The healthcare industry will encounter an upsurge in costs, boosting demand for industry services.
New York, NY (PRWEB) April 14, 2014
Business Process Outsourcing (BPO) is a form of subcontracting that involves the delegation of specific business functions to third-party service providers. “It is the process of hiring another company to handle certain business activities in order to achieve maximum savings, increased efficiency and a greater return on investment,” according to IBISWorld Industry Analyst Stephen Morea. BPO services is distinct from information technology (IT) outsourcing, which hires a third party business to conduct IT- related activities, such as application management and data center operations. Moreover, BPO is often divided into two main categories: back office outsourcing, which includes internal business functions such as billing or purchasing, and front office outsourcing, which includes customer-related services like marketing or tech support.
The Business Process Outsourcing Services industry fared well over the five years to 2014, supported by an improving overall economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors, which provide a large portion of BPO business. “Additionally, rising wages and increased operating costs associated with the passage of Patient Protection and Affordable Care Act (PPACA) helped drive employers to BPO companies as a method of cost control,” says Morea. As a result, in the five years through 2014, BPO Services industry revenue is expected to increase at an annualized 4.1% to reach $127.4 billion and includes a 4.5% increase in 2014 alone.
In the next five years, wages will continue to rise with federal legislation presently in the pipeline to increase the federal minimum wage to $10.10 per hour. Also, the healthcare industry will encounter an upsurge in costs due to the burgeoning number of new individuals slated to receive health insurance. In response, companies will continue to pursue outsourcing to reduce personnel expenditures and offset escalating back office costs.
For more information, visit IBISWorld’s Business Process Outsourcing Services in the US industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry provide third-party outsourcing services on a contract basis. Clients can outsource specific operations and business functions, including both back and front office tasks, to companies this in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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