Business Process Outsourcing Market Worth USD 343.2 Billion By 2025
The global business process outsourcing (BPO) market size is expected to reach USD 343.2 billion by 2025 at a 7.4% CAGR during the forecast period, according to a study conducted by Grand View Research, Inc. Need to reduce operational costs is a key factor anticipated to drive the market. Any additional expense spent on an equipment or business that is not among major competencies of a company is termed as operational costs. An increasing number of companies have been outsourcing these operations, enabling them to focus on core competencies and enhance their business. This results in cost efficiency and effective time as well as resource management.
Furthermore, numerous companies are considering outsourcing as a solution to meet their back office requirements. Increased flexibility, improved service quality, increased productivity, and workload management are some of the additional advantages of outsourcing, which are expected to contribute toward market growth over the next few years.
Rising establishment of call centers and customer service centers in Asia Pacific and North America is also positively affecting market growth. Emergence of next-generation services such as big data analytics, cloud services, and robotic process automation are other factors projected to fuel market growth.
Business process outsourcing is an integral element of the global outsourcing industry. Additionally, BPO is rapidly gaining momentum across an array of verticals such as banking, financial services, and insurance (BFSI), healthcare, manufacturing, IT & telecommunications, retail, and others.
The others segment includes government, education, travel & transportation, construction, and utilities. BFSI is expected to emerge as the fastest-growing segment over the next few years as BPO addresses several challenges faced by the industry. It ensures data management and data integrity. It also offers reliable, relevant, and timely data delivery to improve decision making.
Although the business process outsourcing market is expected to grow considerably over the forecast period, companies exhibit a dependency on external outsourcing service providers. This dependency presents a potential security risk with reference to the integrity and confidentiality of a user’s data. Furthermore, maintaining and preserving the confidentiality and integrity of user’s data is a fundamental concern common for all companies. Moreover, rising budgetary pressures and lack of effective framework to ensure quality of service are some of the key factors hindering market growth.
Partnerships and collaborations is a key strategy among leading players to consolidate their presence in the market. For instance, in October 2014, Capgemini entered into a partnership with NetSuite. NetSuite provides cloud computing solutions worldwide. Through this partnership, Capgemini launched its new virtual company that provides BPO solutions. The various business solutions offered include finance and accounting, human resources, and a host of technology solutions.
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Further key findings from the study suggest:
- By service, customer service held over 30.0% of the global BPO market in 2017 due to extensive and widespread establishment of call centers across the world and increasing requirement of technical and maintenance staff across sectors such as IT & telecommunications and healthcare
- The human resources service segment is predicted to exceed a CAGR of 7.0% over the forecast period, on account of increasing need for resources across various sub-segments such as administration, recruitment & relocation, payment processing, and other employee benefit services
- North America led the global business process outsourcing market in 2017. This can be attributed to rapid proliferation of the IT & telecommunication sectors in U.S. In 2017, this sector held a market share of over 70.0% in U.S.
- Prominent market players include Accenture, Infosys Limited, Wipro, and HCL. These players focus on partnerships and collaborations with the objective of consolidating their market presence.
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About Grand View Research:
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.