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April 16, 2024

Understanding the Role of Technology in Business Process Outsourcing

It’s hard to know exactly when IT outsourcing began, but the history of the movement is commonly linked to Eastman Kodak’s move in 1989 to outsource its IT to another titan of US industry - IBM.


Kodak tasked ‘Big Blue’ with building and designing a data center to host the company’s growing mountain of computerized data, and the success of the project spurred corporate America to investigate the benefits of not trying to do everything themselves.

Through the 1990s, so-called business process outsourcing (BPO) gained momentum as non-core, back office functions were outsourced, first to companies in the US, like Electronic Data Systems (EDS), which became a giant of the outsourcing industry, then further afield.

Offshoring flourished as the economies of countries like India, Pakistan, and the Philippines were liberalized and trade links developed. Proactive governments across the world saw the potential to become low-cost outsourcing destinations, and set about creating a pipeline of talent by focusing heavily on STEM education.   

By the turn of the millennium, business process outsourcing was a multibillion industry, but still dealing mainly with non-core business functions like data processing, payroll, accounting, service desk support, and contact centers. The rise of the internet changed everything, allowing continuous, real-time flows of data at scale between outsourcing partners and their customers, allowing more complex and mission-critical functions to fall under the BPO banner.

The global BPO market is estimated to be worth US$370 billion in 2024, rising to $440 billion in 2028, an annual compound growth rate of 4.43% according to Statista. Nearly a third of BPO spending will take place in the US this year, with tens of billions more spent with outsourcing partners in nearshore destinations in Latin America, and further afield in Eastern Europe, South Asia, and Southeast Asia.


What business processes are being outsourced in 2024


What Business Processes Are Being Outsourced in 2024?

The key to the healthy projected growth in the BPO market is the diverse technologies that underpin the business and allow an ever-growing range of tasks to be completely remotely by trusted partners.

Five key technologies underpinning BPO activity all over the world include:

  • Automation
    Automation is a crucial aspect of BPO, as it helps streamline repetitive tasks and reduces human errors. Automated processes can be up to 50% more efficient than manual processes, freeing up employees to focus on more strategic tasks. Automation is particularly beneficial in sectors like customer service, accounting, and data entry, where tasks are repetitive and time-consuming. 
    Robotic Process Automation (RPA) mimics the way humans interact with software, allowing bots to perform high-volume, repeatable tasks. Many BPO partners have optimized their systems to become the most efficient providers in processing invoices, automating data entry for customer records, and managing large payroll and human resources platforms.
  • AI and Machine Learning
    Automation can be supercharged with the use of artificial intelligence and machine learning, allowing automated systems to learn, improve, and become more efficient as they process data and complete business tasks.
    AI can analyze large amounts of data to identify patterns and trends, which can be used to improve processes and customer experiences. For example, AI can be used in call centers to handle basic inquiries, freeing up human agents to handle more complex issues.
  • Cloud Computing
    The move to the cloud has been a game-changer for BPO, allowing data to be rapidly shifted around the world and by enabling remote work and flexible service delivery. BPO companies can offer services from anywhere in the world, which extends flexibility for both the staff and the outsourcing client. Many cloud-based business intelligence, database and AI platforms are now integral to BPO, and have allowed for considerable cost savings as automation services that were once bespoke in nature, have been standardized and developed as off the shelf products.
  • Data Security
    Data security is a critical concern in BPO, as outsourced companies often handle sensitive information. Cloud computing and encryption technologies help protect confidential data and prevent security breaches. Access controls and firewalls ensure that only authorized personnel can access sensitive information. Cloud-based platforms also allow for easy collaboration and data sharing among team members. BPO partners must pay close attention to security, and data privacy, ensuring they are compliant with legislation such as the European Union’s powerful GDPR provisions.
  • Contact Center Platforms
    Customer service is the single biggest segment of the BPO market, accounting for nearly one third of the market in 2023. A host of contact center platforms incorporating telephony, integrated multi-channel messaging, and contact center management software, have been developed by vendors and are widely supported by BPO partners.

The BPO giants on the global stage include the likes of Accenture, IBM, Tata Consulting, and Tech Mahindra. But Accelerance works with a global network of carefully vetted BPO specialists that we believe best balance quality and cost effectiveness.


Here Are Six Key Advantages You Will Enjoy in Choosing an Accelerance Partner to Outsource Your Business Processes to:

  • Reduced Costs
    Automation of certain BPO processes can significantly reduce costs for organizations. The cost saved through automation can be directed toward research, development, and other major initiatives that are essential for business success.
  • Increased Efficiency
    By automating manual processes, there’s a massive reduction in the time taken by humans to accomplish document-related tasks, such as data extraction and paperwork processing. This increases organizational efficiency, allowing staff to focus on more important areas like customer service and strategy implementation.
  • Greater Accuracy
    BPO automation minimizes errors associated with manual labor while ensuring accuracy. AI and machine learning technologies can automate data capture and streamline validation, which is much more precise (and quicker) than humans.
  • Improved Compliance
    Manual processes aren’t only inefficient and error-prone, but they’re also not secure. Automating BPO processes increases security and trust, helping to ensure compliance with government regulations and industry standards.
  • Increased Productivity
    With manual labor largely removed from BPO processes, employees are free to focus on tasks that require higher levels of creativity, innovation, and decision-making rather than tedious manual tasks. These enhanced conditions boost team morale, improving overall productivity and business growth.
  • Enhanced Customer Experiences
    From processing transactions to responding to requests, clients don’t have to wait for long periods of time when BPOs have efficient and accurate document automation. This elevates customer experiences and satisfaction, ultimately leading to increased customer loyalty and retention over time.


BPO Continues to Deliver Results

Business process outsourcing is predicted to experience solid growth during the rest of this decade because it continues to deliver results for customers. Experienced and capable BPO providers leverage the best technology to help their customers drive efficiency, reduce costs, and improving customer experiences. 

Automation, AI and machine learning, data security, and cloud computing are all essential components of modern BPO, helping companies stay competitive and adapt to changing customer needs. 

As technology continues to evolve, we can expect to see even more innovative solutions in the BPO industry. Accelerance has over 20 years experience working with the best BPO providers in the world. Get in touch with our outsourcing experts to find out how BPO can do the heavy lifting for your business. 

Olivier Poulard

Olivier is a change agent with over 20 years of global international leadership experience, combining all aspects of digital product development, technology management, software engineering, program management, and offshore outsourcing at scale.

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