Business Process Outsourcing (BPO) Market

Business Process Outsourcing Industry Outlook (2022-2032)

The global business process outsourcing market will grow at an impressive 8.5% CAGR to touch the US$ 620 Billion mark through 2032. North America is likely to capture a lion’s share in the overall BPO market.

Report Attributes	Details
Market Size in 2022	US$ 273.3 Billion
Value CAGR (2022-2032)	8.5%
Market Share of North America	60%
Key Companies Profiled	Accenture Plc. IBM Corporation Cognizant Concentrix Wipro Limited Genpact ADP Data Processing Inc. EXL Service Invensis Technologies Pvt. Ltd. SunTec India Intetics Unity Communications Helpware Plaxonic Technologies Octopus Tech

Revenue from Business Process Outsourcing Industry from 2017 to 2021 Compared to Demand Outlook for 2022 to 2032

Organizations are increasingly looking for specialized companies that provide the much-needed support services to business processes that can be outsourced without the direct investment of dedicated time and human resources. Hence, the demand for BPO services experienced a spike in the past half-decade and reached US$ 232.3 Billion in 2021, growing at a 7% CAGR throughout the historic period.

The market is anticipated to benefit from the swelling focus of organizations on enhancing business agility, surviving the constantly changing business dynamics. Owing to this, the market valuation is projected to touch the US$ 620 Bn mark by the end of 2032, expanding at a CAGR of 8.5%.

What are the Factors Driving the Demand for the Business Process Outsourcing?

The shift of focus from monopolistic business strategies to shared workload business culture is spurring demand for business process outsourcing for improved results and continued success.

With remote working becoming a possibility, BPOs are likely to benefit a lot. First bigger organizations will rely on them and secondly, they will be open to hiring the best employees from across the country or globe. The COVID-induced pandemic has introduced new normal and opened boundaries for BPOs. 

Varied organizations including Facebook have announced that “if remote working continues, they will revise salaries, hire more proficient employees available in less expensive economies”. BPO sales processes are likely to follow suit and have employees that are well-educated and are available at a lesser cost.

The significant reduction of the cost needed for the maintenance of the workplace is another benefit that encouraged organizations to offer remote work and hybrid setups. Prior to the coronavirus (COVID-19) epidemic in 2020, working from home was a luxury.

What are the Key Market Trends & Growth Opportunities in Business Process Outsourcing Market?

The adoption of robotic process automation has completely transformed the BPO industry. Special software robots i.e., bots are coded and assigned to the existing workstream wherein they start performing tasks with greater speed, accuracy, and precision.

Artificial Intelligence or AI is becoming an increasingly vital feature in every industry and the outsourcing business is no different. AI is being increasingly employed to automate several data entry and processing functions including accounts payable processing, invoice management, and utility bill processing. AI streamlines all these processes by identifying and segregating data and even automatically filling in missing details.

Artificial intelligence and Machine learning are mostly adopted recent trends in business processes by global organizations. About 22% of respondents to a survey on AI capabilities confirmed that by 2020 their organizations have deployed robotic process automation. And about 33% of respondents have reported heavy dependence on AI technologies in business processes.

As digitization has advanced and the economy has shifted to one that is more knowledge-based, companies and employees are increasingly likely to choose remote work and hybrid work options. The world is now different. The ability to work remotely has recently been a key factor in hiring decisions.

Average cost of a BPO likely is USD 45 to USD 1500 per month for HR, and USD 110 to USD 160 per user for IT. Most businesses choose to outsource their IT to save money. Its cost-effectiveness and low operating cost make it popular in the start-up business ecosystem.

Country-wise Insights:

Why North America Remains at the Forefront of BPO Services?

North America dominates the BPO market with a majority market share of over 3/5th of the overall market value. The growth is largely attributed to the presence of prominent tech firms and start-ups in the region.

The revenue from business process outsourcing is anticipated to surpass a valuation of USD 0.35 Trillion by end of the year 2023. On the basis of global comparison, most of the revenue will be accomplished from the U.S. region. The average spending on per-employee business process outsourcing is expected to cost USD 100 per employee in 2023.

In the U.S alone, the total count of global BPO companies is 265,679, an upsurge of 4.1% from 2021. After North America, Europe follows with the second-largest share of more than 1/4th of the global market value.

Firms operating in the province are profoundly capitalizing on the progress of advanced technologies like analytics, big data, cloud computing, and artificial intelligence (AI) to provide comprehensive BPO services to their clients.

Adherence to regulatory compliance is essential for BPO companies. In fact, BPO companies rank after banking and insurance firms and have to follow many standard regulations. HR outsourcing firm has to follow labor laws, finance sourcing companies have to adhere to accounting laws, and medical devices are governed by the FDA act in U.S.

How is Business Process Outsourcing Market Fostering in the Asia-Pacific Region?

Asia pacific region countries hold about 22% of outsourced customer experience arcades in 2017. This is anticipated to increase the market share in BPO in the forecast period.

The Asia Pacific displays remarkable growth throughout the forecast period. The thriving digital economy with the advent of customer care technologies such as automated chatbots generates augmenting demand for dedicated customer care. Participants in emerging economies of Asian countries are leveraging inter-connected business process outsourcing services to make sure quality of service and subsequent competitive edge. The region is likely to cultivate at a compounded annual growth rate of over 11% from 2022 to 2032.

Countries like China, India and the Philippines are among the fastest-growing economies owing to the convenience of the low-cost talent pool of IT process outsourcing. Companies in developed economies outsourced their business processes to emerging economies such as India and China to invest in their affordable talent pool.

Category-wise Insights:

How IT & Telecommunication Industry Influence the Demand for Business Process Outsourcing?

Early adopter segments such as IT & Telecommunications are at the forefront of BPO practices. IT & Telecommunications account for over 57% of the total business process outsourcing (BPO) market value. Currently, the commencement of big data analytics, process automation, and the likes has shaped more competitiveness in the field of BPO. Though, there’s also an upsurge in the demand for talent in the BPO and IT sectors. The advance of e-commerce and health industries combined with the pre-existing IT industries has led to generating a high demand for BPOs.

Further, constant advancements in data management technologies such as servers, storage, and virtualization compel IT & Telecommunication companies to outsource their IT infrastructure or processes to gain a competitive edge. Industry verticals such as travel, transportation, and government-held companies are buckling up and integrating BPO services.

Is Finance & Accounting Sector Likely to Gush Demand for Business Process Outsourcing?

Accounting outsourcing service establishes a significant function in the global finance and accounting market. The total economic crisis is projected to substitute the demand for F&A BPO activities, as the service needs less customization when the process and technology are outsourced (in comparison to customer care and HR BPO).

Growing demand for transparency and increased regulations are driving companies to standardize their F&A (Finance and Accounting) BPO activities. The move towards standardization is also pouring the incorporation of best practices in financial management, which is a chief propelling factor for the acceptance of F&A BPO services.

Competitive Landscape

Prominent players are embracing innovative approaches such as ground-breaking marketing tactics, technological advancements, mergers, and acquisitions to expand their market ground

• In December 2021, Accenture (NYSE: ACN) has completed the acquisition of Tambourine, an e-commerce customer experience agency with award-winning capabilities in cloud-based technologies in Japan. Tambourine provides integrated commerce services on the Salesforce platform and brings a proven track record in using Salesforce Commerce Cloud to deliver seamless commerce experiences for consumer goods and entertainment companies.
• In January 2022,  In January, Genpact Ltd, the business process outsourcing (BPO) company listed on the New York Stock Exchange (NYSE), bought Milpitas, California-based data analytics firm Enquero Inc. in the 14th acquisition

Key Segments Covered in the Business Process Outsourcing Industry Report

• By Services

  • Finance & Accounting
  • Human Resources
  • Knowledge Process Outsourcing
  • Procurement & Supply Chain
  • Customer Services
  • Others

• By End Use

  • Banking, Financial Services, and Insurance (BFSI)
  • Manufacturing
  • IT & Telecommunication
  • Retail
  • Others (travel and transportation, government, education, construction, and utilities)