Out of office: Intensifying competition from overseas providers has reduced profit

The Business Process Outsourcing (BPO) industry provides a variety of back and front office functions to business, such as call centre operations, IT services, debt collection and recruitment services. Although many companies undertake these tasks in-house, industry firms can typically perform these processes more efficiently and at a lower cost due to their greater expertise and economies of scale. Outsourcing also allows companies to focus on performing higher value activities. Therefore, downstream businesses have increasingly demanded the industry's services, contributing to the industry's steady performance. Overall, industry revenue is expected to rise at an annualised 3.3% over the five years through 2018-19, to $34.6 billion. This includes expected revenue growth of 2.3%...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • Firms have been outsourcing low-value tasks to the industry to focus on higher value activities
  • Industry firms have benefited from incorporating new technology into their service offerings
  • Industry players are anticipated to benefit from companies seeking quality over cost savings
  • Industry Report - Industry Investment Chapter

    The Business Process Outsourcing industry exhibits low capital intensity. For every dollar invested in capital across the industry, an estimated $24.00 is paid as wages. This low capital intensity is reflective of the highly labour-intensive nature of the industry, with the majority of industry operations requiring significant  labour inputs. The service-based nature and high skill requirements of the industry keep wage costs high. Automation and economies of scale have become increasingly important for industry operators over the past five years, with firms purchasing sophisticated computer systems and IT software to gain a competitive edge and reduce wage costs...purchase to read more.

    Additional Insights for the Business Process Outsourcing Industry

    IBISWorld has determined the most important Key Success Factors for the Business Process Outsourcing are:

  • Ability to avoid unnecessary work
  • Ability to effectively communicate and negotiate
  • Company's product has low running costs
  • IBISWorld analysts also discuss how external factors such as IT and telecommunications adoption and Number of businesses in the Business Process Outsourcing industry impact industry performance..

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    What's in this report

    What is the Business Process Outsourcing Industry?

    The industry provides a range of third-party outsourcing services on a contract basis. Clients outsource specific operations and business functions, including both back office and front office tasks. Industry players operate, administer and manage these functions based on defined and measurable performance metrics.

    Industry Products
  • Customer relationship management services
  • Finance and administration services
  • Human resources and recruitment services
  • Computer software design and consultancy services
  • Advertising and marketing services
  • Debt collection services
  • Industry Activities
  • Outsourced bookkeeping
  • Outsourced marketing and advertising
  • Outsourced collections
  • Outsourced IT services
  • Outsourced call centre operations
  • Outsourced employment placement and recruitment services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • IT and telecommunications adoption
  • Number of businesses
  • Average weekly earnings
  • Business confidence index

  • Current Performance
  • Outsourcing trends
  • Demand drivers
  • Participation and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Opportunities
  • Challenges
  • Table: Business Process Outsourcing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Business Process Outsourcing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Agriculture, Forestry and Fishing
  • Mining
  • Manufacturing
  • Electricity, Gas, Water and Waste Services
  • Construction
  • Wholesale Trade
  • Transport, Postal and Warehousing
  • Information Media and Telecommunications
  • Financial and Insurance Services
  • Professional Services

  • Key Selling Industries
  • Computer and Computer Peripheral Wholesaling

  • Products & Services
  • Human resources and recruitment services
  • Computer software design and consultancy services
  • Finance and administration services
  • Advertising and marketing services
  • Debt collection services
  • Customer relationship management services
  • Chart: Business Process Outsourcing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Other markets
  • Financial service providers
  • Professional service providers
  • Government agencies
  • Construction, manufacturing and engineering sectors
  • Retailers and wholesalers
  • Chart: Major Market Segmentation for the Business Process Outsourcing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Business Process Outsourcing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Business Process Outsourcing Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Business Process Outsourcing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Business Process Outsourcing Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Back Office
  • An office where the administrative work of a business is carried out, as opposed to its dealings with customers.
  • Cloud
  • The provision of offsite information technology services including software and data storage over the internet.
  • Cybercrime
  • Crime carried out utilising a computer and a network. Often for the purpose of spying or obtaining illegal information.
  • Front Office
  • An office that comes into contact with clients, including the marketing, sales, and service departments.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Business Process Outsourcing market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Business Process Outsourcing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Business Process Outsourcing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Business Process Outsourcing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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