The Evolving Landscape of the BPO Industry: Insights and Trends

Let us begin by asking: What is BPO? BPO involves subcontracting non-core business processes to a third-party service provider instead of handling them in-house.

Companies of all sizes have various reasons for employing outsourcing. BPO for small businesses and startups allows farming out of secondary activities to service providers so that these businesses can focus on their core competencies. Big companies also outsource certain functions to reduce labor and operating costs.

Over the years, BPO has experienced significant market changes. What started as a business strategy in the manufacturing sector has expanded to cover almost all industries, from e-commerce to healthcare. In addition to handling front-office (customer-facing) functions, BPO firms now offer back-end operations. Even call centers have transitioned to contact centers.

Learn about the factors influencing the BPO industry below.

Key Factors Driving BPO Market Changes

Advancing technology.

Technology, consumer expectations, and evolving business requirements heavily influence the landscape of BPO trends and forecasts. Let’s delve into the driving factors that are instigating changes within the BPO market:

Advancing technology: Technology has emerged as a transformative force in the business realm. Deloitte highlights key digital catalysts, including automation, single-instance enterprise resource planning (ERP) systems, case service management, and cloud computing. The advent of artificial intelligence (AI) also holds immense potential, albeit amid recent controversies.
Evolving consumer demands: Today’s customers harbor higher expectations than ever, as affirmed by 93% of service teams surveyed by Hubspot. The proliferation of the internet and social media has endowed consumers with greater knowledge and empowerment. Consequently, they seek personalized, on-demand services and an exceptional customer experience.
Tight market competition: The BPO landscape has become fiercely competitive, with providers offering various outsourcing services. Depending on your specific requirements, established leaders and emerging contenders can deliver substantial value. For businesses exploring outsourcing options, this increases the likelihood of finding a BPO partner that aligns with their niche, size, budget, and needs.
Changing business landscape: The business environment undergoes continual transformations due to various factors, including global events. The COVID-19 pandemic serves as a pertinent example. This crisis catalyzed the widespread adoption of remote work, further accelerating the pace of digitalization.

6 BPO Market Trends and Predictions

The BPO industry has been constantly evolving and expanding. The global BPO market size can grow from $292.3 billion in 2022 to $477.7 billion by 2030 at an expected compound annual growth rate (CAGR) of 6.3% during the forecast period.

Businesses looking to outsource should stay updated with the latest market trends and predictions. That allows them to make informed outsourcing decisions and partner with the right BPO service providers.

Let us explore the current and future trends of the BPO market below.

1. Digital Transformation: Harnessing the Power of Technology

Digital transformation is one of the BPO trends and predictions triggered by the pandemic. According to McKinsey, the COVID-19 crisis accelerated this shift in business. Many companies have adopted the latest digital tools and technologies to gain a competitive advantage. Some businesses outsource to BPO firms to leverage the following:

Automation: Robotic process automation (RPA) is a game-changer for the BPO industry. This technology automates various tasks, helping reduce manual work and accelerate business processes.
AI: This technology simulates intelligence in machines, allowing them to work like humans. A chatbot is a perfect example of AI for customer service; it assists customers with simple inquiries.
Cloud Computing: This application delivers services by accessing software, databases, servers, and networks via the Internet. BPO companies use contact center as a service (CCaaS) technology for their customer service operations to enhance the buyer’s experience.

2. Omnichannel Solutions: Enhancing Customer Interactions

Omnichannel is more than just providing customer support via multiple channels. It is about offering them a seamless and consistent experience across all channels. It is one of the BPO trends and predictions most BPO firms adopt.

According to Hiver’s 2021 report, 60% of service teams provide customer support via three or more communication channels. Many businesses hire BPO providers to offer this capability. Below are the percentages of respondents using different channels:

Phone service (83%): The phone is still the most preferred channel for communication. BPO firms use computer telephony integration (CTI) for their call centers, handling customer service, sales, and tech support.
Email support (77%): Email remains useful for business and marketing. Aside from phone services, BPO companies offer email and chat support to assist their customers.
Live chat (42%): Due to speed and convenience, real-time chat has become increasingly popular for customer service. BPO providers employ and train agents to respond to customers via online chat platforms.

The Bottom Line

The outsourcing industry constantly evolves as it adapts and thrives in the digital age. Staying updated with the latest BPO trends and predictions is crucial for making informed outsourcing decisions. As such, consider the following trends:

Digital transformation
Omnichannel solutions
XCaaS
Remote work
Big data and cybersecurity
Nearshore and offshore outsourcing

Studying these industry trends helps you make the right decisions and stay ahead of the curve. Keeping abreast of predictions ensures your business is poised to achieve scalability, sustainability, and success.

Looking for a BPO partner aligned with current and future trends? Contact us, and let’s connect!