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Business Process Outsourcing: Strategic Focus

According to Kable’s BPO market opportunity forecast, the overall BPO market was valued at US$135.7 bn in 2014, and is forecast to reach US$181.5 billion in 2019, growing at a CAGR of 6.0% from 2015 to 2019 with constantly increasing demand for KPO services which is primarily driving the whole BPO market.

The evolution and maturity of the business process outsourcing segment has given birth to a new wave of global outsourcing in the form of knowledge services outsourcing (KPO). Success in off-shoring business process functions has persuaded many multinationals to start outsourcing key business processes and high-end knowledge work. Meanwhile, developments in the field of cloud computing have led to the evolution of a new breed of BPO services, called business process as a service (BPaaS).

While the primary objective of enterprises deploying BPO services was improvement in cost structure and operational efficiency, over the past few years, BPO services have increasingly become more interwoven with core business processes. As a result, companies are now acknowledging the BPO service provider as a preferred partner, which helps them to mitigate risk and realize improvements in service delivery, whilst following an outcome-based revenue model.

In line with their evolution from vendors to strategic partners, BPO providers are increasingly using technology to develop innovative and robust solutions that address the needs of the modern enterprise. Meanwhile, the growing popularity and adoption of multi-channel services, and the increasing demand from clients for a single view of customer interactions across multiple channels, has catalyzed the evolution of robotic process automation (RPA). This is also helping providers to shift their services from the traditional human assisted model to self-help automated tools and the gradual transition from voice interactions to chat and email interactions.

Initially, the developing countries of Asia and Latin America, such as India, China, Brazil, and Indonesia, were the major hubs of BPO operations, but over the past few years, other developing countries such as Egypt, the Philippines, Dubai, Singapore, and Morocco, have been striving hard to develop BPO capabilities to attract established BPO providers. However, with the evolution of robotic process automation and outcome-based revenue models, the traditional labor arbitrage model is losing out rapidly, in turn increasing the importance of near-shore locations for the procurement of BPO services. Enterprises are increasingly opting for near-shore locations to procure BPO services, as these locations operate in the same time-zone and possess cultural and language similarities, which helps them to provide improved customer services.

Posted in Technology.

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