The global business process outsourcing market size is expected to reach USD 525.2 billion by 2030 and exhibit a CAGR of 9.1% from 2022 to 2030. The adoption of business process outsourcing (BPO) services is based on reducing the cost of business operations by organizations, and accessing global resources, thus meeting the demand of the industry. Besides, the factors driving industry expansion are the improvement of business agility for organizations, and the emphasis on core competencies to survive the continuous modifications in business dynamics.
Organizations are focused on reducing operational expenses and this factor is likely to drive the growth and demand for BPO services globally. For instance, a decrease in geographical and logistics barriers has resulted in cost reduction for BPO services. Additionally, organizations achieve a 30-40% decrease in cost reduction while operating with third-party outsourcing service providers. With BPO services organizations can initiate savings by removing the physical overhead of staff maintenance, equipment and office space, and tax savings. All these factors are likely to contribute towards the industry growth, thus increasing demand for BPO services in the market.
Owing to the COVID-19 impact in 2020, high demand for standardized platform services has been observed that enabled BPO services to solve business processes that are complex in nature. For instance, COVID-19 acted as a catalyst for rapid alteration of the BPO model that allows flexibility between outsourcing partners and clients. The model indicates that based on the response from outsourcing partners, the determination to resolve business crisis in the future is expected to increase the expectations from the BPO industry. Besides, the adverse effects of COVID-19 resulted in economic and social disruptions that brought major changes in business activities. The disruptions have also resulted in a high emergence of business continuity plans (BCP) that has been restructured by BPO organizations for modifying their business models to create growth opportunities in the BPO market.
In terms of segment, the industry has observed a rise in IT and telecommunication companies due to rapid industrialization globally that resulted in high demand for BPO services. For instance, telecom organizations implemented outsourcing business activities like call-center outsourcing, financial accounting, and as well as billing operations. BPO services have been useful for this segment in the form of capital expense reduction, flexible strategy for retaining and acquiring customers, gaining specialized resources, optimizing the latest investments, and managing cost pressures.
In terms of region, Asia Pacific is anticipated to expand at a high CAGR steadily during the forecast period and dominate the BPO services market. The increase in demand for talented professionals, low labor costs, and digital investments made by vendors are driving the regional growth of the industry. For instance, HCL Technologies Limited successfully entered the market in Vietnam in December 2020. The purpose was to expand the business, thus allowing the organization to hire talented and skilled employees and eventually provide IT solutions in the country.
Key players are focusing on expansion strategies, partnerships, and mergers and acquisitions with the aim to sustain in a competitive market by increasing their reach, developing market trends, making advancements in technology, and providing services. For instance, Amdocs signed a partnership with VEON Ltd., a provider of connectivity and internet services in October 2021. The purpose of the partnership was to provide innovative digital services to consumers of Kazakhstan and Uzbekistan.
Research Support Specialist, USA
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