Business Process Outsourcing (BPO) Market Analysis Report By Service (Customer Services, Finance & Accounting, Human Resources), By Region, By End Use, And Segment Forecasts, 2018 - 2025

Industry Insights

The global business process outsourcing (BPO) market size was valued at USD 195.2 billion in 2017 and is expected to exhibit a CAGR of 7.4%. Players in the market are engaged in providing reliable and cost-effective services across various sectors such as BFSI, manufacturing, retail, IT and telecommunications, and healthcare. Companies operating in these industries prefer to incorporate business process outsourcing as part of their business strategy, in order to allow them to focus on their core competencies and ultimately increase their profitability.

Business activities of any organization are classified into critical, core, and non-core activities. Core activities are a company’s primary competencies that give it a strategic advantage, while critical operations require a specialized skill-set. Non-core activities are supporting operations that largely involve relationship management between consumers and products. Classifying these activities is vital in order to allocate resources appropriately to ensure timely delivery services. Nowadays, companies have begun placing greater emphasis on core activities with a view to maintain their market presence and expand their customer base. This has resulted in higher outsourcing of non-core activities.

Companies engaging in business process outsourcing can choose to outsource specific services or business functions based on individual requirements. These include payroll, IT, logistics, and legal services. Reduction in labor costs as well as reducing and/or eliminating overheads arising from human resource and equipment are some of the potential benefits of outsourcing.

Services such as training and recruitment require additional effort and time. Owing to this, some companies prefer to outsource human resources services. For instance, Accenture is one of the pioneers in offering human resources and finance and accounting services. The company’s HR services include workforce performance, recruitment, payroll, benefits and compensation, and several learning and employee services. The company caters to clients such as Microsoft, General Motors, IBM, and Goodyear.

Services Insights

The services segment has been segmented into finance and accounting, human resources, knowledge process outsourcing, procurement and supply chain, customer services, and others. The others segment includes legal and tax, logistics, and training. The customer services segment held the largest share of more than 30.0% in 2017 and is predicted to register the highest growth rate over the forecast period. Growing establishment of service centers that require online and offline technical support has been fueling this segment.

The finance and accounting segment is expected to grow at a significant rate over the forecast period. This can be attributed to increasing presence of banking facilities and stringent regulatory requirements in the banking sector, which has resulted in need for outsourcing services.

End-use Insights

The BPO market offers services across various end-use industries such as BFSI, healthcare, manufacturing, IT and telecommunications, retail, and others. The others segment includes travel and transportation, government, education, construction, and utilities. The BFSI segment secured a market share of just under 30.0% in the global market in 2017 and is anticipated to grow at the highest rate from 2018 to 2025.

The IT and telecommunications sector is expected to register the second highest CAGR of over 7.0% owing to the growth of IT companies and rapid industrialization across the globe. Additionally, support from governments to improve the global economy by encouraging other sectors such as banking and healthcare to boost their investments in technology is expected to fuel the market. For instance, according to 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 USD 12.0 billion in 2014 and is expected to reach USD 118.0 billion by the end of 2018.

Regional Insights

The Europe business process outsourcing market accounted for more than 25.0% of the global revenue in 2017. Growth in the regional market is accredited to flexibility and customization of service offerings in order to better meet individual needs, coupled with rising demand for cloud computing technology.

The Latin America BPO market is projected to exhibit a CAGR exceeding 5.0% over the forecast period. This growth is ascribable to rapid expansion of the manufacturing and consumer packaged goods (CPG) industries in this region. Additionally, increasing support from the government toward promotion of English language learning programs in order to gain attraction from global service providers is anticipated to propel market growth.

Business Process Outsourcing Market Share Insights

Competition in the market results from presence of major global players such as Accenture, Infosys Limited, HCL, Wipro, Capgemini, and Amdocs. A diverse range of services allows companies to gain a competitive edge in the market. Capgemini, one of the pioneers in the BPO industry, is engaged in offering multiple services such as financial services, supply chain and procurement, and business analytics.

Companies are focusing on setting up new BPO centers across the globe to expand their market presence and augment their existing customer base. For instance, in September 2017, Infosys Limited announced the establishment of a new service center in the Netherlands. This office will be engaged in providing finance and accounting and other end-to-end outsourcing services.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of latest industry trends from 2014 to 2025 in each of the sub-segments. For the purpose of this study, Grand View Research has segmented the global business process outsourcing market report based on service, end use, and region:

• Service Outlook (Revenue, USD Billion, 2014 - 2025)

  • Finance & Accounting

  • Human Resources

  • Knowledge Process Outsourcing

  • Procurement Outsourcing & Supply Chain

  • Customer Services

  • Others

• End-use Outlook (Revenue, USD Billion, 2014 - 2025)

  • Banking, Financial Services, and Insurance (BFSI)

  • Healthcare

  • Manufacturing

  • IT & Telecommunication

  • Retail

  • Others

• Regional Outlook (Revenue, USD Billion, 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • Singapore

    • Malaysia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa