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.
Many of the organizations don’t have enough resources to fulfill their tasks and projects. So, they hire third party who accomplish assigned tasks in a given period of time. This is known as business process outsourcing. The business process outsourcing is on the basis of contract for specific time period. There are varieties of business processes which can be outsourced. Those business processes are defined as marketing, human resource, accounting, supply chain management, and customer support and service. Nowadays, even small-scale organizations have started outsourcing their processes. This is creating future prospects for the growth of the global business process outsourcing market.
The increased growth of the business process outsourcing market will be driven by increasing competitiveness from new outsourcing sites, as well as pressure on businesses to run more cost-effectively. The low wage occupations in the business process outsourcing market will be continued to be threatened by automation.
The technological advancements and innovation are helping organizations to carry out their business effectively and efficiently. The robotics technology is becoming one of the prominent technologies in the global business process outsourcing market. The robotics technology helps in improving quality and performance, and also helps in cost savings. The countries were work cost is low, are the major contributors to the expansion of the business process outsourcing market. The fact is that the low-cost countries have cheaper rates of work and resources are readily available. All these factors is driving the growth of the market.
Report Scope of the Business Process Outsourcing Market
|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 cost control is one of the main advantages of business process outsourcing. In most cases, third party business process outsourcing services are less expensive than hiring individuals to perform it in-house. There are also a variety of cost-cutting opportunities in terms of international tax methods and the cost of establishing services in a particular country. Another advantage is that in-house staff may concentrate on core operations rather than having to handle all human resources and payroll work, or whatever else is outsourced.
The security of business process outsourcing is a major problem for the growth of the business process outsourcing market. Many businesses process outsourcing arrangements need the organization handing over essential or sensitive data to the supplier to a great extent. As the supplier has access to a portion of their data supply chain, they must trust the vendor to a degree. The compliance with national or industry standards is also an issue that comes up from time to time.
Another issue with the business process outsourcing is the amount of control clients must hand over the third-party providers. The cost barriers, where third party service businesses abruptly boost the cost of services owing to some benchmark, are a source of concern.
When businesses refer to business process outsourcing firms, they frequently speak to the kind of business functions and tasks that will be outsourced. The business process outsourcing services are classified into two categories based on the demands of the firm. Those two categories are back-office outsourcing and front office outsourcing.
The back-office outsourcing is a type of outsourcing that focuses on in-house business functions such as data collection, internet research, data entry, order processing, data analysis, quality assurance, payment processing, billing, and information technology services. The front office business process outsourcing refers to the outsourcing of customer facing tasks like sales, marketing, customer service, technical support, and grievance redressal.
Service Type Insights
In 2020, the customer services segment accounted revenue share of 31%. The growing number of service centers throughout the world that requires both online and offline technical help is responsible for the customer services segment’s strong market share.
The human resource services segment, on the other hand, is predicted to develop at the quickest rate in the future years. The increasing demand for resources across several sub-segments such as recruiting and relocation, payment processing, and administration is projected to help the segment grow.
End Use Insights
The IT and telecommunications segment accounted revenue share of 34% in 2020. The rise in the number of IT companies and the rising industrialization are both contributing to the segment’s growth. Several telecommunications procedures are being outsourced by telecom firms around the globe in order to lower their overall expenses. Various business tasks are outsourced by telecom enterprises.
The BFSI segment is fastest growing segment of the business process outsourcing market in 2020. The business process outsourcing has long been a reliable tool for improving the cost efficiency of financial institutions’ operations, the quality of their services, and the flexibility of their business processes.
North America region accounted market share of 36% in 2020. The increased adoption of cloud enablement and digital services, which necessitate frequent assistance and maintenance for corporate operations, was related to the increase in growth.
Asia-Pacific, on the other hand, is expected to develop at the fastest rate during the forecast period. The government entities are likely to make major expenditures in infrastructure development, which will assist to improve the region’s existing business process outsourcing ecosystems.
The mergers and acquisitions, partnerships, new product development, business expansions, collaborations, supply contracts, agreements, and contracts are some of the important marketing strategies used by the major market players to maintain their market position. These market players act as third-party firms for the organizations who outsource business processes from them.
Some of the prominent players in the global business process outsourcing market include:
Segments Covered in the Report
By Service Type
By End Use
By Outsourcing Type
By Deployment Model
By Organization Size
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