Business Process Outsourcing Market (By Service Type: Finance & Accounting, Human Resource, KPO, Procurement, Customer Services, and Others; and By End Use: BFSI, Healthcare, Manufacturing, IT & Telecommunications, Retail, and Others; By Outsourcing Type; By Deployment Model; By Organization Size; By Ownership) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2022 – 2030

The global business process outsourcing market was estimated at US$ 268.21 billion in 2021 and is expected to surpass around US$ 576.98 billion by 2030, poised to grow at a CAGR of 8.9% during the forecast period 2022 to 2030.

Growth Factors:

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.

Report Scope of the Business Process Outsourcing Market

Report Coverage

Details

Market Size by 2030

USD 576.98 Billion

Growth Rate from 2022 to 2030

CAGR of 8.9%

North America Market Share in 2020

36%

IT and telecommunications Market Share in 2020

34%

Customer Services Market Share in 2020

31%

Forecast Period

2022 to 2030

Segments Covered

Service Type, End Use, Outsourcing Type, Deployment Model, Organization Size, Ownership, Geography

Companies Mentioned

Tech Mahindra Limited, HCL Technologies Limited, Tata Consultancy Services Limited, IBM Corporation, Wipro Limited, NCR Corporation, Infosys Limited, Invensis Technologies Pvt. Ltd, Unity Communications, Plaxonic Technologies

 

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.

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

Some of the prominent players in the Business Process Outsourcing Market include:

  • Tech Mahindra Limited
  • HCL Technologies Limited
  • Tata Consultancy Services Limited
  • IBM Corporation
  • Wipro Limited
  • NCR Corporation
  • Infosys Limited
  • Invensis Technologies Pvt. Ltd
  • Unity Communications
  • Plaxonic Technologies

Segments Covered in the Report

This research report offers market revenue, sales volume, production assessment and prognoses by classifying it on the basis of various aspects. Further, this research study investigates market size, production, consumption and its development trends at global, regional, and country level for the period of 2017 to 2030 and covers subsequent region in its scope:

By Service Type

  • Finance & Accounting
  • Human Resource
  • KPO
  • Procurement
  • Customer Services
  • Others

By End Use

  • BFSI
  • Healthcare
  • Manufacturing
  • IT & Telecommunications
  • Retail
  • Others

By Outsourcing Type

  • Offsource
  • Nearshore Onshore

By Deployment Model

  • Cloud
  • On Premise

By Organization Size

  • Large Enterprises
  • SMEs

By Ownership

  • Captive
  • Third Party

By Geography

North America

  • U.S.
  • Canada

Europe

  • Germany
  • France
  • United Kingdom
  • Rest of Europe

Asia Pacific

  • China
  • Japan
  • India
  • Southeast Asia
  • Rest of Asia Pacific

Latin America

  • Brazil
  • Rest of Latin America

Middle East & Africa (MEA)

  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa

Key Points Covered in Business Process Outsourcing Market Study:

  • Growth of Business Process Outsourcing in 2022
  • Market Estimates and Forecasts (2017-2030)
  •  Brand Share and Market Share Analysis
  •  Key Drivers and Restraints Shaping Market Growth
  •  Segment-wise, Country-wise, and Region-wise Analysis
  •  Competition Mapping and Benchmarking
  •  Recommendation on Key Winning Strategies
  •  COVID-19 Impact on Demand for Business Process Outsourcing and How to Navigate
  •  Key Product Innovations and Regulatory Climate
  •  Business Process Outsourcing Consumption Analysis
  •  Business Process Outsourcing Production Analysis
  •  Business Process Outsourcing and Management