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Business Process Outsourcing (BPO) - Global Market Trajectory & Analytics

  • ID: 347963
  • Report
  • April 2021
  • Region: Global
  • 776 Pages
  • Global Industry Analysts, Inc
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The Pandemic Exposes the Weakness of the BPO Infrastructure

As COVID-19 outbreak influences outsourcing strategies for companies the world over, the business Process Outsourcing (BPO) market is in for short-term and long-term challenges. The global BPO industry is forecast to reach a revised market size of US$230.2 billion by 2027 exhibiting a CAGR of 5.2%, after posting a devastating decline of -28.7% in the year 2020. The pandemic has exposed the weakness of the fragile outsourced IT-BPO service ecosystem. The most prominent being the industry’s lack of ability to cope with remote working and work-from-home (WFH) like the other industries. BPO companies are typically saddled with stringent client confidentiality norms given the confidential nature of corporate information and data handled by these companies on behalf of their clients. For example most BPO service contracts are subject to regulations that govern handling of sensitive back office data such as financial transactions. This has made the industry less agile in transforming and adapting to WFM model. Bottlenecks encountered include lack of security tools and technologies to support data privacy of mission-critical enterprise customers; and infrastructure needed to enable speed, quality, and overall efficacy of services provided i. e. laptops, internet connectivity, robust Wi-Fi, VPN, VDI, and/or Citrix access, among others. Stringent lockdown measures imposed have also impacted maintenance of data centers containing confidential information, adding to business continuity woes. With companies forced to work with 25% to 50% of staff, the shortage of staff and IT resources is increasing not just costs but also inability to deliver services on time leading to delays and legal liabilities for non-performance.

Flexibility & Agility Storm into the Spotlight Overthrowing Cost as the Only Motivator

In addition to terminated contracts, legal lawsuits regarding failure to deliver on contractual obligations have also spiked among contracting parties. In short, outsourcing services providers and their clients have been exposed to disruption, increased costs, and increased legal complications. Especially in offshore locations in Asian countries, slipping service levels have severely disrupted operations, forcing companies to rethink their outsourcing strategies. The scenario is creating major upheavals in the current outsourcing business model. Low labor cost was the primary factor for outsourcing until the pandemic brought into focus the importance of flexibility. With flexibility now being paramount, reshoring of call centers and other back office operations will be the theme in the coming years instead of off shoring. The simmering unrest and change underway points towards the emergence of reshoring and reverse globalization as major long-term threats posed by the COVID-19 pandemic. From one of the most flourishing industries in the world, outsourcing has become the most troubled likely to witness a permanent shaking up of growth dynamics. Post pandemic, as social distancing norms become more permanent and part of the changing culture, outsourcing will regain relevance and popularity. Companies looking to reduce worker density in enterprise departments will fall back on outsourcing. However, this unlike earlier will create opportunities for near shoring and on shoring as compared to off shoring.

Near shoring is the New Post-COVID-19 Future of Outsourcing

In the post pandemic world, near shoring is poised to be the next big thing in outsourcing. Off shoring business processes and software development to far-off Asian countries lured by cost benefits will increasingly become a thing of the past. The COVID-19 pandemic has highlighted business continuity as a risk far greater than the typical language barriers, cultural differences, different time-zone associated with off shoring. The current global contagion has highlighted the need for outsourcing engagements to work like partnerships and extension of the business rather than mere contracts and statement of work (SoWs). Another fallout of the pandemic and the accompanying disruption is the accelerated focus on automation with the help of technologies like artificial intelligence (AI). AI brings the promise to automate and replace customer service staff, which is high value proposition at a time when social distancing norms are becoming stricter and more important to health and safety of citizens worldwide. Virtual assistants and AI based chat bots are already showing immense potential in replacing call center staff/human agents. Apart from cost benefits, machines also offer immunity to work and operational disruptions caused by pandemic like the current corona virus outbreak.

Select Competitors (Total 206 Featured):
  • Accenture Plc
  • Alight Solutions LLC
  • American Data Exchange (AMDATEX)
  • Atos SE
  • Automatic Data Processing, Inc.
  • Capgemini SE
  • Capita Plc
  • Ceridian HCM, Inc.
  • CGI Group, Inc.
  • Cognizant Technology Solutions Corporation
  • DXC Technology Co.
  • EXLService Holdings, Inc.
  • Genpact Limited
  • Infosys BPM Limited
  • International Business Machines Corp.
  • KARVY Global Services Limited
  • NGA Human Resources
  • NTT DATA, Inc.
  • Randstad Holding NV
  • Sopra Steria Group
  • StarTek, Inc.
  • Tata Consultancy Services Limited
  • TriNet Group, Inc.
  • Wipro Limited
  • WNS Global Services Ltd.
Note: Product cover images may vary from those shown
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I. METHODOLOGY

II. EXECUTIVE SUMMARY

1. MARKET OVERVIEW
  • Influencer Market Insights
  • World Market Trajectories
  • COVID-19 Pandemic to Dent Market Prospects in the Immediate Term
  • Exhibit 1: Reshoring to Gather Steam in Post COVID-19 Environment: Top Reasons for Reshoring (% of Client Companies Ascribing to Each Reason)
  • COVID-19 Induced Recession to Curtail Commercial Enterprise Activity, While Inducing Weakness into BPO Sector
  • Exhibit 2: World Economic Growth Projections (Real GDP, annual % Change) for 2019, 2020 & 2021
  • An Introduction to Business Process Outsourcing (BPO)
  • Vertical BPO Vs. Horizontal BPO
  • Onsite BPO Vs. Offsite BPO Vs. Offshore BPO
  • BPO Business Models
  • Salient Features of Transactional, Niche & Comprehensive BPO Models
  • Common Services Offered by BPO Providers
  • Business Process Outsourcing (BPO): Current Market Scenario and Outlook
  • A Sneak Peak into Key Trends Observed by the BPO Industry
  • Developed Regions to Remain Primary Revenue Contributors
  • Exhibit 3: World BPO Market by Region (2020 & 2027): Percentage Breakdown of Revenues for Developed and Developing Regions
  • Robust Growth Opportunities in Developing Regions
  • The Asian BPO Phenomenon: Enabled by `Triple Convergence’
  • Latin America Emerges as a Global Delivery Location
  • Exhibit 4: Global BPO Market - Geographic Regions Ranked by Value CAGR for 2020-2027
  • A Brief Overview of Major Outsourcing Destinations
  • Competitive Landscape
  • Major Vendors of Finance & Accounting BPO Services
  • Exhibit 5: Leading Players in the Global F&A BPO Market (2019): Percentage Breakdown of Revenues
  • Procurement BPO Services: Dominant Players
  • ADP Holds Edge in HR BPO
  • Genpact: Prime Vendor of Banking BPO Services
  • Service Providers Focus on Innovative Offerings to Move Up Value Chain
  • M&A Activity Intensifies
  • Recent Market Activity
2. FOCUS ON SELECT PLAYERS

3. MARKET TRENDS & DRIVERS
  • Established Role in Business Process Implementation Across Diverse Sectors to Sustain Long-Term Growth
  • BPO: A Robust Tool for Enabling Global Expansion
  • For Creating Truly Global Products
  • To Drive Satisfaction Levels Among Customers Worldwide
  • Higher Awareness about Outsourcing Benefits: Another Major Factor Favoring Long-Term Growth
  • Advanced Technologies Strengthen Capabilities of BPO Model
  • Internet of Things (IoT) for Effective Delivery of BPO Services
  • Robotic Automation & Artificial Intelligence (AI) Seek Bigger Role in BPO Operations
  • Social Media Networking Trend Transforms Business Strategies
  • Growing Popularity of Cloud Computing
  • Growing Use of Mobile Based Customer Service Applications
  • Voice Biometrics: Growing Role in Customer Verification
  • Big Data Remains in Contention to Streamline Operations
  • BPO Providers Warm up to Green Computing
  • Strategic Innovations Take Center Stage in BPO Industry
  • Select Latest Innovations in the BPO Market
  • Commoditization, and Rise of Industry-Specific BPO, MSM & Bundled IT-BPO Services to Reshape the BPO Market
  • Platform BPO Seeks Opportunities
  • Platform BPO Vs Traditional BPO
  • Advantages of Platform BPO
  • Challenges for Platform BPO
  • Sourcing Strategy: Means to Achieve Business Process
  • Sole Sourcing: A Model for Increasing Operational Efficiency
  • Multi-Source Approach Gathers Steam
  • The Importance of Impact Sourcing
  • Offshore BPO Remains Highly Relevant Offering Cost Economies
  • Nearshoring Finds Favor among Businesses
  • Trade-off between Quality & Cost Warrants Revamp of the Global BPO Industry
  • Emphasis on Business Process Improvement to Extend Opportunities
  • Small and Mid-Size Businesses (SMBs): Expanding Clientele
  • Novel Opportunities for BPO in New Business Areas
  • An Insight into Major Horizontal Segments
  • Customer Services BPO: Largest Product Category
  • Human Resources BPO (HRO) Remains a High-Profile Segment
  • Finance and Accounting BPO (FAO): A Thriving Market
  • Knowledge Process Outsourcing (KPO): A Small yet Growing Market
  • Procurement BPO: An Overview
  • Review of Select End-Use Markets
  • Manufacturing: Noteworthy End-Use Sector
  • COVID-19 Impact on Manufacturing Sector to Curtail Short-Term Prospects for BPO Services
  • Telecommunications & Technology
  • Banking, Insurance & Finance Services
  • Banking Sector
  • Insurance
  • Retail Sector
  • Other End-Use Sectors
  • Issues & Challenges
  • Protectionist Policies Niggle Offshore BPOs
  • Uncertainties in Politico-Economic Policies Challenge BPO Sector
  • Re-shoring Strategies Highlight Salary Disparities in Different Regions
  • Alternate Offshore Locations Challenge Dominance of Traditional Centers
  • Data Security Issues
4. GLOBAL MARKET PERSPECTIVE

III. MARKET ANALYSIS
  • UNITED STATES
  • The United States: Prime BPO Market
  • Exhibit 6: Percentage (%) Share of the US in the World BPO Revenues (2020E & 2027P)
  • Outsourcing Strategy Evolution in the US - A Review
  • American Enterprises Rely on Offshoring to Save Costs
  • Nearshore Strategy Gains Strength
  • A Review of BPO in Key Application Segments
  • Win-Win for US Outsourcing Companies
  • Indian BPOs Set Up Onshore Service Centers in US
  • Impact of Protectionist Policies
  • CANADA
  • HR Outsourcing: On an Upswing
  • JAPAN
  • CHINA
  • Market Overview
  • Emphasis on ‘China-to-China’ Outsourcing
  • Back Office Outsourcing
  • HR Outsourcing in China
  • EUROPE
  • BPO Sector in Europe - An Overview
  • Trends & Opportunities
  • FRANCE
  • GERMANY
  • Germany - A Key Consumer of BPO & SSC Services
  • ITALY
  • UNITED KINGDOM
  • Major BPO Destination in Europe
  • Competitive Landscape
  • Exhibit 7: Leading Players in UK BPO Services Market (2019E): Percentage Breakdown of Market Share
  • Domestic Vendors Eye Overseas Markets
  • SPAIN
  • RUSSIA
  • Market Overview
  • REST OF EUROPE
  • Central & Eastern Europe (CEE) Emerges as Outsourcing Hub
  • Focus on Nordic Region Outsourcing Market - A Complementary Review
  • ASIA-PACIFIC
  • Asia-Pacific - The Rapidly Growing BPO Market
  • AUSTRALIA
  • Brief Market Overview
  • INDIA
  • India’s Formidable BPO Industry Leads the Way
  • Outsourcers from India Set to Gain from Consolidation of Technology Engagements by Clients amidst COVID-19 Crisis
  • Vast Pool of Skilled Workforce, Low Cost Operations & Overall Competencies Steer Indian BPO Sector
  • The Changing Role of Indian BPOs
  • Role of Captive BPOs
  • BPO Industry Focuses on Inorganic Growth Strategy
  • KPO Industry Gains Efficiency
  • Reverse Outsourcing: New Trend in Outsourcing
  • Financial Services Market - A Vital BPO Vertical
  • HR Outsourcing in India
  • Rural BPO Concept Strengthens
  • SMEs: Potential for Growth
  • Tier-II and Tier III Cities to Gain Prominence
  • Long Term Prospects Remain Favorable
  • Challenges Confronting Indian BPO Industry
  • The Dampeners
  • BPO Vendor Landscape in India
  • India Centric BPO Providers - Breakdown by Vertical Industry
  • India-Centric BPO Providers: Breakdown by Product/Service Offerings
  • SOUTH KOREA
  • REST OF ASIA-PACIFIC
  • Malaysia
  • Philippines - A Favorable Destination for BPO Sector
  • Key Factors Responsible for Philippines’ Success in BPO Sector
  • Demand for Value-Added Services Drives Development of KPO
  • Exhibit 8: Philippines BPO Industry by End-Use Sector (2020E): Percentage Breakdown of Revenues for Call Center, IT, Transcription, and Others
  • Challenges for the BPO Industry
  • Next Wave Cities to Spur Growth Post COVID-19 Downturn
  • Progressive Forecasts for Philippine BPO Sector
  • Singapore
  • Sri Lanka
  • Thailand
  • Vietnam
  • LATIN AMERICA
  • Attractive Outsourcing Destination
  • Market Snapshots
  • BPO Industry Shift Up the Value Chain
  • ARGENTINA
  • Brief Overview
  • BRAZIL
  • A Favored Nearshoring Destination
  • Increasing Demand for Contact Center Outsourcing
  • MEXICO
  • Market Overview
  • REST OF LATIN AMERICA
  • Chile
  • Colombia
  • Costa Rica
  • Peru
  • Uruguay
  • MIDDLE EAST
  • IRAN
  • ISRAEL
  • SAUDI ARABIA
  • UNITED ARAB EMIRATES
  • REST OF MIDDLE EAST
  • AFRICA
  • Market Overview
  • Egypt: An Emerging Market
  • Kenyan BPO Sector
  • South Africa
  • Tanzania: An Emerging Outsourcing Destination in East Africa
IV. COMPETITION
  • Total Companies Profiled: 206
Note: Product cover images may vary from those shown
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