Indonesia Business Process Outsourcing Market Size, Share & Trends Analysis Report By Service Type (Human Resource, KPO), By End-use (BFSI, Healthcare, Manufacturing), And Segment Forecasts, 2023 - 2030

Report Overview

The Indonesia business process outsourcing market size was valued at USD 1.92 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 10.1% from 2023 to 2030. Indonesia business process outsourcing (BPO) industry is anticipated to be driven by growing adoption of cloud computing outsourcing services across different verticals such as BFSI, HR, and IT & telecommunications. In recent years, retail industry has undergone significant transformation. The inclusion of various technologies such as Artificial Intelligence (AI), Machine Learning (ML), Robotic Process Automation (RPA), and big data analytics remains a major positive for future growth of the market. Further, these BPO services are witnessing high demand owing to their various benefits, such as enhanced service quality, flexibility, and reduced costs, supporting proliferation of the market.

Market Dynamics

The Business Process Outsourcing (BPO) industry in Indonesia has witnessed significant changes due to a significant increase in adoption of cloud computing in recent years. The cost-effectiveness of cloud computing is one of the main factors contributing to its increasing popularity in BPO sector. Businesses can avoid making sizable upfront expenditures in infrastructure, software, and hardware by using cloud-based BPO services as cloud service providers ensure the reliable, on-demand, and flexible supply and management of these resources. This enables companies to spend less on capital projects and operating costs, saving money, and improving financial flexibility.

The Indonesian BPO market is featuring entry of several players offering cloud based BPO services, some of which are among top companies in the world. Cloud computing offers a vast range of benefits to BPO businesses, including enabling them to provide better quality control and increase production. Cloud computing in BPO also provides all-inclusive access, flexible provisioning, immediate computing assistance, and 24/7 system access for the necessary business needs. Moreover, BPO service providers leverage cloud computing to reduce the time needed to complete data-intensive business procedures. Cloud computing in BPO organizations helps enhance the data processing workflow while reducing turnaround time. The increasing popularity and adoption of the web have also made it easier to store programs in the cloud rather than in complex infrastructures prone to breakdowns.

Indonesia business process outsourcing industry has grown significantly over the years and is now a vital component of Indonesia’s economy. The major BPO offerings include highly specialized tasks such as web development, research, and other IT-related customer services to its potential clients. Many companies, both large and small, rely on outsourcing to remain competitive and stay ahead of the competition, creating a positive outlook for the market. The trends supporting growth of these services include use of omnichannel solutions, rise of social media management, integration of AI solutions, preference for remote work, strategic business partnerships, adoption by SMEs, and usage of progressive web applications.

The advancement of cloud technologies has been another major driver for growth of BPO, owing to its advantages such as scalability, lower cost, reliability, and agility. Moreover, various companies in the market have been coming up with cloud delivery of BPO services to improve their brand representation, further fueling the adoption of BPO services. For instance, in March 2022, PERSONIV joined NetSuite Business Process Outsourcing Partner Program. By joining this program, PERSONIV was able to deliver Finance & Accounting Outsourcing (FAO) Services to clients operating in industries such as logistics, financial services, transportation, retail, and restaurant.

Instead of call center software programs, businesses invest in real-time client involvement, which is expected to allow them to gather first-hand product insights and offer new products or solutions for handling upcoming problems. The business process outsourcing service providers perceive this transformation in customer management as a significant potential. It has been observed that BPOs invest in resources and skills necessary to offer a wide range of social media management services, such as business analytics, social media monitoring, and customer response auctioning, supporting market growth. Since customer service personnel and social media teams can handle customer complaints more effectively and rapidly, several BPO service providers are investing in specialized social media service teams.

Service Type Insights

Customer services segment accounted for largest market share of 32.2% in 2022. The BPO sector uses "customer satisfaction" as a marketing tool for its goods and services. Consumer service in BPOs refers to businesses that are focused on responding in real-time to customer inquiries received via chat, social media, email, phone, and other channels. The growth of customer service segment can be attributed to customer service BPO accessing specialized expertise, gains flexibility, and reducing costs, among others. Moreover, presence of top companies in the Indonesi business process outsourcing industry offering customer service solutions has paved the way for segment's growth over forecast period. Some of the major ones include Foundever, Majorel; VADS BERHAD; and Concentrix Corporation.

Finance & accounting segment is anticipated to grow at a CAGR of 10.5% during forecast period. The growing adoption of outsourcing solutions across finance & accounting sector to tackle problems in business operations and enhance financial performance across areas of North America, Europe, and Asia Pacific is driving market growth of finance & accounting segment in the market. Moreover, the country is home to many companies offering finance & accounting services type which has also contributed to growth of the segment in the country.

End-use Insights

IT & telecommunications segment accounted for a market share of 37.1% in 2022. Business process outsourcing is used by various IT & telecommunications firms to develop and enhance their product & service offerings. In-house hiring is costly and requires several resources for training, upkeep, office space, payroll, and IT infrastructure. BPO can provide better services with reduced costs to the clients through outsourcing as it saves expenses and resources in setup process.

BFSI segment is expected to grow at highest CAGR of 10.9% during forecast period. The BFSI industry has been expanding at a high growth rate with its fair share of concerns, which involves proliferating cyber-attacks, delivering superior customer experience, and increasing competition, creating robust opportunities in market. Financial organizations in Indonesia can benefit from service providers' expertise in managing non-core activities by outsourcing business processes. The ideal partner also helps introduce best business practices and maximize the association's benefits, resulting in high adoption of Indonesian business process outsourcing solutions among BFSI institutions, resulting in increased segment growth.

Key Companies & Market Share Insights

The key players operating in the Indonesia BPO market include Concentrix Corporation; Conduent, Inc; ExlService Holdings, Inc..; Genpact; and TELUS to broaden their product offering, companies utilize a variety of inorganic growth tactics, such as partnerships, regular mergers, and acquisitions. Further, in January 2023, TTEC Holdings, Inc. announced a strategic partnership with Google Cloud aimed at helping customers for using Google's AI-powered Contact Center-as-a-Service capabilities to streamline real-time interactions with customers across all live channels. Some prominent players in global Indonesia business process outsourcing (BPO) Market include:

• Concentrix Corporation

• Conduent, Inc.

• ExlService Holdings, Inc.

• Foundever

• Genpact

• KPSG

• Majorel

• Relia, Inc.

• Teleperformance

• TELUS

• Transcom

• Transcosmos inc.

• TTEC Holdings, Inc.

• VADS BERHAD

• WNS (Holdings) Ltd.

Indonesia Business Process Outsourcing Market Report Scope

Indonesia Business Process Outsourcing Market Report Segmentation

This report forecasts revenue growth at regional and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the Indonesia business process outsourcing market report based on service type and end-use:

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

  • Finance & Accounting

  • Human Resource

  • KPO

  • Procurement & Supply Chain

  • Customer Services

  • Others (Legal & tax, Logistics, and Training)

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

  • BFSI

  • Healthcare

  • Manufacturing

  • IT & Telecommunications

  • Retail

  • Others (Construction & Utilities, Travel & Transportation, and Government & Education)