Market research company Technavio has released a new report on the business process outsourcing (BPO) market which projects that it will increase by US$75.89 billion at a compound annual growth rate (CAGR) of 6.5 per cent between 2023 and 2027.

By end-user, the BPO market is segmented into IT and telecommunication, retail, health care, and others. The IT and telecommunication segment accounted for the largest share of the market in 2022 indicates the research source.

By geography, the market is segmented into Asia-Pacific, North America, Europe, South America, and the Middle East and Africa. North America held the largest share of the market in 2022.

Technavio projects that the outsourcing market in BFSI (banking and asset management) is projected to grow by US$31.15 billion with a CAGR of 4.89 per cent during the forecast period 2021 to 2026.

BFSI comprises banking, insurance, and non-banking financial institutions. Besides, financial service companies such as broking and asset management are primarily referred to by the BFSI industry.

The research company notes, “The growing need to comply with regulatory standards is one of the key factors driving the global outsourcing market in BFSI sector market growth.”

Technavio states that the human resource outsourcing market size is expected to increase by US$10.90 billion from 2021 to 2026, at a CAGR of 4.87 per cent. The researchers stated, “The digitisation of human resource outsourcing is one of the key drivers supporting the human resource outsourcing market growth.”

By region, the global business process outsourcing market is segmented into North America, Europe, Asia-Pacific, the Middle East and Africa, and South America. North America is estimated to contribute 40 per cent to the growth of the global market over the forecast period. It was noted, “The strong presence of many top vendors and increasing offshoring of IT services to low-wage countries such as India and the Philippines are driving the growth of the regional market.”

Innovators

Companies marked as innovators in the global market include Accenture Plc whose solutions include finance, supply chain, procurement, human resources, marketing, sales and customer operations, and industry-specific services, such as health, insurance, and banking.

Another is Automatic Data Processing Inc which Technavio says offers solutions for business process outsourcing that lower the expenses for human resources staff, infrastructure, and technology.

Also singled out is Concentrix Corp, which offers solutions for business process outsourcing which determine the CX road map through data-driven insights and design thinking.

Yet another big player is Deloitte Touche Tohmatsu Limited whose solutions include building a business case while designing future operating models, preparing, and planning projects.

Technavio states that the market is driven by the focus on reducing operational costs, the surging number of BPOs, and the increasing adoption of BPOs by IT and telecom service providers. However, it was noted, “data breaches are hindering market growth.”