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, 2022 - 2030

Report Overview

The global business process outsourcing market was valued at USD 245.9 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030. The market is driven by factors such as the increasing focus of organizations on improving efficiency and business agility, decreasing operating costs, and emphasizing core competencies to survive the constantly changing business dynamics.

Moreover, several organizations are increasingly focusing on reducing the cost of conducting business for accessing global resources to meet the growing industry demands. These factors have encouraged the adoption of Business Process Outsourcing (BPO) services across several organizations that focus on technological trends such as AI and cloud computing for driving business efficiency. In 2020, the impact of the COVID-19 pandemic also increased the demand for standardized platform services that enable BPOs to resolve complex business processes, thereby generating avenues for market growth.

BPO refers to the process of outsourcing operations and responsibilities of several business functions to external service providers. BPO services find significant demand owing to their benefits, such as reduced costs, increased flexibility, and enhanced service quality. Moreover, BPO allows organizations to refocus on their core business activities to deliver incremental value to their customers. BPO services witness demand due to their benefits across end use industries, such as IT & telecommunication, BFSI, and healthcare.

The growing popularity of cloud computing in business process outsourcing is one of the prominent factors influencing the growth of BPO services. Cloud computing assists BPO providers in increasing the time to market, improving the quality control process, and reducing costs. Additionally, cloud computing in BPO ensures instant computing support and system access, flexible provisioning, and universal access whenever needed to meet the business purposes. These benefits are anticipated to positively impact the adoption of cloud computing in the business process outsourcing market during the forecast period.

However, issues related to confidentiality and intellectual property rights are anticipated to restrain the growth prospects of the BPO market during the forecast period. The need to reduce operational costs often lands the outsourcer in countries that do not have an established legal framework that is responsible for protecting the outsourcer from breaches of confidentiality and violations of intellectual property rights. As a result, outsourcing companies are often concerned with the way the outsources handle the information shared and are observed to be reluctant, as even a small error can result in a permanent setback for the company’s market position. The increasing number of government initiatives implemented to promote the adoption of cloud technology in the BPO sector is also expected to bode well for market growth.

The rapid increase in COVID-19 cases at the beginning of 2020 resulted in social and economic disruptions and created challenges in outsourcing functions. However, the changes brought to business activities due to these disruptions are expected to provide impetus to the market in the long run. BPO companies have changed their business models by restructuring their Business Continuity Plans (BCP) to a distributed workforce.

Businesses have realized the importance of continuous operations planning and disaster recovery to build a more reliable business model that can survive an unprecedented disruption like the COVID-19 pandemic. For instance, in 2020, the key vendors of the BPO market, including Accenture and Infosys Limited (Infosys BPM), stated that due to the COVID-19 pandemic, more than 80-90% of their employees were working from remote locations. The resultant disruption caused in the workforce management process led to lack of infrastructure equipment and increased data security risks resulting in dipped work efficiency and delays in project completions in the BPO market.

Service Type Insights

The customer services segment dominated the market in 2021, with a revenue share exceeding 30%. The segment is expected to retain its dominance, registering the fastest CAGR during the forecast period. The dominance of the segment can be 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 specialize in handling customer requirements and queries that are generated through emails, phone calls, chats, social media platforms, and other channels. Most of them also provide self-service support, ensuring that customers can find answers to their queries at any time.

The finance and accounting segment is expected to witness significant growth during the forecast period. This can be ascribed to the rising number of banking facilities and stringent regulatory requirements in the banking sector, resulting in the need for outsourcing services that can bring a significant reduction in operating costs. Moreover, the human resource services segment is also anticipated to grow substantially during the forecast period, owing to the rise in need for resources across areas, such as payment processing, recruitment and relocation, administration, and other employee benefits services.

End-Use Insights

The IT & telecommunication segment held the largest revenue share in 2021, accounting for around 34.0% of the overall market. The rise in the number of IT companies and rapid industrialization worldwide are some of the key factors driving the demand for BPO services across IT and telecommunication companies. IT & telecom BPO services cater to the increasing demand for connectivity, address security issues, and innovate new offerings for the latest devices and technology standards. Telecom companies outsource business functions, ranging from call-center outsourcing to billing operations to finance and accounting. Outsourcing allows telecom companies to reduce their capital expenses, create a flexible strategy for acquiring and retaining more customers, access specialized resources, optimize current investments, and manage cost pressures.

The BFSI segment is likely to witness the fastest growth by 2030, attaining a CAGR of over 9.0% during the forecast period. Financial institutions have long considered BPO as an instrument for improving cost efficiency. BFSI companies are opting for outsourcing processes for several domains of the BFSI industry, including asset management and investment management, to improve customer services.

Regional Insights

North America accounted for over 36% revenue share of the market in 2021 and is expected to grow steadily during the forecast period. It is expected that the region will remain dominant due to the rising demand for BPO services from several tech giants. Customization of service offerings to better meet individual needs, coupled with the increasing demand for cloud computing, is further expected to support regional growth. Similarly, the European market is also expected to record healthy growth, driven by the availability of a skilled workforce, coupled with the quality of service and operational efficiency.

The Asia Pacific market is expected to register the highest CAGR from 2022 to 2030 due to the increasing demand for talented professionals, reduced labor costs, and significant digital investments by leading vendors such as HCL Technologies Limited, Infosys Ltd., Accenture, and Wipro. For instance, in December 2020, HCL Technologies Limited entered Vietnam. The business expansion allowed the company to hire highly skilled expertise and offer enhanced IT solutions across the country. Additionally, it also allowed the company to expand its market presence in Asia Pacific.

Key Companies & Market Share Insights

The key market players that dominated the global market in 2021 include Accenture, Amdocs, Infosys Limited, HCL Technologies Limited, CBRE Group Inc., Wipro Limited, and Capgemini. Companies engage in inorganic growth strategies, such as mergers & acquisitions, partnerships, and geographical expansion, to stay afloat in the highly competitive market. In October 2021, Amdocs signed a seven-year partnership with VEON Ltd., a connectivity and internet service provider, to offer innovative digital services to customers of VEON from Uzbekistan and Kazakhstan.

Apart from increasing their size and broadening their reach, companies focus on market trends to develop technologically advanced and differentiated services to gain a competitive edge. The rising flexibility of business process outsourcing services is helping strengthen market growth as many end-use industries, including IT and telecom, healthcare, banking, financial services, insurance, and manufacturing, employ these services. In September 2020, Infosys McCamish announced the launch of a new industry platform called Infosys McCamish NGIN. Aimed at the global life insurance and annuity industry, the platform is based on an evolutionary architecture and can be configured to address the regional and global requirements of insurance carriers. Some prominent players in the global business process outsourcing market include

• Accenture

• Amdocs

• Capgemini

• CBRE Group Inc.

• HCL Technologies Limited

• Infosys Limited (Infosys BPM)

• NCR Corporation

• Sodexo

• TTEC Holdings, Inc.

• Wipro Limited

Business Process Outsourcing Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the business process outsourcing market report based on service type, end-use, and region.

• Service Type Outlook (Revenue, USD Billion, 2018 - 2030)

  • Finance & Accounting

  • Human Resource

  • KPO

  • Procurement & Supply Chain

  • Customer Services

  • Others

• End-use Outlook (Revenue, USD Billion, 2018 - 2030)

  • BFSI

  • Healthcare

  • Manufacturing

  • IT & Telecommunications

  • Retail

  • Others

• Region Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa (MEA)