Business process outsourcing (BPO) has become a crucial aspect of today's business landscape. BPO refers to outsourcing non-primary in-house processes, such as call center or back office services, to a third-party service provider at a lower cost. It enables companies to focus on their core competencies and streamline operations rather than the facilities and human resource management involved in on-site staff. This results in improved efficiency and cost savings. In a rapidly evolving business environment, BPO plays a vital role in enabling companies to stay competitive and achieve their goals.
In the past, BPO was seen as limited to call centers and back office support services, but it has now expanded to healthcare technology, banking/fintech, gaming/software, aviation, hospitality and tourism, logistics, retail and manufacturing, academia, government contracting, and so much more.
The BPO sector has absolutely been growing in recent years, driven by factors such as increasing demand for efficient services, lower operating costs, advancements in technology, and the incredible progress made toward digital transformation.
The increased use of automation and technology has enabled BPO companies to streamline processes, improve quality and reduce costs. The growth in cloud-based services allows for more flexible and scalable delivery of BPO services. The expansion of BPO services to new industries and regions has resulted in greater market penetration and diversification. The rising demand for specialized BPO services, such as data analysis and cybersecurity, reflects the growing need for businesses to stay ahead of the competition in an increasingly digital world.
Another reason companies are choosing to outsource more and more work is based on lessons learned during COVID-19. The pandemic fueled a tremendous spike in BPO companies’ annual growth rates. As lockdowns and public health concerns created massive staffing shortages in companies’ customer service and back office areas, the BPO market exploded. The ability to outsource services to BPO industry providers meant businesses could maintain excellent customer experiences while focusing on other areas of their business.
According to a Statista report, the BPO industry was projected to reach $0.33 trillion U.S. dollars in 2022. This included a compound annual growth rate (CAGR) of 6.69%, which could produce a market volume of $0.45 trillion dollars by 2027. So, yes, it’s safe to say that the BPO industry is one that many are gearing up to take part in.
The BPO industry is poised to see extensive market growth for several factors this year. Here are our predictions for BPO trends in 2023 and why they will be relevant for many businesses... likely including your own.
With the COVID-19 pandemic driving a shift towards remote work, there has been an increased demand for virtual assistants and remote workers in the BPO industry. This trend is expected to continue as companies look for cost-effective solutions that offer the same level of productivity and quality as traditional on-site arrangements. By leveraging enhanced point-to-point data security, cloud computing, and virtual private networking (VPN) connectivity, qualified individuals are able to work remotely as data entry specialists, call center reps, app developers, graphic designers, and other easily outsourced roles.
Small businesses and startups are becoming major clients for BPO services as they seek to reduce costs, improve efficiency, and stay ahead of the competition. BPO providers offer a wide range of services, from basic administrative tasks to complex processes such as data analysis and cybersecurity, making them a valuable resource for small businesses and startups looking to grow and scale. This trend is expected to continue as more and more small businesses and startups embrace outsourcing as a strategic tool for success.
BPO providers are forming partnerships with other businesses, government organizations, academic institutions, and healthcare organizations to offer integrated and specialized services, enhance their capabilities, and expand their reach. These strategic partnerships allow BPO providers to offer more comprehensive and innovative solutions to their clients, stay ahead of the competition, develop new supply chain options, and drive growth and success in the industry.
Also, based on our own experience, BPO providers are realizing the importance of English fluency, are seeking assessment services to ensure their agents meet or exceed language standards in reading, speaking, writing, listening, language use, and more.
BPO companies are leveraging omnichannel communication solutions to offer a seamless customer experience across multiple touchpoints, such as chat, voice, email, and social media. AI is being used to automate repetitive tasks, enhance decision-making, and improve customer service. These advancements are enabling BPO providers to better meet the needs of their clients and stay ahead of the competition. Market research shows that today’s customers want to be able to reach you anytime, through any method. Omnichannel solutions integrate telephone, text messaging, online chat, social media monitoring, and digital messaging.
BPO leaders are investing in adapting technology, such as robotic process automation (RPA) and artificial intelligence (AI), to automate repetitive and time-consuming tasks, improve efficiency, and reduce costs. By automating processes, BPO providers free up their workforce to focus on more value-added activities and provide higher-quality services to their clients. This trend is expected to continue as BPO providers look to leverage technology to drive growth and success in the industry.
Through their digital transformation and automation journeys, companies can enable better customer service, ensure compliance with regulations and standards, increase process creation speed and data processing, and enable employees to be more productive.
In addition, many BPO companies are hiring a new C-Suite executive, the “Chief Automation Officer,” to oversee a provider's AI or RPA systems. This involves a methodical search strategy, comprehensive candidate vetting, and third-party review.
The increased collection and usage of big data and analytics are driving innovation and improving decision-making in the industry. BPO providers are collecting and analyzing large amounts of data to gain insights into customer behavior, market research, and operational performance. By leveraging these insights, BPO providers can make more informed decisions, improve their offerings, and drive growth and success in the industry.
The trend towards data-driven decision-making is expected to continue as BPO providers look to stay ahead of the competition and better meet the needs of their clients.
There is a growing emphasis on sustainability and social responsibility in the BPO industry as companies look to reduce their environmental impact and improve their reputation. In many places around the world, BPO providers are implementing sustainable practices, such as reducing energy consumption, recycling waste, and using environmentally-friendly products. They also prioritize social responsibility by promoting diversity, supporting local communities, and ensuring ethical labor practices consistent with the cultural traditions of their location. If your business takes social responsibility seriously, it is becoming easier than ever to find a partner that shares your priorities.
The continued growth of top business processing outsourcing destinations, such as the Asia Pacific region (top examples including India and the Philippines), nearshoring (Mexico and Columbia), and Eastern Europe, reflects the ongoing demand for BPO services in these regions. These countries offer a favorable combination of low costs, skilled workforce, and favorable business environments, making them attractive destinations for BPO providers and clients alike. The trend toward growth in top BPO destinations is expected to continue as more and more companies look to take advantage of the benefits offered by these regions. Offshoring to the Philippines or outsourcing to India can help a company scale with significant cost savings due to lower call center and BPO pricing in those countries. Be sure to check out our post on Onshoring vs. Offshoring when considering BPO destination partners.
With the evolution of the BPO market over the past few years, utilizing these services is now considered an excellent strategy for businesses of all sizes, from small startups to complex corporations.
TDSGS is one of the original pioneering companies helping businesses find their ideal outsourced partner. Because of their decades of expertise, TDSGS knows exactly how to find the best-fit outsourced partner from our network of BPO centers across the United States, Latin America, Asia Pacific, and US Nearshore locations. Businesses who want to leverage business process outsourcing services to improve their business and streamline business operations should contact TDSGS for a free consultation today.
Our custom-built solutions are specially designed to meet your business objectives, connecting you with the right provider for your needs. Connect with us today, and find out how we can drive your business to new heights.
