantly changing business dynamics, and ways of improving efficiency while decreasing operating costs and emphasizing core competencies. Moreover, organizations are increasingly focusing on reducing the cost of conducting business for accessing global resources to meet the growing industry demands. As a result, several organizations across the globe are leveraging the benefits of business process outsourcing (BPO) services and are focusing on core competencies, thereby generating avenues for market growth.

The versatility of BPO services is strengthening market growth as several end-use industries, including banking, financial services, healthcare, and manufacturing, employ these services in some capacity. Benefits, such as reduced operational costs and improved efficiency of support functions like customer services, are encouraging the adoption of business process outsourcing services. While offering enhanced inter-connectivity to businesses, BPO services also deliver reliable, relevant, and round-the-clock support to essential business processes. The shift of focus from monopolistic business strategies to a shared workload business culture is driving the demand for business process outsourcing for continued success and improved results.

Technological advancements across areas, such as robotic process automation, AI, machine learning, social media browsing, and big data analytics, bode well with the market's future growth prospects. Increased preference for cloud technology, AI, and other automation techniques helps drive the market. Moreover, factors, such as the increasing adoption of SaaS-based solutions, coupled with enhancements in cloud-based infrastructure, and the rapid adoption of process automation in business functions are also contributing to market growth. Furthermore, the rising adoption of Business Process as a Service (BPaaS) for streamlining multiple workflows by scheduling them in an automated manner is expected to drive market growth over the forecast period.

Business process outsourcing service providers leverage the benefits of cloud computing to reduce the time required for processing data-intensive business processes. Cloud computing in BPO results in enhanced data processing workflow at a reduced turnaround time. In addition, owing to the pervasive nature of the internet and continued improvement in network infrastructure globally, has paved the way for hosting applications on the cloud instead of complex infrastructure that is prone to downtime. Moreover, several players in the market are engaged in integrating cloud computing in service portfolio to enhance the outsourcing process.

The increasing number of government initiatives implemented to promote the adoption of cloud technology is also expected to work well for the market. Growing investments by governments across the globe in areas pertaining to cloud computing are expected to boost the overall market growth, thereby increasing the demand for BPO solutions.

Business process outsourcing involves outsourcing various non-core back-office and front-office functions, including IT services, call center operations, financial services, and recruitment services, among others, to a third party. Outsourcing these functions allows companies to reduce their operational expenses and focus on their core competencies. The rising demand to reduce operational expenditures of non-core activities and increase focus on core competencies across several end-use verticals is expected to boost the demand for such services.

Service Type Insights

The customer services segment dominated the market in 2020 with a revenue share exceeding 31%. The segment is expected to retain its dominance registering the fastest CAGR over the forecast period. The high share of the customer services segment is attributed to the increasing number of service centers across the globe that need both online as well as offline technical support. Customer service-based BPO companies are specialized in handling customer requirements and queries that are generated through emails, phone calls, chats, social media platforms, and other channels.

The human resource services segment is expected to register a steady CAGR during the forecast period. The growing need for resources across different sub-segments including recruitment & relocation, payment processing, administration, etc. is expected to work well for the segment growth. The finance and accounting segment is expected to witness significant growth over the forecast period as well. This is mainly ascribed to the strong presence of banking facilities and stringent regulatory requirements in the banking sector.        

End-use Insights

The IT & telecommunication segment dominated the market in 2020 with a revenue share exceeding 34%. The segment is expected to register a significant CAGR during the forecast period. The segment growth is attributed to a rise in number of IT companies and rapid industrialization worldwide. Telecom companies across the globe are outsourcing several telecommunications processes to reduce their overall capital expenditure. Telecom companies outsource business functions, ranging from call center outsourcing to billing operations to finance and accounting. Apart from helping reduce their capital expenses, outsourcing allows telecom companies to create a flexible strategy of acquiring and retaining more customers, optimizing current investments, accessing specialized resources, and managing cost pressures.

The BFSI segment is anticipated to witness the fastest growth rate over the forecast period. Financial establishments have long used BPO as a reliable tool for improving the cost efficiency of their operations, the quality of their services, and the flexibility of business processes. Several entities of the BFSI industry, including investment & asset management, are opting for specific outsourcing processes and are incorporating them as a part of their business models. This trend is expected to work well for the segment growth over the forecast period.    

Regional Insights

In 2020, North America emerged as the dominant regional market and accounted for a revenue share of over 36%. The growth was attributed to the increasing adoption of cloud enablement and digital services that require frequent assistance and maintenance for business operations. North America will retain the leading position throughout the forecast years due to rising demand for BPO services on account of the presence of tech giants and legislative & regulatory pressures in the region. Customization of service offerings to better meet individual needs, coupled with the increasing demand for cloud computing, is further expected to support regional growth.

The Asia Pacific regional market is expected to witness the highest CAGR from 2021 to 2028. Increasing demand for talented professionals, reduced labor costs, and significant digital investments by leading vendors, such as HCL Technologies Ltd., Infosys Ltd., Accenture, and Wipro, are driving the regional market growth. Moreover, significant investments in infrastructure development by government bodies are expected to help enhance the existing BPO ecosystems in the region over the forecast period.

Key Companies & Market Share Insights

The global market features a fragmented landscape and is characterized by extreme competition among the market players. The players are concentrating on strengthening their hold on the market by implementing strategies, such as mergers & acquisitions, partnerships, and geographical expansion. These strategies help companies expand their business geographically and further enhance their service offerings across the national and international markets. For instance, in December 2020, Accenture partnered with Inversis to develop outsourcing solutions for financial institutions across Europe. The partnership further allows the former to modernize the latter’s existing technology platform. Some of the major players operating in the global business process outsourcing (BPO) market are:

• Accenture

• Amdocs

• Infosys Limited (Infosys BPM)

• HCL Technologies Limited

• CBRE Group, Inc.

• NCR Corporation

• Wipro Limited

• Capgemini

• TTEC Holdings, Inc.

• Sodexo   

Business Process Outsourcing Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2028. For the purpose of this study, Grand View Research has segmented the global business process outsourcing market report based on service type, end-use, and region:

• Service Type Outlook (Revenue, USD Billion, 2017 - 2028)

  • Finance & Accounting

  • Human Resource

  • KPO

  • Procurement & Supply Chain

  • Customer Services

  • Others

• End-use Outlook (Revenue, USD Billion, 2017 - 2028)

  • BFSI

  • Healthcare

  • Manufacturing

  • IT & Telecommunication

  • Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

    • Malaysia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa