Globalization and Continued Focus on Cost Rationalization Drives the Business Process Outsourcing (BPO) Market, According to New Report by Global Industry Analysts, Inc.

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GIA announces the release of a comprehensive global report on Business Process Outsourcing (BPO) markets. The global market for Business Process Outsourcing (BPO) is projected to surpass US$322 billion by the year 2018, driven by the growing need among businesses to reduce costs, improve customer services, enhance competitive capabilities, and accelerate speed to market. New segments, such as collections business in mortgages and document review functions in legal outsourcing, and emerging verticals such as healthcare, retail and utility, are expected to fuel market growth.

Business Process Outsourcing (BPO): A Global Strategic Business Report

Follow us on LinkedIn – Business Process Outsourcing or BPO is among the fastest growing sectors of the overall IT Services/Outsourcing industry. Rapid increase in the size and scope of the BPO industry is attributed to the growing desire of global businesses to rationalize costs and address issues such as shortage of skilled personnel. Globalization and technological advancements are stimulants for the global outsourcing industry. The two factors have played a critical role in lowering overall costs by shifting business processes towards platforms, wherein the talent pool is large and labor costs are less. Globalization has also led to the emergence of developing countries as the new growth centers of the present and the future. Though the US and UK have traditionally generated maximum revenues for the BPO Industry, the scenario is changing with BPO service providers focused on exploring opportunities in the emerging markets of Asia-Pacific, Europe, Australia, and the Middle East. Such a strategy allows service providers to lower risk associated with dependence on a single geographic market. As a result, BPO vendors are focusing efforts on de-risking business operations by diversifying client base into newer destinations. On the other hand, several BPO providers managed to acquire all-round capabilities, enabling them to operate facilities at multiple locations across the world.

Following the frenetic pace of growth for over a decade, the BPO industry faced tough times due to the global economic downturn. The impact of recession on the outsourcing industry was seen in the form of slower growth rate, although the pace picked up in the year 2010. Contract restructurings dominated the industry deals, whereby the emphasis was on extending existing contractual partnerships, albeit at renegotiated terms and rates. The recession led to a marked shift away from traditional markets of the US and UK, thereby creating a geographically diverse marketplace. Currently, the sovereign debt crisis in Europe is driving investors to become risk averse again. Europe continues to face troubled times in view of the slowdown in GDP growth and large welfare budgets, further complicated by stringent opposition to measures being undertaken to curb entitlements. However, the volatile conditions are resulting in increasing interest among the European companies, particularly in continental Europe and the UK towards outsourcing.

With no respite foreseen from the uncertain economic environment, the boardroom focus has now turned towards increasing organization competitiveness and looking beyond its limits. Unlike the prior recessionary period when most companies held back on their business projects and postponed long-term plans, today organizations are focusing on cost-tightening measures and improving the efficiency scale. With cost rationalization emerging as a pivotal strategy for corporates to protect profits and sustain operations in times of uncertain economic environment, outsourcing plans have gained traction as companies look to transfer cost base from fixed towards variable. As global businesses continue to place emphasis on controlling costs in order to ensure competitiveness, BPO is emerging as a strategic solution to divert investments from non-core processes towards core activities thereby improving efficiency, lowering costs and ensuring global flexibility.

As stated by the new market research report on Business Process Outsourcing (BPO), the United States represents the largest regional market. Asia-Pacific represents the fastest growing market for BPO Services. Rising awareness among businesses about the potential benefits offered by BPO services is a major driving factor. The region benefits from the robust growth of Indian and Chinese markets, which are the leading buyers of onshore BPO services. In addition, lucrative opportunities are in store across countries such as South Korea, Hong Kong, Philippines, Malaysia, Vietnam, and Taiwan.

Among the various service segments, Customer Services constitutes the largest BPO segment. Growth would also be driven by human resource outsourcing, and billing and supply management services. In the Finance & Accounting segment, complex processes such as external reporting, budgeting, accounting, planning, and forecasting continue to be outsourced due to the growing standardization of these functions. The BPO and IT industries are taking note of changing market conditions, and are actively pursuing changes in their service mix. With buyer demands taking a new turn, these companies are looking to expand their services portfolio with knowledge process outsourcing (KPO) emerging on the top of their agenda. Banking, Insurance & Finance Services represents the largest end-use segment in the global BPO industry. In the post recession period, banking industry is expected to witness massive changes due to increased regulations. As a result, the trend towards outsourcing of processes such as cash management, custody, and treasury is expected to gain strength.

The global BPO market involves the participation of large diversified offshore companies with BPO functions as well as pure play BPO companies. Most of the larger offshoring companies with BPO units have the ability to offer BPO services by combining their IT functions and large workforce. On the other hand, pure play BPO companies are entities focused on specific areas, and generally lack broad-based IT capabilities. The industry also involves the participation of numerous small-scale knowledge-based specialists who operate in niche market segments.

Major players profiled in the report include Accenture Plc, Automatic Data Processing Inc., Xerox, Aon Hewitt, Capgemini, Capita Plc, Ceridian Corporation, CGI Group Inc., Cognizant, Computer Sciences Corporation, Dell Services, EXLService Holding Inc., Genpact Limited, HP Enterprise Services, Infosys BPO Ltd., Intelligroup Inc., IBM Corporation, KARVY Global Services Limited, Keane Inc., NorthgateArinso, Procurian Inc., Randstad Holding n.v., Serco Group Plc, StarTek Inc., Steria, Syntel Inc., Tata Consultancy Services Limited, TriNet Group Inc., Wipro Limited, and WNS (Holdings) Limited, among others.

The research report titled "Business Process Outsourcing (BPO): A Global Strategic Business Report" announced by Global Industry Analysts, Inc., provides a comprehensive review of trends, issues, strategic industry activities, and profiles of major companies worldwide. The report provides market estimates and projections for geographic markets including the US, Canada, Europe (France, Germany, Italy, UK, and Rest of Europe), Asia-Pacific, and Rest of World. Horizontal segments analyzed include Finance & Accounting, Customer Services, Human Resources Outsourcing, Knowledge Process Outsourcing, and Procurement Outsourcing. Key end-use verticals analyzed include Manufacturing; Telecommunications & Technology; Banking, Insurance & Finance Services; Retail; and Others.

For more details about this comprehensive market research report, please visit –

About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.

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