Outsourcing Services Market Size
![Outsourcing Services Market Summary](https://s3.mordorintelligence.com/outsourcing-services-sarket/1719491253063-outsourcing-services-sarket-Market-Summary.png)
Study Period | 2019 - 2029 |
Market Size (2024) | USD 1.02 Trillion |
Market Size (2029) | USD 1.39 Trillion |
CAGR (2024 - 2029) | 6.40 % |
Fastest Growing Market | Asia Pacific |
Largest Market | North America |
Major Players![]() *Disclaimer: Major Players sorted in no particular order |
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Outsourcing Services Market Analysis
The Outsourcing Services Market size is estimated at USD 1.02 trillion in 2024, and is expected to reach USD 1.39 trillion by 2029, growing at a CAGR of 6.40% during the forecast period (2024-2029).
Factors such as the rising emphasis on minimizing operational expenses, the unavailability of a skilled workforce, and the incorporation of advanced technology in outsourcing services are propelling players to develop new services to capture market share. The market is expected to witness significant growth during the forecast period.
- Organizations are increasingly turning to outsourcing services, driven by various factors. One major factor is the cost-saving potential when outsourcing to countries with lower labor costs, which can lead to substantial reductions in expenses related to salaries, benefits, and overheads. Additionally, companies are focusing their resources and management efforts on core business activities, enhancing their competitive edge and fostering growth.
- The market players are acquiring various outsourcing firms in the European region to expand their customer base. For instance, in February 2024, Konecta, a global player in Customer Experience services, bolstered its presence in English-speaking markets by acquiring Bespoke, a United Kingdom-based business process outsourcing firm. Bespoke's primary production facilities are in Durban, South Africa.
- Additionally, Konecta expanded its English services by launching its inaugural operations center in San Antonio, Texas (USA). These strategic moves align with Konecta's broader geographic expansion strategy, enriching its offerings for English-speaking clients, notably in offshoring services. With these expansions, Konecta is solidifying its standing as a critical player in the industry.
- Moreover, the growing popularity of cloud computing in business process outsourcing is a significant factor affecting the adoption of BPO services. Cloud computing aids BPO operators in improving the time to market, reducing costs, and enhancing the quality control process.
- Furthermore, cloud computing in the market ensures instant computing support and system keys, universal access, and adjustable provisioning whenever needed for required business purposes. These advantages are expected to positively impact the overall adoption of cloud computing in the business process outsourcing sector during the forecast period.
- However, concerns related to data security, customization, and data migration, coupled with the dynamic needs of the IT structure, impacting the cost of customization for end users, are poised to hamper market growth during the forecast period.
Outsourcing Services Market Trends
The Information Technology Outsourcing Segment to Witness Significant Growth
- The market is witnessing a rising emphasis on leveraging the core competencies by outsourcing non-core operations, increasing organizations' focus on IT to gain differentiation by relying on outsourced vendors, continuing the shift to cloud services, and embracing virtualized infrastructure. Moreover, due to the growing emphasis on digital transformation, organizations depend on the performance of creative applications and extensions that IT services can provide.
- Hence, there is a strategic shift among businesses and organizations to prioritize their core strengths and critical functions while outsourcing non-essential IT operations to external service providers. This trend recognizes the importance of focusing internal resources and expertise on activities directly contributing to a company's competitive advantage and overall business growth.
- One of the primary drivers behind this shift is recognizing the critical importance of focusing on core competencies. Businesses are increasingly specific about investments in their resources and expertise, allocating them to activities directly contributing to their competitive advantage. Outsourcing non-core IT operations allows organizations to divert their attention and resources toward innovation, product development, and customer-centric efforts, enhancing their market positioning and agility.
- Further, the market is witnessing an expansion in the SME sector due to the rising investments in SMEs to adopt advanced technologies. These factors are further expected to create substantial growth opportunities for IT outsourcing vendors in the coming years.
- For instance, in May 2023, three UK universities collectively received GBP 4.5 million to establish small and medium-sized enterprise (SME) engagement hubs under the HNCDI (Hartree National Centre for Digital Innovation) program. Newcastle University, Ulster University, and Cardiff University are expected to provide targeted and accessible help for SMEs to boost their competitiveness and growth by adopting advanced digital technologies such as supercomputing, data analytics, visual computing, and artificial intelligence (AI).
- Furthermore, rising cloud deployment is significantly augmenting the growth of the IT outsourcing market by offering scalable, cost-effective, and flexible solutions. According to Flexera Software, as of 2024, 73% of enterprises surveyed implement a hybrid cloud in their organizations. Businesses increasingly leverage cloud services to reduce infrastructure costs and improve agility. This shift enables IT outsourcing providers to offer specialized cloud management, integration, and security services.
- Consequently, organizations can focus on core activities while outsourcing complex IT tasks. The demand for cloud expertise drives IT outsourcing growth as companies seek to harness cloud technology's benefits without the need for extensive in-house resources. This trend accelerates innovation and operational efficiency across industries.
![Outsourcing Services Market: Enterprise Cloud Strategy, By Type, in Percentage (%), Global, 2022-2024](https://s3.mordorintelligence.com/outsourcing-services-market/1719580108709-outsourcing-services-market-Enterprise-Cloud-Strategy-By-Type-in-Percentage--Global-2022-2024.png)
North America to Hold a Significant Market Share
- The United States holds a significant position in the North American outsourcing services market. Due to the growing demand for business process outsourcing services from the region's tech giants, the region is expected to maintain its dominance. The surge in the overall demand for cloud computing and the personalization of service offerings to better meet individual needs are also expected to drive regional expansion.
- Many Canadian companies are transitioning from solely relying on public cloud services. Instead, they are embracing a hybrid IT approach, blending public, private, and traditional infrastructure. This shift is driven by the benefits these organizations see in enhancing their operations and customer service through a hybrid cloud strategy. In line with its "cloud-first" approach, the Canadian government prioritizes cloud services for IT investments, techniques, and projects. By leveraging private-sector innovations, the government aims to enhance the agility of its IT infrastructure. Such government initiatives toward IT development are expected to drive market growth.
- Moreover, businesses operating within North America are increasingly integrating AI (artificial intelligence) and automation technologies into their outsourcing processes. This trend aims to boost efficiency and minimize manual intervention. The adoption of AI and automation in outsourcing is on a steady rise. Companies are turning to AI, RPA (Robotic Process Automation), and machine learning to streamline operations, enhance efficiency, and reduce expenses. In response, outsourcing service providers are pivoting toward AI-centric solutions, enriching their services with smarter, data-driven insights for clients.
- Various players in the region are using AI in BPO services. For instance, Expiviahas reshaped the landscape of BPO services by prioritizing technology and AI. Rather than relying solely on conventional benchmarks, the company prioritizes technology-driven strategies, ensuring its clients derive strategic value.
- Also, large enterprises are increasingly adopting IT outsourcing strategies for better backend IT support and IT infrastructure updates, which would drive market growth in the United States. For instance, in July 2023, Tata Consultancy Services (TCS) expanded its relationship with GE HealthCare Technologies Inc., a medical technology company based in the United States, to help transform its IT operating model for managing its applications and driving innovation. After this collaboration, TCS would provide outsourcing services for IT application development, maintenance, rationalization, and standardization of GE Healthcare, supporting the growth of the market in the country's large enterprise sector.
![Outsourcing Services Market: Market CAGR (%), By Region, Global](https://s3.mordorintelligence.com/outsourcing-services-market/1719580127586-outsourcing-services-market-Outsourcing-Services-Market-Market-CAGR--By-Region-Global.png)
Outsourcing Services Industry Overview
The outsourcing services market is semi-consolidated with an array of services from various vendors. Major vendors include Accenture, TATA Consultancy Services Limited, Capgemini, Cognizant, and HCL Technologies Limited. Market players are enhancing their portfolios and seeking long-term competitive advantages through strategic partnerships and innovative product offerings.
In March 2024, Celegence Holdings LLC strategically invested in Soterius Inc., a key player in outsourced services, collaboration technologies, and data assets within the drug safety and medical affairs domain. This investment, a part of Soterius' Series A financing, has forged a partnership that capitalizes on the strengths of both Celegence and Soterius. By leveraging the expertise of their teams, this collaboration aims to broaden their reach and fuel mutual growth.
In January 2024, Varanium Cloud Limited, a digital technology company, is establishing its second office and business process outsourcing (BPO) center in Sawantwadi, Maharashtra. The BPO center would specialize in services such as data accounting, background verification, and debt recovery.
Outsourcing Services Market Leaders
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Accenture PLC
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Tata Consultancy Services Limited
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Capgemini SE
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Cognizant Technology Solutions Corporation
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HCL Technologies Ltd
*Disclaimer: Major Players sorted in no particular order
![Outsourcing Services Market Concentration](https://s3.mordorintelligence.com/outsourcing-services-sarket/outsourcing-services-sarket-1719526310660-Market.webp)
Outsourcing Services Market News
- March 2024: Alight Inc., a provider of cloud-based human capital technology and services, entered a definitive agreement to divest its professional services segment and its payroll and HCM outsourcing businesses, collectively known as the "Payroll & Professional Services business," to an affiliate of HIG Capital. The deal, valued at up to USD 1.2 billion, is subject to specific adjustments. This values the Payroll & Professional Services business at a multiple of approximately 10 times its estimated 2023 adjusted EBITDA and 24 times its estimated unlevered free cash flow.
- March 2024: iSON Xperiences, a global customer experience management (CXM) firm, recently acquired EC Outsourcing Company, a United Kingdom-based BPO. This acquisition represents a strategic milestone for iSON Xperiences and provides clients with the opportunity to engage directly with an African entity. By leveraging iSON's extensive knowledge of Africa's delivery landscape, clients can now access seamless BPO services from Africa.
Outsourcing Services Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Regulatory Landscape of Outsourcing Services Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Ongoing Migration Toward the Cloud and Adoption of Virtualized Infrastructure
5.1.2 Growing Demand for Efficiency and Scalable IT Infrastructure
5.1.3 Internet of Things for Efficient Delivery of BPO Services
5.2 Market Restraints
5.2.1 Data Security, Customization, and Data Migration
5.2.2 Dynamic Needs of IT Structure Impacts the Cost of Customization for End Users
5.3 Key Technological Trends in Outsourcing Services Market
6. MARKET SEGMENTATION
6.1 By Service Type
6.1.1 Business Process Outsourcing
6.1.2 Information Technology Outsourcing
6.1.3 Human Resource Outsourcing
6.1.4 Knowledge Process Outsourcing
6.1.5 Other Service Types
6.2 By Geography***
6.2.1 North America
6.2.1.1 United States
6.2.1.2 Canada
6.2.2 Europe
6.2.2.1 United Kingdom
6.2.2.2 Germany
6.2.2.3 France
6.2.2.4 Ireland
6.2.2.5 Sweden
6.2.3 Asia
6.2.3.1 China
6.2.3.2 India
6.2.3.3 Japan
6.2.4 Latin America
6.2.4.1 Brazil
6.2.4.2 Mexico
6.2.5 Middle East and Africa
6.2.5.1 United Arab Emirates
6.2.5.2 Saudi Arabia
6.2.5.3 South Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Accenture PLC
7.1.2 Tata Consultancy Services Limited
7.1.3 Capgemini SE
7.1.4 Cognizant Technology Solutions Corporation
7.1.5 HCL Technologies Ltd
7.1.6 Teleperformance SE
7.1.7 Evelyn Partners Group Limited
7.1.8 Thomson Reuters Corporation
7.1.9 TTEC Holdings Inc.
7.1.10 Trinitar Solutions LLP
7.1.11 Amdocs Limited
7.1.12 Infosys Bpm (Infosys Limited)
7.1.13 Automatic Data Processing Inc.
7.1.14 General Outsourcing Public Company Limited
7.1.15 Concentrix Corporation
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE OUTLOOK
Outsourcing Services Market Segmentation
The outsourcing services market study tracks the demand for outsourcing services such as business process outsourcing, information technology outsourcing, human resource outsourcing, knowledge process outsourcing, and other service types worldwide. The analysis is primarily based on the market insights captured through primary and secondary research.
The scope of the study also tracks the various key market parameters, underlying growth influencers, and major vendors operating within the industry, which support market estimations and growth rates during the forecast period.
The outsourcing services market is segmented by service type (business process outsourcing, information technology outsourcing, human resource outsourcing, knowledge process outsourcing, and other service types) and geography (North America [United States and Canada], Europe [United Kingdom, Germany, France, Ireland, Sweden, and Rest of Europe], Asia-Pacific [China, India, Japan, and Rest of Asia Pacific], Latin America [Brazil, Mexico, and Rest of Latin America], and Middle East and Africa [the United Arab Emirates, Saudi Arabia, South Africa, and Rest of Middle East and Africa]). The market sizes and forecasts are provided in terms of value (USD) for all the segments mentioned above.
By Service Type | |
Business Process Outsourcing | |
Information Technology Outsourcing | |
Human Resource Outsourcing | |
Knowledge Process Outsourcing | |
Other Service Types |
By Geography*** | |||||||
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Outsourcing Services Market Research FAQs
How big is the Outsourcing Services Market?
The Outsourcing Services Market size is expected to reach USD 1.02 trillion in 2024 and grow at a CAGR of 6.40% to reach USD 1.39 trillion by 2029.
What is the current Outsourcing Services Market size?
In 2024, the Outsourcing Services Market size is expected to reach USD 1.02 trillion.
Who are the key players in Outsourcing Services Market?
Accenture PLC, Tata Consultancy Services Limited, Capgemini SE, Cognizant Technology Solutions Corporation and HCL Technologies Ltd are the major companies operating in the Outsourcing Services Market.
Which is the fastest growing region in Outsourcing Services Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Outsourcing Services Market?
In 2024, the North America accounts for the largest market share in Outsourcing Services Market.
What years does this Outsourcing Services Market cover, and what was the market size in 2023?
In 2023, the Outsourcing Services Market size was estimated at USD 0.95 trillion. The report covers the Outsourcing Services Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Outsourcing Services Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Outsourcing Services Industry Report
Statistics for the 2024 Outsourcing Services market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Outsourcing Services analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.