Business process outsourcing

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Wikipedia

Business process outsourcing ('BPO) is a subset of outsourcing in which a company contracts the operations and responsibilities of a specific business process to a third-party service provider.

BPO offers organizations significant advantages, including increased flexibility, cost efficiency, and a sharper focus on core competencies. By transforming fixed costs into variable costs, companies can accelerate business processes and leverage specialized expertise from third-party providers. Challenges also arise from unclear contracts, changing requirements, unmet service levels, and over-dependence on providers.

Types

BPO originated with manufacturing firms, such as Coca-Cola outsourcing parts of their supply chain.[1] BPO can involve back office functions like human resources, finance, and accounting, or front office functions such as contact centre services.[2] Some BPO services are information technology-based, referred to as ITES (Information Technology Enabled Service). Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are sub-segments.

International BPO is termed offshore outsourcing, while regional contracts are called nearshore outsourcing.

Industry size

Convergys call center in Baguio, Philippines

The global Business Process Outsourcing (BPO) market has experienced significant growth, with projections indicating continued expansion in the coming years. The global BPO market was valued at approximately USD 302.62 billion in 2024 and is projected to reach USD 328.37 billion in 2025, growing at a compound annual growth rate (CAGR) of 9.8% from 2025 to 2030, reaching USD 525.23 billion.[3]

India's BPO services market was valued at USD 49.87 billion in 2024 and is expected to reach USD 139.35 billion by 2033, growing at a CAGR of 12.5%.[4]

The Philippines is a major global BPO hub, with the industry generating USD 38.7 billion in 2024. Filipino workers’ English proficiency and familiarity with Western culture are key factors in the country’s success in serving international clients.[5]

China's BPO market was valued at USD 19.68 billion in 2024 and is anticipated to grow at a CAGR of 12.0% from 2025 to 2030, reaching USD 38.38 billion.[6] China's BPO industry is primarily focused on domestic outsourcing, serving local businesses rather than international clients.

References

  1. ↑ Tas, J. & Sunder, S. 2004, Financial Services Business Process Outsourcing, Communications of the ACM, Vol 47, No. 5
  2. ↑ "Getting A Piece Of Business Process Outsourcing". Forbes.
  3. ↑ "Business Process Outsourcing (BPO) Market Size & Share Report, 2025-2030". Grand View Research. Retrieved 14 August 2025.
  4. ↑ "India BPO Services Market to Hit Valuation of US$ 139.35 Billion by 2033". Yahoo Finance. Retrieved 14 August 2025.
  5. ↑ Inquirer. "The $38.7-Billion BPO Industry: Filipino Workers' English Skills Crucial to Success". Philippine Daily Inquirer. Retrieved 14 August 2025.
  6. ↑ "China Business Process Outsourcing Market Report". Grand View Research. Retrieved 14 August 2025.