Definition : The Business Process Outsourcing (BPO) market refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers). A distinction is made between horizontal and vertical outsourcing. Horizontal BPO combines function-centric as well as cross-sector and cross-industry services, such as human resources management or payroll accounting. Vertical BPO, on the other hand, focuses on specialized services and is especially appealing to customers from the financial services industry, the healthcare sector, the manufacturing industry, or the retail sector.
The Business Process Outsourcing market comprises revenues, revenue change, average spend per employee, and the market shares of the different business sectors. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include Accenture, Cognizant, Wipro, and IBM.
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Back office process outsourcing, such as Genpact, Concentrix, HCL Technologies, Sutherland Global Services, EXL Services, Remote Coworker, and TechSpeed
Front office process outsourcing, such as IBM Global Services, Hewlett Packard Enterprise (HPE), Sitel Group, Teleperformance, and Qualfon
Application outsourcing, such as ScienceSoft, Arcanys, and SumatoSoft
Administration outsourcing, such as Conduent, Genpact, and ADP (Automatic Data Processing)
Infrastructure outsourcing, such as IBM Global Technology Services, Wipro Infrastructure Engineering, and Cognizant Infrastructure Services
The demand for Business Process Outsourcing (BPO) services has been on the rise in recent years. The growth of the BPO market can be attributed to various factors such as cost-effectiveness, improved efficiency, and access to skilled resources.
Customer preferences: Customers are increasingly looking for BPO providers that offer a wide range of services such as customer service, technical support, and back-office operations. Additionally, customers are looking for BPO providers that can offer customized solutions that cater to their specific business needs.
Trends in the market: The BPO market in North America is expected to witness significant growth due to the increasing adoption of automation technologies such as Robotic Process Automation (RPA) and Artificial Intelligence (AI). These technologies are being used to automate repetitive tasks and improve the overall efficiency of BPO operations. In Europe, the BPO market is expected to grow due to the increasing demand for multilingual services. The Asia-Pacific region is also expected to witness significant growth due to the availability of a large pool of skilled resources and cost-effectiveness.
Local special circumstances: In India, which is one of the largest BPO markets in the world, the BPO industry is facing challenges due to the increasing demand for onshore services in the United States and Europe. Additionally, the industry is facing challenges due to the increasing adoption of automation technologies. In the Philippines, which is another major BPO market, the industry is facing challenges due to the increasing competition from other countries such as Vietnam and Indonesia.
Underlying macroeconomic factors: The growth of the BPO market can be attributed to various macroeconomic factors such as globalization, increasing competition, and technological advancements. Globalization has led to the outsourcing of business processes to countries with lower labor costs. Additionally, increasing competition has forced businesses to focus on their core competencies and outsource non-core activities. Technological advancements have also played a significant role in the growth of the BPO market by enabling providers to offer more efficient and cost-effective services.
The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.
Modeling approach / Market size:
Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.
The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.