Exploring Today’s Trends and the Future of Business Process Outsourcing

Companies looking to outsource tasks for increased efficiency and reduced costs must understand recent industry shifts to align their business strategies with their investments. Getting insights into the future of BPO is also crucial to preparing for challenges to come.
Future of Business Process Outsourcing - Featured Image

Written by Joyce Ann Danieles



Due to international issues, technological advancements, and varied market trends, the business process outsourcing (BPO) industry has changed. 

Companies looking to outsource tasks for increased efficiency and reduced costs must understand recent industry shifts to align their business strategies with their investments. Getting insights into the future of BPO is also crucial to preparing for challenges to come. 

Read on to explore the latest trends and the likely future of business process outsourcing


Latest Trends in the BPO Industry

Latest Trends in the BPO Industry - Automation, AI bots taking over processes

BPO refers to hiring a third-party vendor to perform specific back-office and front-office functions. Businesses usually outsource finance and accounting services, data entry, customer service, and information technology (IT) support. This approach allows them to focus on developing strategies to expand further. 

Grand View Research reveals that the global BPO market value will reach almost $246 billion in 2021. The research notes the following factors as drivers of this market value:

  • Enhancing efficiency
  • Improving business agility
  • Reducing operating costs
  • Focusing on core competencies
  • Adapting to changing business dynamics

Third-party service providers continue to explore ways to upgrade their operations and offerings amid the ongoing Covid-19 pandemic. They also aim to grab valuable revenue opportunities to broaden innovations. Below are the latest market trends expected to shape the future of BPO.

Emerging Technologies

BPO companies ramp up their automation, cloud computing, and social media tools to handle talent shortfalls, decrease expenses, and accelerate processes during the crisis. They also target improving their products and services by deploying these capabilities.

  • Robotic process automation (RPA) features automated user interface systems equipped with artificial intelligence (AI) and bots to complete tasks fast while minimizing costs. As technology modernizes, RPA can improve further and accelerate back-office functions.
  • Social media management tools help companies enhance real-time customer engagement online and gain first-hand insights to scale offerings. BPO vendors expect to advance social media monitoring, business intelligence, and customer response through these platforms.
  • Cloud computing involves virtual storage systems that offer cost-efficiency compared to data centers and hardware. BPO providers and their clients can maximize this technology, allowing greater collaboration and scalability.

Increased Staff Upskilling 

Since technology constantly evolves and new processes suddenly emerge, some businesses and employees struggle to stay updated. The advancements also urge specialization in the latest tools and approaches.

To compete and prepare for the future of business process outsourcing, most BPO companies host regular training for their workers’ upskilling. They expect this move to help them streamline their workflow.

Booming Startup Clients

BPO contractors increasingly target startups as clients because they can achieve a higher margin profile. They also perceive the smaller market as less competitive than the larger one. Furthermore, startups with low recruitment funds often seek an opportunity to employ cost-effective talent overseas, making them ideal BPO customers. 

Complete Partnership Transparency

Companies now see outsourcing as no longer just a simple, cost-effective labor source but a long-term partnership. A more profound and broader relationship between a BPO company and a client drives this view. 

As a result, a BPO contract now allows the client and the provider to share enterprise data and technology easily. This seamless exchange will continue because more countries adopt policies for complete transparency in the industry.

Extended Work-from-home Arrangements

The Covid-19 public health crisis forced many companies worldwide to transition to remote work setups in early 2020. Telecommuting allows BPO providers to save on real-estate costs and offer more flexibility to their employees.

Hence, these third-party vendors intend to extend the remote work setup even when the pandemic is ending. They also plan to upgrade their systems to increase collaboration among employees. 

Ultimately, knowing the latest BPO market trends gives you a hint into the future of outsourcing. If you want to expand your knowledge about outsourcing, visit our BPO learning center.


The Future of Business Process Outsourcing 

digital interface background with copy space, future of businesses, outsourcing and customer service

Precedence Research, in its latest report, expects the global BPO market size to reach almost $577 billion by 2030. The international market research and consulting firm also expect the BPO industry to grow at nearly a 9% compound annual growth rate (CAGR) until 2030. 

Given the global health crisis and other technological advancements, each primary BPO sector will experience changes in workplace settings, operational structures, and economic reforms. 

The following insights show how the customer service, IT, healthcare, and finance segments will expand in the next few years.

Customer Service

Customer service is among the fastest-growing sectors in the BPO industry. Meeting increasing consumer demands for establishing and maintaining market position suggests that companies outsource customer support, mainly through third-party call centers.

As the competition to achieve customer satisfaction and retention tightens, Transparency Market Research (TMR) expects the global call center outsourcing market to advance at almost a 6% CAGR from 2021 through 2031. TMR adds that the sector would be worth nearly $146 billion by 2031. 

Information Technology

Optimizing a wide talent pool and niche expertise for software development and technical support has influenced the escalating need for IT outsourcing. Companies also hire a BPO vendor to provide cloud-based data storage, which is cheaper than buying and maintaining their own. 

With the promise of achieving digital transformation while saving costs, the worldwide IT outsourcing market could register a 4.13% CAGR from 2022 through 2027. Mordor Intelligence’s study indicates that the segment could reach over $681 billion by 2027.


Minimizing errors, addressing unauthorized access, and enhancing workflow encourage healthcare organizations to adopt BPO as part of their growing business strategy during the global health crisis. Moreover, the rising availability of various health insurance plans and telehealth services pushes healthcare providers to seek support from third-party vendors for streamlined processes. 

Due to these multiplying workloads, the global healthcare outsourcing market might exhibit a 9.10% CAGR until 2027, according to Research and Markets’ latest analysis. R&M also reports that the sector will reach almost $45 billion by 2027 due to the increasing need for outsourcing healthcare solutions. 

Finance and Accounting

The global economic crisis triggers the demand for finance and accounting BPO services. They lessen the required customization for in-house processes and systems. Financial institutions also work to standardize their BPO activities in response to a call for complete transparency and stringent regulations.

ReportLinker’s new industry report shows that the worldwide finance and accounting outsourcing market could achieve a CAGR of almost 6% by 2026 because third-party contractors help incorporate best practices into financial management. The forecast also shows that the sector will likely account for more than $52 billion of the global BPO market value by the same year.


Factors Affecting BPO Growth

Factors Affecting BPO Growth

Aside from learning about each sector’s contribution to shaping the future of business process outsourcing, you should also understand the market dynamics affecting the industry. 

Expect that these three factors will affect business process outsourcing results in the long run:

1. Drivers

Cost-effectiveness is the primary factor driving the BPO market growth. Companies of all sizes employ a third-party service provider to streamline and accelerate their back-office and front-office processes. Outsourcing also eliminates the need to train a dedicated team and use infrastructure to perform non-core tasks. 

As a result, companies can free up time and resources. They gain enough time to prioritize their core capabilities for enterprise expansion. They also generate more savings to support future initiatives or prepare for unforeseen events. 

With these benefits, you can anticipate a constant boom in the industry. Businesses can include BPOs in their long-term planning efforts to maximize such advantages.

2. Restraints

Data privacy and security issues will continue to hinder the growth of the BPO market worldwide. The outsourcing environment requires sharing information between the provider and its client, thus exposing sensitive business data to cyber threats.

Misuse and improper management of data can lead to breaches and hacking incidents. Privacy violations resulting from mishandling information can damage the reputation of both companies and consumers.

Without strict BPO compliance rules, your organization’s privacy and security are always at risk. If companies find it unsafe to make outsourcing investments, the BPO industry will suffer.

3. Opportunities

The increased use of AI-powered automation, cloud computing, and social media management systems will help accelerate the BPO industry’s expansion. These emerging technologies help outsourcing vendors simplify and speed up workloads.

Businesses might find purchasing and owning such tech expensive. Therefore, they look for a third-party vendor capable of delivering the systems at affordable costs. 

Having up-to-date systems compels companies to employ an outsourcing contractor for capacity increases and cost reduction. This approach can open an opportunity to support the BPO industry’s rapid growth.


The Bottom Line

Knowing what business process outsourcing is and its latest market trends helps provide an overview of its current place in the market. Predicting the future of the BPO sector also allows you to identify business expectations and goals in the long run.

Ultimately, seeing the big picture helps you define your outsourcing objectives even during national and international business challenges. You can also make necessary adjustments to your BPO strategy to match your operational needs. Most importantly, you can prepare for abrupt changes caused by global issues, tech upgrades, and industry shifts.

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