The global information technology (IT) outsourcing market has a bright future despite the pandemic.
In the years ahead, organizations tapping into business process outsourcing (BPO) companies will keep expanding. They need support managing their IT infrastructure.
The Asia-Pacific (APAC) region will have 40% of the IT outsourcing market by 2026, with Japan and China taking the lead. Virtualization and dynamic scalability will spur growth.
Different industry reports show similar results. IT outsourcing will accelerate in various sectors such as:
- Banking, financial services, and insurance (BFSI)
- Contact center as a service (CCaaS)
Below are the highlights. Read on.
Table of Contents
IT Process Adoption Drives Global BFSI BPO Service Market Growth
The global BFSI BPO services market will grow due to the rise of cloud computing, data security, and digitization. The Allied Market Research report shows that, from $85 billion in 2020, the international BFSI BPO services sector might hit almost $175 billion by 2028 at a compound annual growth rate (CAGR) of about 10%.
The report says that in terms of end users, the banking segment grabbed the biggest share in 2019, taking nearly 50% of the total service market. This segment will retain the top spot for the next seven years. The capital markets subsector will post the highest CAGR of around 11% in the said period.
It also notes that, per region, North America captured the lion’s share of the services market in 2019, securing over 33% of the total. The region will remain in the highest position until 2028.
Meanwhile, based on service type, the customer support segment corners the biggest share, with over a quarter of the total market in 2019. It will continue to dominate for the foreseeable future. Of all the service types, the human resource segment might have the highest CAGR of nearly 12% within seven years.
The Market Challenge
Data breaches will pose a significant challenge for the global BFSI BPO market within the forecast period. Online theft, or the illegal transfer of customers’ personal, confidential, and financial data, is a major concern for outsourcing companies.
Increased Integration of Tech Solutions Spurring Expansion of Healthcare IT Outsourcing Market
The rising requirement to unify software and hardware solutions is the main reason for the continued growth of global healthcare IT outsourcing. This integration aims to enhance patient care, service quality, and clinical outcomes.
According to a Zion Market Research study, the worldwide healthcare IT outsourcing sector is expected to reach nearly $97 billion by 2028. The increase is from $66 billion in 2021, registering a CAGR of 6.6% within the projected period.
The study says outsourcing IT solutions is a cost-effective approach to reducing healthcare costs. It helps address the need for high-quality patient services. For the past several years, delegating IT solutions to BPO providers has been an increasingly popular practice for businesses of all sizes.
The lack of in-house IT professionals and experts is another factor for the uptrend in the IT services outsourcing market. The research paper adds that critical application services are outsourced only in specific cases. These services include electronic medical records (EMRs), customer relationship management (CRM), and billing systems.
Challenges and Opportunities
Cultural and language barriers limit the industry’s growth momentum. BPO companies hire workers in countries outside the U.S. These BPO firms’ teams speak standard English with regional accents and are in different locations.
Furthermore, a dispersed end-user market restricts the growth of standard IT platforms in the healthcare sector. This keeps the industry from gaining speed.
Based on the Zion Market Research study, the service portfolio expansion and the application of ICD-10 guidelines to diagnose new diseases are seen as opportunities for the healthcare IT outsourcing market.
Demand for APIs and Cloud-based Solutions Propel the Rise of the CCaaS Sector
In the next several years, global IT outsourcing services will increase in the contact center as a service (CCaaS) space. This is due to the growing use of application programming interfaces (APIs) and cloud-based software for greater customer satisfaction.
Emergen Research notes that the worldwide CCaaS market will likely quadruple in total revenue. From almost $4 billion in 2021, it might reach $17.2 billion in 2030 at a CAGR of 18% over the forecast period.
The growing integration of different APIs and customers’ taste for self-service options to answer their product or service concerns are the major factors in the CCaaS market growth. These self-service features include interactive voice response (IVR), automatic call distribution (ACD), automated callbacks, and chatbots.
The report also mentions that scalability, high-level security, and better call rerouting functions (inbound and outbound) will contribute to the continued CCaaS market advancement. Small businesses turn to CCaaS solutions to provide a seamless customer experience for higher consumer retention.
Other reasons for the increase in demand for CCaaS are:
- Quick handling of accurate data
- Real-time tracking of service, productivity, and workforce for deeper insights
- Lower costs by limiting staff hiring
Restraints and Trends
Data security concerns curb the CCaaS market growth. The wider use of artificial intelligence (AI), cloud computing, and other advanced digital technologies across contact centers has increased the potential vulnerability for cyberattacks and other online intrusions.
Despite the challenges, AI applications for enhanced customer experience will pave the way for innovation and acquisitions. The need for AI-based CCaaS solutions, including self-service options, natural language processing, and virtual assistants, will continue to grow.
The IT outsourcing market is growing and will continue to expand. But deciding whether to outsource requires understanding trends. Companies must move with caution when outsourcing their processes, to ensure the integrity of their processes and data.
Global business, economic, political, and social developments are frequently changing and difficult to anticipate. Cautious optimism is the best approach. An event similar to the COVID-19 pandemic that took most by surprise might happen again, greatly impacting the IT outsourcing market.
About the Author:
Rene Mallari is a B2B content writer for Unity Communications, an Arizona-based Inc. 5000 company specializing in outsourcing and offshoring services.