CAGR: 9.5%Current Market Size: USD 261.9 BillionFastest Growing Region: APAC
Largest Market: North AmericaProjection Time: 2023-2030Base Year: 2022
The global business process outsourcing (BPO) market is expected to grow from USD 261.9 billion in 2022 to USD 541.3 billion by 2030, at a CAGR of 9.5% during the Projection period 2023-2030. The growth of this market is mainly driven owing to the rising demand among small and medium-sized enterprises.
BPO refers to outsourcing one or more IT-intensive business processes to an external provider, who then owns, administers, and manages them according to defined and measurable performance objectives. A BPO offer can be classified into two categories: vertical-specific solutions and horizontal-focused offers. Moreover, as a result of increased competitiveness resulting from new outsourcing sites as well as pressure on businesses to run more efficiently, the business process outsourcing market is expected to grow significantly. Automation will continue to threaten low-wage occupations in the outsourcing market. In recent years, start-ups have grown, and they are under a lot of pressure to compete against their contemporaries. The start-ups have relatively small budgets and seek out cost-effective employees. Consequently, they rely on BPOs to deliver talent at low costs and handle business processes like trading, accounting, recruitment and finance. With the traditional way of providing BPO services, providers have been offering cost-effective solutions. Cloud computing and artificial intelligence (AI) are altering the BPO process by lowering costs and accelerating growth, which is changing the way BPO companies deliver services. To reduce the cost of office space and infrastructure, companies are investing in cloud computing. The adoption of virtual storage and systems by small and medium-sized businesses is also increasing owing to the lower cost of hardware, data centres, and software as well as the increased mobility they offer.
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Market Dynamics:
Drivers:
The cloud computing revolution has driven digital transformation across industries, providing unparalleled agility and reducing operational and management overheads. Several governments and businesses are leveraging this technology and are slowly gaining popularity across several verticals. Its potential has become so broad that the notion of the cloud is no longer restricted only to IT functions.
Restraints:
For business process outsourcing to grow, security is an important problem. Many organizations use business process outsourcing to hand over essential or sensitive data to the supplier. The vendor can access a portion of their data supply chain, so they have to trust the vendor to a certain extent. The vendor's compliance with national or industry standards is also an issue that comes up from time to time.
Opportunities:
The concept of automated workflows was once reserved for rich organizations that would invest heavily in CRM and ERP systems, but with the advent of cloud technology, this concept has been turned upside down. People began to automate complex workflow processes to achieve process integration as technology evolved. Companies have observed dramatic growth of BPO in recent years as they see the benefits of lower costs, improved efficiency, and enhanced customer service.
Challenges:
There are many challenges facing business process outsourcing (BPO) companies, including attrition and a lack of skilled professionals. As a result of attrition in the BPO sector, companies experience terrible effects. High attrition costs increase the organization's costs considerably, hurting its productivity.
Segmentation Analysis:
The global business process outsourcing (BPO) market has been segmented based on deployment type, service type, end-user, and region.
By Deployment Type
The deployment type segment includes on-premise and cloud. The cloud segment led the largest share of the business process outsourcing (BPO) market with a market share of around 59.8% in 2022. BPaaS, also called business process as a service (BPaaS), is a form of BPO that uses a cloud computing service model and is expected to skyrocket in the coming years. BPaaS reduces labour costs by increasing automation, whereas traditional BPO aims to reduce labour costs through increased automation, which is why it is regarded as a form of BPO.
By Service Type
The service type segment includes customer services, procurement & supply chain, KPO, human resources and others. The customer services segment led the largest share of the business process outsourcing (BPO) market with a market share of around 29.8% in 2022. A rising number of service centres across the globe are required to provide offline and online technical support, so this segment is expected to retain its dominance and lead the CAGR during the Projection period. Companies that offer customer service are specialized in handling customer queries and requirements generated through social media platforms, email, chats, and phone calls.
By End-User
The end-user segment includes IT & telecommunications, manufacturing, retail, healthcare, and others. The IT & telecommunications segment led the largest share of the business process outsourcing (BPO) market with a market share of around 31.9% in 2022. A 36% share of revenue will come from IT and telecommunications in 2021 as the number of IT companies increases and the industry is becoming more industrialized. The telecom industry worldwide outsources a variety of telecommunications processes to reduce its overall expenses. Many businesses outsource various business activities.
Global Business Process Outsourcing (BPO) Market - Sales Analysis.
The sale of business process outsourcing (BPO) expanded at a CAGR of 8.7% from 2016 to 2022.
As technology advances, organizations can carry out their operations more efficiently and effectively. In the global business process outsourcing market, robotics technology is becoming one of the most prevalent technologies. By utilizing robotics technology, organizations can improve quality and performance while saving money as well.
A significant part of the demand for transparency has been fueled by government involvement. By enhancing services and increasing government involvement, transparency will allow clients and suppliers to develop better partnerships, resulting in better investment options and business innovation, further Projectioning the market's growth.
Furthermore, BPO allows companies to consolidate their sales and marketing efforts into one area to strengthen relationships with key customers.
Thus, owing to the aforementioned factors, the global business process outsourcing (BPO) market is expected to grow at a CAGR of 9.5% during the Projection period from 2023 to 2030.
By Regional Analysis:
The regions analyzed for the business process outsourcing (BPO) market include North America, Europe, South America, Asia Pacific, the Middle East, and Africa. The North American region dominated the business process outsourcing (BPO) market and held a 39.7% share of the market revenue in 2022.
Global Business Process Outsourcing (BPO) Market - Country Analysis:
Germany's business process outsourcing (BPO) market size was valued at USD 18.2 billion in 2022 and is expected to reach USD 37.8 billion by 2030, at a CAGR of 9.6% from 2023 to 2030.
To gain a competitive edge, market players are expanding their service offerings. As a result of the expanding industry, infrastructure development and technical improvements in developing countries, the country's market is steadily growing. As IoT and AI technologies become more popular, the market will continue to grow. An important factor driving the market's rapid growth is the government's support and investment in building a new power distribution and transmission system.
China’s business process outsourcing (BPO) market size was valued at USD 20.41 billion in 2022 and is expected to reach USD 43.11 billion by 2030, at a CAGR of 9.8% from 2023 to 2030.
Due to the advancements in Belt Road Initiatives (BRIs), China is becoming one of the most lucrative markets for business process outsourcing. To increase market share, favourable tax reforms to attract foreign investors as well as government subsidies for outsourcing companies to provide BPO-related training and courses for eligible graduates should be in place.
India's business process outsourcing (BPO) market size was valued at USD 15.7 billion in 2022 and is expected to reach USD 32.9 billion by 2030, at a CAGR of 9.7% from 2023 to 2030.
The low-cost labour, skilled workforce, and geographical advantage of India have made it a leader in business process outsourcing (BPO). Increasingly, companies are outsourcing their business processes to save money and improve efficiency in India, one of the world's top destinations for BPO services.
Key Industry Players Analysis:
To increase their market position in the global business process outsourcing (BPO) market business, top companies focus on tactics such as adopting new technology, mergers & acquisitions, product developments, collaborations, partnerships, joint ventures, etc.
Latest Development:
Report Metrics
Report Attribute |
Details |
Study Period |
2022-2030 |
Base year |
2022 |
CAGR (%) |
9.5% |
Market Size |
261.9 billion in 2022 |
Projection period |
2023-2030 |
Projection unit |
Value (USD) |
Segments covered |
By Deployment Type, By Service Type, By End-User, and By Region. |
Report Scope |
Revenue Projection, competitive landscape, company ranking, growth factors, and trends |
Companies covered |
HCL Technologies Limited, Unity Communications, IBM Corporation, Invensis Technologies Pvt. Ltd, Plaxonic Technologies, Tata Consultancy Services Limited, Tech Mahindra Limited, NCR Corporation, Wipro Limited, and Infosys Limited. |
By Deployment Type |
|
By Service Type |
|
By End-User |
|
Regional scope |
|
Scope of the Report
Global Business Process Outsourcing (BPO) Market by Deployment Type:
Global Business Process Outsourcing (BPO) Market by Service Type:
Global Business Process Outsourcing (BPO) Market by End-User:
Global Business Process Outsourcing (BPO) Market by Region:
Global business process outsourcing (BPO) market is expected to reach USD 543.1 billion by 2030, at a CAGR of 9.5% from 2023 to 2030.
Leading players in the business process outsourcing (BPO) market are HCL Technologies Limited, Unity Communications, IBM Corporation, and Invensis Technologies Pvt. Ltd, Plaxonic Technologies, Tata Consultancy Services Limited, Tech Mahindra Limited, NCR Corporation, Wipro Limited, and Infosys Limited among others.
Rising adoption of digital technologies and automating complex workflow.
North American region will witness more growth in the business process outsourcing (BPO) market.
The segments covered in the business process outsourcing (BPO) market are; deployment type, service type, end-user, and region.
List of Table
List of Figures