Asia-Pacific (APAC) continues to be a vibrant market for business process outsourcing (BPO) space, according to analyst firm GlobalData, which estimates the market will grow at a compound annual growth rate (CAGR) of 10% between 2018 and 2023 to reach US$120.4 billion, behind North America with a market valued at US$152.5 billion.
Sunil Kumar Verma, Lead ICT Analyst at GlobalData, comments: “Outsourcing of specific functions or processes with a view to focus on cost-optimization, enhancing flexibility to scale up as per business requirements and re-focusing on core business activities by large as well as specialist companies will be the key drivers of the BPO market in the APAC region.”
GlobalData says China, Japan, India, Australia and South Korea will be the five largest BPO markets within the APAC region, accounting for more than 80% of the overall market share by 2023.
“This will be primarily be driven by the increasing number of global companies expanding their base in the region and partnering with agile business partners to provide them with the required services,” says Verma.
The human resources BPO segment is set to grow at a CAGR of 15% during the forecast period and continue to be the largest segment with 32% share in the overall BPO market in the region.
“With increasing process standardisation, productivity gains due to digitalisation and workflow automation, the extent of outsourcing by enterprises might not be limited only to back office operations in the future,” said Verma.
“It will make inroads into the front-office and middle-office operations as well. Enterprises along with business partners might collaborate to establish mutual service centers such as Center of Excellence (CoE). However, security and privacy will continue be the major hindrance for such initiatives.”