The business world is highly competitive. Outsourcing certain tasks allows businesses to gain a competitive edge by optimizing work efficiency, cutting down operational costs, and enhancing customer service. Business process outsourcing companies handle organizations’ back office operations effectively, allowing them to focus on their core activities and improve productivity and revenue.
According to a market research report from Grand View Research, the business process outsourcing (BPO) market is expected to reach USD 405.6 billion by 2027, with a CAGR of 8.0 percent. BPO is an essential component of the business strategy of an organization. Many recent market research surveys have shown that the CEOs around the world feel that BPO is a key strategy for survival in today extremely competitive business environment as it provides various benefits such as cost savings, reduced recruitment requirements, lower training expenses, assured quality of service and greater accountability and transparency in production standards.
Over the years, BPO services have gained momentum in various industries such as Banking, Financial Services, and Insurance (BFSI), healthcare, manufacturing, IT and telecommunications, retails, government, education, travel and transportation, construction, and utilities. Although there are many advantage of business process outsourcing, with the rising budgetary pressure and lack of effective fundamental concern, there growth of BPO market is restrained.
The key findings of the Grand View Research study are as follows:
- In 2019, North America had the largest share of the global business process outsourcing market and is expected to register substantial growth over the forecast period. This growth is due to rapid proliferation of IT and telecommunication sectors in U.S. In 2019, the IT and telecommunication segment alone in U.S. held the largest market share with more than 30 percent.
- The human resource service segment is expected to exceed 8.0% CAGR over the forecast period due to the rising need of resources across its several sub-segments like administration, recruitment, payment processing and other employee benefits.
- The customer service segment in 2019 had a share of over 31.0% of the global market share due to extensive and widespread establishment of call centers across the world and rising requirements of technical and maintenance staff for various sectors like IT and telecommunications and healthcare.
The BPO market is segmented in nature and it is characterized by large and medium size companies. Enterprises use business process outsourcing companies as a means to cut down cost as well as access experienced workers to attain quality output. A company may not be well equipped to handle all process at once. BPO services are a feasible option to get portions of their work handled by experts in a timely manner and help them to successfully execute their projects.
The impact of COVID 19 on the BPO market remains to be seen. The Economic Times recently reported that industries such as travel, hospitality, airlines, retail, hi-tech, oil & gas, financial services, and manufacturing are the most affected by the coronavirus outbreak, which may have implications for BPO.
