It is the contracting out of specific needs to external properties by a business process outsourcing organization. BPO activities are included in the following figures, which include both domestic and offshore firms. The global market size of these services has been estimated at 88.9 billion dollars, but this number does not include the informal activities that freelance platforms like Fiverr facilitate.
At least one-third of the American workforce engages in some form of freelance work, with unofficial outsourcing figures sometimes double or even triple those recorded by governments.
It has been found that most BPO activities are actually internal business functions like human resources or front office tasks like customer service that get outsourced to third parties. The global activities within this segment were reported to have generated revenues of around $24.6 billion in 2017.
Stats on the BPO industry that are fascinating
#1. Over the period 2012-2016, the global business process outsourcing industry grew at a rate of 4.4% per annum. Right now in the United States, there are more than 160,000 companies operating in the telecommunications industry. (IBIS World)
#2. 2016 was the first year for the business process outsourcing industry to have revenues of over $140 billion due to the high rate of growth it experienced. There are currently just under 1 million direct jobs being created thanks to business process outsourcing. (IBIS World)
#3. It is the region of Africa, the Middle East, and Europe that has the largest share of global outsourcing revenue. As of 2017, the total amount of contracts awarded to India from this area was $55 billion, and India ranked as the top recipient country during the year. (Statista)
#4. Outsourcing generated 19 billion dollars in revenue for Accenture in 2017, which makes it one of the largest outsourcing firms in the world. It is through this figure that the company managed to gain a net income of more than $4.85 billion over the course of the year. (Statista)
#5. Manpower Group generated $22 billion in revenue globally in 2017, of which about 25% was generated by the Americas segment of the company. (Statista)
#6. Business process outsourcing is currently used by 74% of businesses in order to provide them with information technology for business processes. (Statista)
#7. The percentage of owners of small and medium sized businesses familiar with human resource management solutions, such as WebHR, which are part of the business process outsourcing industry, is about 18%. (Statista)
#8. In order to reduce costs, companies cite outsourcing as one of the most important reasons for embracing the business process outsourcing industry. 57% of companies say this allows them to concentrate their attention on the core aspects of their business. Engaging with the industry presents other benefits such as the ability to resolve capacity issues (47%) and enhance service quality (31%), as well as the ability to access intellectual capital (28%). (Deloitte)
#9. Business process outsourcing continues to grow in popularity as offshore contracts become more common place. Globally, approximately 80% of businesses report that they are satisfied with their relationship with an outsourced service provider. (Deloitte)
#10. Artificial intelligence, machine learning, and the rise of automation have posed a threat to over 1 million jobs in the business process outsourcing industry in the United States, India, Poland, and the Philippines. (AT Kearney)
#11. It is estimated that one new management position will be created to oversee the technology for each four jobs that get lost in the business process outsourcing industry due to automation. (AT Kearney)
#12. Sixteen out of the top twenty offshore call center projects in 2016 were located in the Philippines, the country with the largest English-speaking population in the world. This country’s literacy rate stands at 95% on the island nation. (AT Kearney)
#13. Approximately 54% of all organizations use a third-party support team to help them connect with According to that statistic, the United States outsources 300,000 jobs to other countries everynited States each year. (Fortunly)
#14. Business process outsourcing, which specializes in bringing business processes to the cloud, is a growing industry with a lot of concerns around data security. Sixty eight percent of compaThere are 45% of people who say the service might not be stable or reliable enough for them to use, while 35% report being anxious about losing their intellectual property in the process.ble enough for use, while 35% report anxiety about losing their intellectual property. (Fortunly)
#15. Software application development makes up 64% of the outsourced offshore technology functiMore than half of today’s technology executives say that they outsource maintenance needs to a third-party, and 3 out of 5 say that their data centers are also outsourcing in this way.tion. (Fortunly)
#16. In comparison to 2013, 44% of Chief Intelligence Officers say they are more likely to use providers from the business process outsourcing industry today than they were in 2013. (Fortunly)
#17. Defense and government are the two most important sectors in the Americas that use outsourcing, in fact, they represent 81% of the annual contracting value that is available in the region. (KPMG)
#18. Since the economic collapse that happened in 2008, called center workers in the United States earn just 14% more than their counterparts in this same sector in India as a result of the economic collapse. (The Balance)
#19. It is estimated that 85% of the deals in the business process outsourcing industry are originated in the United States. A second-largest contributor to this statistic is the United Kingdom, which had a 5.2% contribution rate. (KPMG)
#20. As soon as the recession years of 2007-2009 came to an end, only 9% of U.S. companies decided to refrain from using business process outsourcing services. 57% of them have decided to increase their reliance on this service. (Deloitte)
#21. In the business process outsourcing industry, India is the leading recipient of contracts, leading with an index of 7.07 due to the combination of skill and value it brings to the table. China is ranked second with an index of 6.31, while Malaysia is ranked third with an index of 6.11. As for Sri Lanka, the country has the cheapest outsourcing value for BPO, but it is low on skill, as its index is only 3.42 (AT Kearney)
#22. Business Process Outsourcing is an industry that generates an average annualized contract of $32.6 million in 2017. This represents a 53% increase from the previous year. (KPMG)
#23. 65% of the companies who plan to enhance their investments in the business process outsourcing industry for application hosting within the next 12 months say that they intend to invest more in this area. (Computer Economics)
#24. One of the biggest concerns when it comes to BPO outsourcing is the quality of the service that companies receive, which represents 50% of concerns in general. The anxiety experienced by employers due to the inaction of outsourced workers to deal with problems is similar to the anxiety experienced by employers with their own employees. (Credit Donkey)
#25. In spite of all of the advantages that the BPO industry offers, 89 percent of companies say that they would “never” outsource their strategic planning functions to another firm. (Credit Donkey)
#26. Compared to other industries, the banking and financial services industry is known to rely more on business process outsourcing industry services than others. It is estimated that over 40% of the help desk positions in banks, credit unions, and similar institutions are outsourced today. (Credit Donkey)
#27. Compared to businesses that forego outsourcing their payroll processing to BPO industry providers, companies that outsource their management of payroll save an average of 18% more on this need than businesses that do every thing in-house. In fact, when an agency opts to contract multiple functions to a single vendor, then this figure goes up to 32%. (PwC)
#28. An entry-level IT worker in China can expect to earn about $7,000 a year on average. This amount rises to $8,400 when the worker is hired in India. In the United States, someone with the same level of education and experience could earn $45,000 in this position. It is precisely for that reason that the business process outsourcing industry is such a highly attractive prospect for many companies today. (The Balance)
#29. I find it rather surprising that the Ukrainian information technology sector is a hotbed of business process outsourcing activities. There are more than 200,000 people working in this country and that workforce is expected to reach over 200,000 by the end of 2020. The country has the highest number of professionals in Eastern and Central Europe. (Ukraine Digital News)
#30. According to the Indian Government, the BPO industry in the information technology sector generated an overall revenue of $154 billion in 2017. (NASSCOM)
#31. Approximately 40% of India’s workforce involved in the business process outsourcing industry would have to upgrade their skills by 2025 to keep up with trends in emerging technologies. The opportunities for big data, artificial intelligence, and robotics contracts may not seem as plentiful without this improvement. (NASSCOM)
#32. In the Philippines, 34% of outsourcing deals involve contracts that are part of a knowledge process. In turn, this makes it a top destination for highly valuable services such as legal consultation, content production and animation. (EnterPH)
#33. There are 35% of companies enforcing contractual obligations regarding data security and data risk when addressing the cyber risks associated with outsourcing. The majority of companies (34%) say that they evaluate their partnerships on a periodic basis. There is a high expectation that vendors will determine the level of risk available to businesses (18%), and they expect that the provider will determine the level of risk available to the business (8%). (Deloitte)
#34. According to a recent survey, 76% of C-suite professionals indicated that regulations around data privacy and protection have an impact on their disruptive outsourcing decisions. (Deloitte)
#35. Almost 80% of companies plan to change their existing outsourcing processes so that they can take a more structured approach to outsourcing. According to 42% of respondents, they would like to spend more time on RFP in the future, whereas 39% plan to use competitive bidding in the future. (Deloitte)
#36. 8 percent of the agencies that have contracts with business process outsourcing companies do not know whether an audit of their partnership has been completed or if one has even been initiated at all. (Deloitte)
#37. It is estimated that only 2% of organizations with outsourcing initiatives that have been reviewed by a third party auditor, as well as those that have been evaluated by their internal audit teams, completed the process with a failure listed as the outcome. (Deloitte)
#38. Among the concerns executives have when approaching the BPO industry from an RPA point of view, data security is the top concern in 62% of cases. Among the top three anxiety points cited by these organizations are performance and resilience (48%), vendor compliance (42%), IP loss (39%), and the ability to terminate a contract without excessive penalties (38%). (Deloitte)
#39. More than half (62%) of executives surveyed say that one of their primary objectives when adopting RPA is to improve performance. More than half (59%) of respondents said that they wanted the time to market to be improved. On top of these points of emphasis, 55 percent of respondents cited error reduction (53%), 52 percent cited streamlining existing processes (52%), and 51 percent mentioned access to new technology. (Deloitte)
#40. RPA adoption is important from a cost-reducing point of view, but it is not one of the primary drivers for forming relationships in the business process outsourcing industry. Only 44% of companies believe that it is important from a cost-saving point of view. (Deloitte)
#41. Approximately 80% of the BPO industry’s contracts are awarded to India’s top three cities: Bangalore, Mumbai, and Delhi. Chennai comes in ninth, while Hyderabad ranks fifth. (AT Kearney)
#42. By increasing the number of unemployed domestically, the BPO industry has a negative impact on society. The number of jobs outsourced is more than double the number of unemployed Americans, with more than 14.3 million being outsourced in total. In short, bringing back those jobs would be enough to hire every full-time and part-time worker that wants a job. (The Balance)