Business Process Outsourcing Statistics: An Efficient Way to Manage Services

Tajammul Pangarkar
Tajammul Pangarkar

Updated · Oct 13, 2023

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Introduction

Business Process Outsourcing Statistics: Business Process Outsourcing (BPO) involves companies delegating specific non-core functions to external service providers, typically third-party firms.

These providers specialize in efficiently managing customer service and finance tasks, allowing organizations to lower operational expenses, concentrate on their core strengths, gain access to specialized knowledge, and adapt their operations as required.

BPO encompasses back-office functions like finance and human resources and front-office tasks like customer support and sales.

This worldwide industry has substantially impacted economies, with nations like India and the Philippines emerging as important outsourcing centers, underscoring its importance in today’s business world.

Business Process Outsourcing Statistics

Editor’s Choice

  • The global BPO market is projected to expand at a CAGR of 8.5% from 2023 to 2030.
  • In 2022, the BPO market generated approximately $245.9 billion in revenue.
  • By 2032, the BPO market is forecasted to reach an impressive $544.8 billion, reflecting its continued expansion and importance in the global business landscape.
  • 37% of businesses outsource accounting functions.
  • The Healthcare BPO market is on the brink of substantial expansion, with an expected projected value of approximately $908 billion by 2032.
  • In 2021, 80% of small businesses intended to contract out services.
  • The US has the highest percentage of outsourced jobs globally, with almost 68% of companies delegating their services.
  • Over 40% of support desk jobs in banking and finance are outsourced.
  • Among organizations that utilize BPOs for application hosting, 65% intend to boost their investment in outsourcing.
  • While BPO offers numerous benefits, there are also challenges associated with it, such as data security risks, communication barriers, and cultural differences.

Global BPO Market Size

  • The Business Process Outsourcing (BPO) market has exhibited robust growth in recent years at a CAGR of 8.5%, with its revenue steadily climbing.
  • In 2022, the BPO market generated approximately $245.9 billion in revenue.
  • Building on this momentum, the market continued to expand in 2023, reaching $266.8 billion.
  • Projections for the coming years indicate a sustained upward trajectory, with anticipated revenues of $286.5 billion in 2024 and $317.3 billion in 2025.
  • The growth trend appears to accelerate further, with the BPO market expected to surpass the $350 billion mark in 2026, specifically $347.8 billion.
  • Over the following years, the industry is forecasted to maintain its upward trajectory, crossing $373.5 billion in 2027 and $393.1 billion in 2028.
  • As we move into the late 2020s, the BPO market is poised to exceed $400 billion, with expected revenues of $426.5 billion in 2029.
  • Looking ahead to 2030, the market is projected to reach $458.5 billion, with an even more substantial growth rate predicted for 2031 when revenues are expected to soar to $497.0 billion.
  • By 2032, the BPO market is forecasted to reach an impressive $544.8 billion, reflecting its continued expansion and importance in the global business landscape.

(Source: Market.us)

business process outsourcing market

Outsourced Business Processes

  • 37% of businesses outsource accounting functions.
  • IT services are the most outsourced, making up 37% of all outsourced operations.
  • Digital marketing accounts for 34% of outsourced tasks.
  • Lead generation and cold calling are frequently outsourced.
  • 28% outsource company development to save money.
  • The top five outsourced processes are legal functions (64%), tax (61%), HR (57%), finance (51%), and manufacturing and supply chain procurement (48%).
  • IT functions like cybersecurity, app/software development, and data analytics are widely outsourced.
  • In 2023, small businesses will seek outsourcing providers in marketing (27%), IT services (22%), and design (21%).

(Source: Clutch)

business process outsourcing statistics

Regional Variations in BPO Market Growth

Business Process Outsourcing Statistics by Asia Pacific Region

  • The Asia Pacific region is one of the globe’s major BPO markets, expecting a steady 9.5% Compound Annual Growth Rate (CAGR) between 2021 and 2026. The rising need for economical outsourcing options predominantly propels this growth.
  • India, the Philippines, and China take the lead as this region’s primary BPO service providers.
  • The Business Process Outsourcing (BPO) sector has experienced substantial revenue generation in several key Asian countries.
  • India, known for its prowess in BPO services, contributed significantly with a substantial revenue of $38.9 billion.
  • Following closely behind, the Philippines made a noteworthy contribution of $26.3 billion, showcasing its robust BPO industry.
  • Meanwhile, China, another major player in the field, generated $10.2 billion in revenue. Collectively, these three nations dominated the BPO landscape in the region.
  • Other countries within the region also contributed $4.6 billion to the industry.
  • The Asia Pacific region amassed an impressive $80 billion BPO revenue, underscoring its pivotal role in global outsourcing.

(Source: Statista)

Business Process Outsourcing Statistics

Business Process Outsourcing Statistics By North America Region

  • North America is the world’s second-largest BPO market, following Asia Pacific.
  • Between 2021 and 2026, the region’s BPO industry is anticipated to experience a steady growth rate of 8.5%.
  • Leading the charge in BPO services within North America are the United States and Canada.
  • The North American region boasts a significant presence in the Business Process Outsourcing (BPO) sector, with a total revenue of $36.9 billion.
  • The United States, as a key player in the industry, contributed substantially, with BPO revenue amounting to $34.2 billion.
  • Canada also played a role in the North American BPO landscape, though on a smaller scale, contributing $2.7 billion to the overall revenue.
  • These two countries demonstrate North America’s influence in the global BPO market, highlighting their combined revenue.

(Source: Statista)

Business Process Outsourcing Statistics By Europe Region

  • Europe holds substantial importance in the Business Process Outsourcing (BPO) arena, and the United Kingdom, Germany, and France are at the forefront of this sector.
  • Projections indicate that the BPO industry in Europe is poised for growth, with an expected Compound Annual Growth Rate (CAGR) of 7.8% from 2021 to 2026.
  • The United Kingdom stands out with BPO revenue of $11.8 billion, closely followed by Germany at $9.1 billion and France contributing $5.5 billion.
  • Additionally, several other European countries have made their mark in the BPO sector, amassing a combined revenue of $5.6 billion.
  • The European BPO industry has reached an impressive revenue figure of $32 billion, showcasing its prominence in the global outsourcing landscape.

(Source: Statista)

Rest of the World

  • Rest of the World (RoW) includes regions such as Latin America, the Middle East, and Africa.
  • The BPO industry in RoW is expected to grow at a CAGR of 10.2% from 2021 to 2026.
  • In Latin America, the BPO sector has generated a noteworthy revenue of $12.1 billion, while the Middle East & Africa have contributed a significant $4.5 billion.
  • These two regions have added to a total BPO revenue of $16.6 billion, highlighting their growing presence and role in the worldwide outsourcing market.

(Source: Statista)

BPO Statistics According to Industry Verticals

BPO in Healthcare

  • The Healthcare BPO market is on the brink of substantial expansion, with an expected projected value of approximately $908 billion by 2032.
  • This marks a significant upswing from its 2022 valuation of $362 billion, driven by an impressive Compound Annual Growth Rate (CAGR) of 9.9% anticipated from 2023 to 2032.
  • In the arena of payer services, the claim management service segment has firmly established itself as the frontrunner, showcasing exceptional growth with the highest CAGR between 2023 and 2032.
  • In Pharmaceutical Services, all eyes are on the research and development segment, poised for significant expansion in the forecasted period.
  • In 2022, North America reaffirmed its position as the dominant force, securing the lion’s share of the revenue pie, accounting for 47%.
  • Meanwhile, Europe maintained a robust presence, boasting a respectable 25% revenue share in the same year.
  • In contrast, the Asia-Pacific region takes the spotlight, primed for the swiftest CAGR growth between 2023 and 2032.

(Source: Market.us)

BPO in Information Technology (IT)

  • In 2023, the expected average expenditure per employee on IT outsourcing will be $135.25.
  • The United States is set to make the most substantial contribution to the market’s revenue, estimated at $167.26 billion for the same year.
  • The primary segments within the IT outsourcing market, namely web hosting, software development outsourcing, and administration outsourcing, collectively account for 63.5% of the total market value.
  • Furthermore, over 75% of executives have expressed their intention to engage in IT service outsourcing, with the top three areas of interest being IT infrastructure services, application and software development, and cybersecurity.
  • Looking back at the previous year, 67% of executives reported an increase in budget allocation for Operated Services, 57% indicated a budget increase for Managed Services, and 32% observed a budget increase for traditional outsourcing.
  • Organizations are directing more financial resources toward Information Technology outsourcing services.

(Source: Radixweb)

BPO in Finance and Accounting

  • In 2021, 80% of small businesses intended to contract out services.
  • According to the 2019 A.T. Kearney’s Global Services Location Index (GSLI), a measure of a nation’s capability and suitability to provide business services to international firms, Vietnam secured a place among the top five global outsourcing destinations.
  • Vietnam’s financial appeal was on par with India’s, scoring 2.82 points on the attractiveness scale.
  • Moreover, regarding skills and workforce availability, Vietnam outperformed Malaysia and Thailand, while its business environment was considered more enticing than India and Indonesia.
  • As per a Statista survey, 55% of respondents in Latin America currently outsource their back-office processes, while only 2% plan to do so in the next year, with a slightly higher 6% considering long-term outsourcing.
  • North America follows with 22% currently outsourcing and similar percentages of 2% and 6% planning outsourcing in the short and long term, respectively.
  • In the European Union (EU), 17% currently outsource, with 1% looking to outsource in the coming year and 4% contemplating long-term outsourcing.
  • Developed Asia-Pacific (APAC) has 15% currently outsourcing, none planning to do so in the next 12 months, and 5% considering long-term outsourcing.
  • Emerging APAC currently has 13% outsourcing, 3% planning in the short term, and 8% in the long term.
  • Africa stands at 9% currently outsourcing, 3% planning within the year, and 13% looking at long-term outsourcing.
  • On a global scale, 19% are outsourcing, with 6% planning in the next 12 months and only 2% considering long-term outsourcing.

(Source: Innovatureinc, Statista)

BPO in Human Resources

  • Over 40% of support desk jobs in banking and finance are outsourced.
  • 24% of businesses outsource HR and customer service to focus on core operations.
  • Accounting is the second most outsourced area, with 37% of organizations outsourcing accounting procedures.

(Source: Deloitte-2021, Fortunly-2021, Clutch-2019)

BPO in Customer Services

  • The customer services industry is one of the most significant users of BPO services. Outsourcing customer service processes such as call center operations, technical support, and customer care can help companies reduce costs and improve customer satisfaction.
  • According to Statista, the customer services BPO market size was valued at USD 79.3 billion in 2020.
  • Key players in this industry include Teleperformance, Convergys, and Sitel.

(Source: Statista)

Impact of BPO

  • Africa, the Middle East, and Europe generate the most BPO income globally.
  • India received the most contracts in these regions during 2017-19.
  • Accenture paid $1.7 billion to BPOs in 2017.
  • Manpower Group earned $22 billion in BPO revenue in 2018, with 25% coming from the United States.
  • The Philippines is a popular destination for customer service outsourcing due to a 95% literacy rate.

(Source: Statista, Accenture, Kearney, UNESCO)

Concerns About BPO

  • 68% of businesses face issues when transitioning to cloud infrastructure.
  • 35% of firms are concerned about data exchanged with outsourcing agencies.
  • Despite concerns, 44% of chief intelligence officers are willing to exchange data with outsourcing firms.
  • 22% of executives worry about the negative impact on company culture.

(Source: Customer think, Deloitte-2022)

Future for BPOs

  • Among organizations that utilize BPOs for application hosting, 65% intend to boost their investment in outsourcing.
  • India’s IT BPO sector recorded an impressive revenue of $154 billion during the fiscal year 2017-18.
  • BPO services are employed by 57% of companies as a means to concentrate on their core concerns.
  • Around 54% of businesses enlist the assistance of third-party support staff for managing customer communications.
  • 74% of firms rely on BPO services to fulfill their IT requirements.
  • Regarding operating services, 67% of companies plan to augment their budget.
  • An overwhelming 83% of small businesses plan to maintain or increase their BPO budget in 2023.

(Source: Customer Think, Brandongaille, Statista, Fortunly, Statista, Delloite, Clutch)

Conclusion

Business Process Outsourcing Statistics – The Business Process Outsourcing (BPO) industry has evolved into a dynamic and resilient sector, as the statistics show. It offers cost-efficient solutions while diversifying its service offerings, adapting to technological advancements like automation and AI, and addressing data security and quality control challenges.

BPO not only enhances cost savings but also plays a pivotal role in enhancing customer experiences and is shifting towards strategic partnerships. Looking ahead, BPO is set to continue its transformative journey, providing organizations with the means to innovate, scale, and compete in an increasingly globalized and digital business landscape.

FAQs

What is Business Process Outsourcing (BPO)?

BPO contracts specific business functions or processes to a third-party service provider. These processes range from customer support and data entry to specialized tasks like accounting and IT services.

Why do companies outsource their business processes?

Companies outsource to reduce operational costs, access specialized skills, improve efficiency, focus on core activities, and leverage global talent pools.

What are the common types of BPO services?

Common BPO services include customer support, data entry, finance and accounting, human resources, IT support, and supply chain management.

Where are popular BPO outsourcing destinations?

Popular BPO outsourcing destinations include India, the Philippines, Eastern Europe, Latin America, and Africa, each offering unique advantages such as cost-effectiveness and language skills.

What are the benefits of BPO for businesses?

Benefits of BPO include cost savings, access to skilled resources, scalability, improved service quality, and the ability to focus on core business functions.

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Tajammul Pangarkar

Tajammul Pangarkar

Tajammul Pangarkar is a CMO at Prudour Pvt Ltd. Tajammul longstanding experience in the fields of mobile technology and industry research is often reflected in his insightful body of work. His interest lies in understanding tech trends, dissecting mobile applications, and raising general awareness of technical know-how. He frequently contributes to numerous industry-specific magazines and forums. When he’s not ruminating about various happenings in the tech world, he can usually be found indulging in his next favorite interest - table tennis.

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