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

  • ID: 347963
  • Report
  • July 2020
  • Region: Global
  • 471 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.

The global analysis and forecast periods covered within the report are 2020-2027 (Current & Future Analysis) and 2012-2019 (Historic Review). Research estimates are provided for 2020, while research projections cover the period 2021-2027.
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I. INTRODUCTION, METHODOLOGY & REPORT SCOPE

II. EXECUTIVE SUMMARY

1. MARKET OVERVIEW

Recent Market Activity

Business Process Outsourcing (BPO) - An Introductory Prelude

Established Role in Business Process ImplementationAcross Diverse Sectors: Cornerstone for Present & Future Growth

BPO - A Robust Tool for Enabling Global Expansion

For Creating Truly Global Products

To Drive Satisfaction Levels Among Customers Worldwide

Wider Awareness About Outsourcing Benefits Maintains Growth Momentum

Bright Prospects Ahead for BPO Sector

The Changing Scenario

Disruptive Forces Line the Future BPO Model

A Sneak Peak into Key Trends Characterizing the BPO Industry

Developed Regions - Primary Revenue Contributors

Developing Regions: Hot Spots for Future Growth

The Asian BPO Phenomenon: Enabled by 'Triple Convergence'

BPO Operations Bringing Appreciation to Eastern Countries

Latin America Emerges as a Global Delivery Location

BPO Industry to Gain from Prevailing Economic Scenario

Global Competitor Market Shares

Business Process Outsourcing (BPO) Competitor Market Share Scenario Worldwide (in %): 2020 & 2029

Impact of Covid-19 and a Looming Global Recession

2. FOCUS ON SELECT PLAYERS

Accenture Plc (Ireland)

Alight Solutions LLC (USA)

Atos SE (France)

Automatic Data Processing, Inc. (USA)

Capgemini SE (France)

Capita Plc (UK)

Ceridian HCM, Inc. (USA)

CGI Group, Inc. (Canada)

Cognizant Technology Solutions Corporation (USA)

DXC Technology Co. (USA)

EXLService Holdings, Inc. (USA)

Genpact Limited (India)

Infosys BPM Limited (India)

International Business Machines Corp. (USA)

KARVY Global Services Limited (India)

NGA Human Resources (UK)

NTT DATA, Inc. (USA)

Randstad Holding NV (The Netherlands)

Sopra Steria Group (France)

StarTek, Inc. (USA)

Tata Consultancy Services Limited (India)

TriNet Group, Inc. (USA)

Wipro Limited (India)

WNS Global Services Ltd. (India)

3. MARKET TRENDS & DRIVERS

Advanced Technologies Strengthen Capabilities of BPO Model

Big Data Revolution to Streamline Operations

Internet of Things (IoT) for Effective Delivery of BPO Services

Robotic Automation Makes In Roads into BPO Industry

Impact of RPA on the BPO Sector

Social Media Networking Trend Transforms Business Strategies

Growing Popularity of Cloud Computing

Migration to SaaS and Private Cloud to GainMomentum

Growing Use of Mobile Based Customer Service Applications

Voice Biometrics – Growing Role in Customer Verification

BPO Providers Warm up to Green Computing

Strategic Innovations Gain Centerstage in BPO Industry

Evolving Outsourcing Relationships

Consultative BPO

Predictive Models to Improve Processes

Simpler Processes to Take Customer Contact Flows to New Levels

Flexible and Agile Customer Care Solutions for Unpredictable Issues

Strategic Partners in High Demand

Growing Significance of Value Addition

Focus on Altering Delivery Models

Emphasis on Non-Linear Processes

Sourcing Strategy: Means to Achieve Business Process

Sole Sourcing - A Model for Increasing Operational Efficiency

Multi-Source Approach: Gains Strength

Benefits of Multi-Sourcing Approach

Challenges Facing Multi-Sourcing Strategy

Offshore BPO: Driving Cost-Effectiveness

Nearshoring Finds Favor among Businesses

Trade-off between Quality and Cost Warrants Revamp of the Global BPO Industry

Outsourcing: More a Win-Win than a Zero-Sum Game

Small and Mid-Size Companies - An Expanding Clientele

Focus on Business Process Improvement Gains Momentum

New Business Areas Make Gains

Industry-Specific BPO Services Continue to Gain Strength

'Industry Expertise' Becomes a' Must-Have' for Service Providers

MSM Model to Boost Client-Vendor Relationships

Rise of Bundled IT & BPO Deals

BPO: Heading towards Commoditization?

The Importance of Impact Sourcing

A Brief Sketch of Major Outsourcing Destinations

Issues & Challenges

Protectionism - Implications for 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

BPO - A Robust Tool for Enabling Global Expansion

4. GLOBAL MARKET PERSPECTIVE

III. MARKET ANALYSIS

GEOGRAPHIC MARKET ANALYSIS

UNITED STATES

Market Facts & Figures

US Business Process Outsourcing (BPO) Market Share (in %) by Company: 2020 & 2025

Market Analytics

CANADA

JAPAN

CHINA

EUROPE

Market Facts & Figures

European Business Process Outsourcing (BPO) Market: Competitor Market Share Scenario (in %) for 2020 & 2025

Market Analytics

FRANCE

GERMANY

ITALY

UNITED KINGDOM

SPAIN

RUSSIA

REST OF EUROPE

ASIA-PACIFIC

AUSTRALIA

INDIA

SOUTH KOREA

REST OF ASIA-PACIFIC

LATIN AMERICA

ARGENTINA

BRAZIL

MEXICO

REST OF LATIN AMERICA

MIDDLE EAST

IRAN

ISRAEL

SAUDI ARABIA

UNITED ARAB EMIRATES

REST OF MIDDLE EAST

AFRICA

IV. COMPETITION

Total Companies Profiled: 222

Note: Product cover images may vary from those shown
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