The global business process outsourcing market size is expected to reach USD 405.6 billion by 2027, expanding at a CAGR of 8.0 %, according to a study conducted by Grand View Research, Inc. The major factor encouraging companies to outsource their business activities is cost saving. However, enhanced operational efficiency, improved customer service, innovation, and flexibility are some other factors that will bolster market growth over the forecast period.
The outsourcing of business activities enables companies to focus on their core competencies and enhance their business activities, thereby reducing operational costs. Thus, the essential need to reduce operational costs is a key factor that is anticipated to drive the growth of the market over the forecast period. Furthermore, numerous companies are considering outsourcing as a solution to meet their back-office requirements owing to benefits such as increased productivity and workload management.
Business Process Outsourcing is an integral element of the global outsourcing industry. Additionally, Business Process Outsourcing (BPO) is rapidly gaining momentum across an array of verticals such as Banking, Financial Services, and Insurance (BFSI), healthcare, manufacturing, IT and telecommunications, retail, and others. The others segment includes government, education, travel and transportation, construction, and utilities. BFSI is expected to emerge as the fastest-growing segment over the next few years. Furthermore, BPO addresses the challenges of the BFSI industry. It ensures data management and data integrity. Additionally, it also offers reliable, relevant, and timely data delivery to improve decision making.
Although the market is expected to grow considerably over the forecast period; companies/market players exhibit a dependency on external outsourcing service providers; this dependency presents a potential security risk with reference to integrity and confidentiality of 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 frameworks to ensure quality of service are some of the key factors restraining the growth of BPO market.
Further Key findings from the study suggest:
- In 2019, the customer service segment held over 31.0% of the global market share due to extensive and widespread establishment of call centers across the world and increasing requirement of technical and maintenance staff across various sectors such as IT and telecommunications and healthcare
- The human resource service segment is predicted to exceed 8.0% CAGR over the forecast period, on account of increasing need of resources across its various sub-segments such as administration, recruitment and relocation, payment processing, and other employee benefit services
- In 2019, North America accounted for the largest share of the global business process outsourcing market and is anticipated to register substantial growth over the forecast period. This growth is ascribable to rapid proliferation of IT and telecommunication sectors in U.S. For instance, in 2019, the IT and telecommunication segment in U.S. held the largest market share exceeding 30.0%
- The market is fragmented in nature and characterized by large and medium size companies. The major global players operating includes Accenture, Infosys Limited, Wipro, and HCL.