Cut-throat competition coupled with rising demand for convenient consumer complaint redressal is set to propel the business process outsourcing (BPO) market. Organizations are increasingly looking for specialized companies that provide the much-needed support services to business processes without the direct investment of dedicated time and human resources. With the rapid increase in new entrants across industry verticals, the global business process outsourcing market will grow nearly double the rate during the forecast period.
Resultant benefits such as reduced operational costs, improved efficiency of support functions such as customer services is driving growth within this industry. Facilitated by enhanced inter-connectivity of businesses, BPO has amassed C-suite confidence to deliver relevant, reliable, and 24/7 support to essential business processes. The shift of focus from monopolistic business strategies to shared workload business culture is spurring demand for business process outsourcing for improved results and continued success.
Early Adoption From IT & Telecom Sector is Becoming Key for Growth
Early adopter segments such as IT & Telecommunications are at the forefront of BPO practices. IT & Telecommunications account for more than half of of the total market value. Constant advancements in data management technologies such as servers, storage, and virtualization compels IT & Telecommunication companies to outsource their IT infrastructure or processes in order to gain a competitive edge. Industry verticals such as travel, transportation, and government-held companies are buckling up and integrating BPO services. The highest growth potential can be attributed to Banking, Financial Services, and Insurance (BFSI). The segment exhibits a stellar growth rate in the coming years of the forecast period. Retail could be another area of interest for BPO organizations, as retailers drive digitization initiatives to compete with online retailers. The retail segment will grow at an impressive growth in the near coming years.
Information and content, rather than just hardware, is a growing issue in the telecom industry today. Companies recognize that they can’t compete and make a profit as they used to, by selling telecom equipment or telecom service in a relatively controlled environment. They must combine traditional strategy with that of other industries and other technologies
Rising Applications from Multiple End-User Industries
The major operations offered by Business Process Outsourcing (BPO) services include business administration, supply chain management, sales, marketing, and customer care services. The players in the market for business process outsourcing are engaged in providing reliable and cost-effective services across various industries and sectors such as BFSI, manufacturing, retail, IT and Telecommunications, and healthcare. The aforementioned industries comprise a few of the major application areas of business process outsourcing, and companies operating in these verticals prefer to incorporate business process outsourcing are part of their business strategy, in order to allow them to focus on their fundamental business activities and ultimately increase their profitability.
The business activities of an organization are classified into critical activities, core activities, and non-core activities. Core activities are the company’s primary competencies that give the company a strategic advantage. Critical activities require a specialized skill-set. Similarly, non-core activities are supporting activities that largely involve relationship management between consumers and products. Classifying these activities is vital in order to allocate resources appropriately to ensure timely delivery of services. Nowadays, companies have begun to place greater emphasis on core activities with a view to maintain their market presence and expand their customer base, which results in the outsourcing of resources for non-core activities.
Competition in various industries across the globe concerning cost has increased exponentially. The Asia Pacific with its cheap labor and operational cost has disrupted many industries such as semiconductors and chemicals. Business process outsourcing enables the transfer of front office as well as back-office work to a third-party company to eliminate the extra in-house cost. The overall cost to the company can be reduced and companies can prioritize the business significantly. The overall benefits at the macro level is driving the growth of business process outsourcing.
Shambhu Nath Jha, a senior research consultant, with experience close to a decade has helped over 50 large and medium to small business enterprise to foray into new markets, increase footprint in the existing bucket, and understand the nature of the beast. These beasts are the companies that have been primarily engaged in ICT ecosystems, and encountering challenges either in maintain P&L or staying ahead of their competitors. He has authored over 300 industry research papers consisting of critical information such as market growth, total addressable market, serviceable addressable market, market size, forecast, player strategies, market share estimates, and winning imperatives along with recommendations. These insights are based on a report on Business Process Outsourcing (BPO) Market by Fact.MR