Business Process Outsourcing Market Worth $343.2 Billion By 2025
November 2018 |
The global business process outsourcing (BPO) market size is expected to reach USD 343.2 billion by 2025 at a 7.4% CAGR during the forecast period, according to a study conducted by Grand View Research, Inc. Need to reduce operational costs is a key factor anticipated to drive the market. Any additional expense spent on an equipment or business that is not among major competencies of a company is termed as operational costs. An increasing number of companies have been outsourcing these operations, enabling them to focus on core competencies and enhance their business. This results in cost efficiency and effective time as well as resource management.
Furthermore, numerous companies are considering outsourcing as a solution to meet their back office requirements. Increased flexibility, improved service quality, increased productivity, and workload management are some of the additional advantages of outsourcing, which are expected to contribute toward market growth over the next few years.
Rising establishment of call centers and customer service centers in Asia Pacific and North America is also positively affecting market growth. Emergence of next-generation services such as big data analytics, cloud services, and robotic process automation are other factors projected to fuel market growth.
Business process outsourcing is an integral element of the global outsourcing industry. Additionally, BPO is rapidly gaining momentum across an array of verticals such as banking, financial services, and insurance (BFSI), healthcare, manufacturing, IT & telecommunications, retail, and others.
The others segment includes government, education, travel & transportation, construction, and utilities. BFSI is expected to emerge as the fastest-growing segment over the next few years as BPO addresses several challenges faced by the industry. It ensures data management and data integrity. It also offers reliable, relevant, and timely data delivery to improve decision making.
Although the business process outsourcing market is expected to grow considerably over the forecast period, companies exhibit a dependency on external outsourcing service providers. This dependency presents a potential security risk with reference to the integrity and confidentiality of a user’s data. Furthermore, maintaining and preserving the confidentiality and integrity of user’s data is a fundamental concern common for all companies. Moreover, rising budgetary pressures and lack of effective framework to ensure quality of service are some of the key factors hindering market growth.
Partnerships and collaborations is a key strategy among leading players to consolidate their presence in the market. For instance, in October 2014, Capgemini entered into a partnership with NetSuite. NetSuite provides cloud computing solutions worldwide. Through this partnership, Capgemini launched its new virtual company that provides BPO solutions. The various business solutions offered include finance and accounting, human resources, and a host of technology solutions.
Further key findings from the study suggest:
- By service, customer service held over 30.0% of the global BPO market in 2017 due to extensive and widespread establishment of call centers across the world and increasing requirement of technical and maintenance staff across sectors such as IT & telecommunications and healthcare
- The human resources service segment is predicted to exceed a CAGR of 7.0% over the forecast period, on account of increasing need for resources across various sub-segments such as administration, recruitment & relocation, payment processing, and other employee benefit services.
- North America led the global business process outsourcing market in 2017. This can be attributed to rapid proliferation of the IT & telecommunication sectors in U.S. In 2017, this sector held a market share of over 70.0% in U.S.
- Prominent market players include Accenture, Infosys Limited, Wipro, and HCL. These players focus on partnerships and collaborations with the objective of consolidating their market presence.
Grand View Research has segmented the global business process outsourcing market based on service, end use, and region:
Business Process Outsourcing Service Outlook (Revenue, USD Billion, 2014 – 2025)
- Finance & Accounting
- Human Resources
- Knowledge Process Outsourcing
- Procurement & Supply Chain
- Customer Services
Business Process Outsourcing End-Use Outlook (Revenue, USD Billion, 2014 – 2025)
- Banking, Financial Services, and Insurance (BFSI)
- IT & Telecommunication
Business Process Outsourcing Regional Outlook (Revenue, USD Billion, 2014 – 2025)
- North America
- Asia Pacific
- Latin America
- Middle East & Africa
- North America
Disclaimer: This information has been collected through secondary research and Global Multi Solutions is not responsible for any errors in the same.
Events and activation industry in India set for strong growth
15 January 2018
On the back of increased digitisation and marketing expenditure, the Events and Activation (E&A) industry has been growing at a rapid rate, and will continue to do so in the future. A new report from global accounting and advisory firm EY predicts that the industry will surpass the Rs. 10,000 crore mark by 2021.
Digital advancement is changing the face of most industries in the world, as a digitally mature population is exposed to an entirely new world of business. In India, the substantial population is increasingly entering the digital domain, and will continue to do so, estimated to reach 850 million online users by 2025.
Big four professional services firm EY has been monitoring the impact that such a transformation is having on various industries in the country, particularly those which directly operate in the digital domain. In recent months, the firm released a report predicting that the Media and Entertainment industry in India will double in size to Rs. 2.27 lakh crore by 2021.
Now, in a report titled ‘Experience Next,’ the firm has explored the progress of the E&A industry in India. According to the report, the industry has been growing at a compounded annual growth rate (CAGR) of 15% over the last five years, which is expected to increase to 16% in the next few years. By 2021, this CAGR will take the industry from its current value of Rs. 5, 631 crore to more than Rs. 10,000 crore.
Moreover, the report states that these figures represent only the organised events in the country, which comprises 50% of the total industry. In addition, the figures exclude the induced revenues that might be generated from these events, even seemingly direct benefits such as telecast rights of an event.
In essence the report places its focus on the activities of event management companies, members of which were the primary respondents of the survey. The most popular type of events to organise among these firms were ‘managed events,’ being organised by 89% of the firms. However, the popularity of these events appears to have dropped since 2014-2015, when 94% of the firms were engaged in them.
‘Activations’ were the second most popular events, placing in the service list of 70% of the firms. ‘Intellectual property events’, while popular amongst roughly half the firms (48%), have been declining in popularity since 2011, when they were organised by 53% of the firms. The impact of digital over the last few years is striking, as ‘digital events’ were organised by 33% of the firms this year, compared to absolutely none in 2011.
As the revenue from the industry grows over the next five years, the managed events segment has the potential to generate 53% of these revenues. The segment currently accounts for 119 events per firm, representing 56% of all events. Activations had the second highest revenue potential at 22%, generated from 33% of the total events, at 69 events per firm.
Although intellectual property events represent only 2% of the total, with only four events per firm, they appear to have tremendous revenue potential, projected to generate 17% of the industry revenues. Meanwhile, digital events, which have risen to 19 events per firm (9% of the total), have the potential to generate 8% of the industry revenues.
In terms of clientele, the corporate world provides the most business to event firms. Corporates represent 75% of the total clients for the firms, of which 19% were MNCs and 36% were Indian. The government and public sector were the second largest employers, at 11%, while High Network Individuals comprised 9%. Associations constituted the remaining 5% of the clientele.
Commenting on the findings of the report, Ashish Pherwani, Partner at EY India and Leader of the M&E Advisory segment, said; “The Events & Activation industry is growing at a fast pace and is expected to further grow exponentially due to its ability to adapt and grow with innovative technology. With focus on newer avenues such as sports leagues, rural expansion, digital activations, increased Government marketing initiatives etc., we see events industry surpassing overall growth rate of M&E industry.”
Disclaimer: This information has been collected through secondary research and Global Multi Solutions is not responsible for any errors in the same
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