Business process outsourcing (BPO) is a subset ofoutsourcing in which a company contracts the operations and responsibilities of a specificbusiness process to a third-partyservice provider.
BPO offers organizations significant advantages, including increased flexibility, cost efficiency, and a sharper focus on core competencies. By transforming fixed costs intovariable 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.
BPO originated withmanufacturing firms, such asCoca-Cola outsourcing parts of theirsupply chain.[1] BPO can involveback office functions likehuman resources,finance, andaccounting, orfront office functions such ascontact centre services.[2] Some BPO services areinformation technology-based, referred to asITES (Information Technology Enabled Service).Knowledge process outsourcing (KPO) andlegal process outsourcing (LPO) are sub-segments.
International BPO is termedoffshore outsourcing, while regional contracts are callednearshore outsourcing.
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.