BPaaS Market by Business Process (Human Resource Management, Customer Service & Support, Accounting & Finance), Deployment Model, Organization Size, Vertical (BFSI, Retail & eCommerce, Manufacturing, IT & Telecom) and Region - Global Forecast to 2028
[245 Pages Report] The BPaaS market is expected to grow from USD 63.3 billion in 2023 to USD 92.9 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 8.0% during the forecast period. BPaaS is a rapidly growing segment in the cloud services market, offering businesses a convenient and cost-effective way to outsource various operational processes. As organizations seek to streamline operations and focus on core competencies, BPaaS providers have emerged as critical partners in delivering scalable and efficient solutions. The BPaaS market encompasses various services, including human resources, finance and accounting, customer service, procurement, and supply chain management. These services are typically delivered through a cloud-based platform, allowing businesses to access them from anywhere with an internet connection. Several factors, including the increasing adoption of cloud computing, the need for greater operational efficiency, and the growing complexity of business processes, drive the BPaaS market.
Additionally, the rise of digital transformation initiatives and the proliferation of data-driven decision-making have fueled the demand for BPaaS solutions. The BPaaS market is poised for continued growth as businesses seek to optimize their operations and adapt to evolving market conditions. With its flexibility, scalability, and ability to drive operational excellence, BPaaS is becoming an indispensable tool for organizations looking to stay ahead in an increasingly digital world.
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Recession Impact on the BPaaS Market
As per the Global Economic Prospects report of the World Bank, published in June 2022, the compounding effect of the COVID-19 pandemic and the Russian invasion of Ukraine has resulted in a magnified global economic slowdown. Currently, organizations are focusing on the economic downturn and the looming possibility of a recession. As organizations battle rising prices, volatile supply chains, climate issues, talent scarcity, and the ongoing repercussions of the disruption caused by the pandemic, more than half of the executives describe a bleak economic outlook for the next 12–18 months. A wide range of energy-related commodities has witnessed a price surge due to the Ukraine war. Higher energy prices result in lower real incomes, raise production costs, tighten financial conditions, and constrain macroeconomic policies, especially in energy-importing countries. Businesses continued to invest in tangible assets, mitigating the overall impact on the market. In some countries, government spending on BPaaS increased to support businesses and stimulate the economy. For instance, the demand for non-essential services like accounting, payroll, or HR management has been reduced as companies focus on core operations. Tightened and substantial budgets lead to renegotiations or cancellations of existing contracts. Increased competition among providers drives down prices and margins.
BPaaS Market Dynamics
Driver: Automation and AI reshape BPaaS, enhancing operational efficiency
The BPaaS market is undergoing a profound transformation propelled by integrating automation and AI technologies. Robotic Process Automation (RPA) liberates human resources by automating repetitive tasks, fostering efficiency, and minimizing errors. Artificial Intelligence (AI) algorithms delve into data, discern patterns, and drive informed decisions, facilitating process optimization and predictive analytics. Machine Learning (ML) further enhances BPaaS capabilities by dynamically adapting to real-time data, refining resource allocation, and tailoring experiences to individual business needs. Cognitive automation, a synthesis of RPA, AI, and ML, extends BPaaS into uncharted territories, enabling the automation of intricate tasks and unlocking invaluable insights previously beyond reach. This revolution underscores the evolving landscape of BPaaS, heralding unprecedented efficiency and innovation.
Restraint: Concerns over data security compliance
Security and compliance concerns loom large in the BPaaS market, posing significant challenges for providers and customers. The fear of data breaches and privacy violations, fueled by incidents in other cloud-based services, instills hesitancy among businesses to entrust critical data to third-party vendors. Moreover, navigating the intricate web of industry-specific and regional compliance regulations adds complexity and risk, deterring adoption. The lack of transparency surrounding data security practices and internal controls further exacerbates concerns, eroding trust and impeding market growth. As the industry grapples with these issues, establishing robust security measures and fostering transparent communication will be pivotal in addressing the overarching apprehensions and promoting a more secure and compliant BPaaS ecosystem.
Opportunity: Expanding market access and inclusivity in BPaaS solutions
The democratization of access in the BPaaS market heralds a new era of inclusivity and opportunity for diverse players. Smaller businesses now have access to cost-effective subscription models, user-friendly interfaces, and cloud-based delivery, expanding the market segment and democratizing process optimization. Freelancers and solopreneurs benefit from BPaaS solutions tailored to individual needs, enabling them to manage complex tasks like invoicing and customer onboarding efficiently. Additionally, micro-subscriptions cater to their specific requirements, empowering the gig economy and enhancing personal productivity. Non-profit organizations also stand to gain, as BPaaS streamlines critical operations such as donor management and volunteer coordination, allowing them to maximize impact and optimize resources effectively.
Challenge: Challenges integrating BPaaS with existing systems
Integration complexities profoundly restrain the BPaaS market. The challenge arises from incompatible systems, including outdated technologies and proprietary formats, which complicate integrating existing on-premise systems and cloud services. This disparity necessitates costly customization efforts and impedes smooth data flow. Moreover, implementing BPaaS requires specialized technical expertise, draining internal resources and posing financial burdens, particularly for smaller businesses. Additionally, hidden costs emerge from the intricacies of integration, such as data migration and ongoing maintenance, undermining the perceived cost-effectiveness of BPaaS and dissuading potential investment. These complexities underscore the formidable barriers hindering widespread adoption and smooth integration of BPaaS solutions within businesses.
BPaaS Market Ecosystem
Based on Business Process, the Accounting & Finance segment will grow significantly during the forecast period.
BPaaS plays a significant role in accounting and finance. It enables organizations to significantly reduce costs by outsourcing tasks like payroll processing, accounts payable, and financial reporting. Scalability is another critical driver, allowing businesses to adjust resources easily according to fluctuating demands. By leveraging BPaaS, companies gain access to specialized expertise without extensive training, thus fostering innovation and competitiveness. Moreover, by implementing robust systems and processes, BPaaS facilitates risk management and compliance. Technological innovation, particularly in cloud computing and AI, further enhances efficiency and accuracy in financial operations. Additionally, BPaaS accommodates the growing trends of globalization and remote work, enabling organizations to tap into global talent pools and adapt to evolving work environments. BPaaS transforms accounting and finance functions, offering a cost-effective, flexible, and technologically advanced solution to organizations worldwide.
Based on Vertical, the government & public sector segments will grow significantly during the forecast period.
BPaaS is pivotal in modernizing operations, improving service delivery, and enhancing citizen engagement in the government and public sector. Government agencies can reduce costs, increase efficiency, and focus on strategic priorities by outsourcing non-core functions such as procurement, human resources, and financial management to BPaaS providers. BPaaS solutions enable governments to streamline bureaucratic processes, enhance transparency, and meet the evolving needs of citizens in the digital age. Furthermore, BPaaS helps governments leverage emerging technologies such as blockchain and IoT to address societal challenges, enhance cybersecurity, and deliver innovative public services. BPaaS empowers the government and public sector to become more agile, responsive, and citizen-centric in operations and service delivery.
By region, North American BPaaS market will grow at the highest market size during the forecast period.
The BPaaS market in the United States is experiencing significant growth, fueled by several factors. Companies are increasingly opting for cloud-based solutions, making BPaaS more accessible and scalable. BPaaS solutions are incorporating automation and AI to streamline processes, improve accuracy, and free up human resources for more strategic tasks. The US market is dominated by large players like SAP SE, Oracle Corporation, IBM, and Accenture, but smaller niche providers are also gaining traction. Specific BPaaS solutions like HR BPaaS and Finance & AccountingBPaaS are experiencing particularly strong growth. Security and data privacy concerns remain key challenges for the BPaaS market, but vendors are increasingly focusing on compliance and robust security measures. Companies like CGI, EXL, and TELUS International cater to specific industry needs within Canada. Canadian government agencies are increasingly exploring BPaaS solutions for efficiency and cost savings. Toronto, Montreal, and Calgary emerge as key BPaaS hubs, but regional growth is also occurring. Overall, the North America BPaaS market exhibits steady growth potential with unique dynamics shaped by regional regulations, industry focus, and government involvement. Addressing challenges like talent acquisition and data security will be key to unlocking further market expansion. These factors drive the growth of BPaaS market in North America.
Key Market Players
The BPaaS market is dominated by a few globally established players such as Accenture (Ireland), Capgemini (France), Cognizant (US), IBM (US), TCS (India), HCL (India), Fujitsu (Japan), Genpact (US), Wipro (India), Tech Mahindra (India), EXL (US), DXC Technology (US), Conduent (US), Infosys BPM (India), Bizagi (US), among others, are the key vendors that secured BPaaS contracts in last few years. These vendors can bring global processes and execution expertise; the local players only have limited expertise. In the thriving BPaaS market, the Cloud Adoption Boom is pivotal in reshaping business processes. Companies leveraging cloud-based solutions, BPaaS capitalizes on several advantages.
Scope of Report
Report Metrics |
Details |
Market Size Available For Years |
2018–2028 |
Base Year Considered |
2022 |
Forecast Period |
2023–2028 |
Forecast Units |
Value (USD Million/Billion) |
Segments Covered |
Business Process, Deployment Model, Organization Size, and Vertical |
Regions Covered |
North America, Europe, Asia Pacific, Middle East & Africa, and Latin America |
Companies Covered |
Accenture(Ireland),Capgemini(France),Cognizant(US),IBM(US), HCL(India), TCS(India), Fujitsu (Japan),Genpact(US),Wipro(India),Tech Mahindra(India), EXL(US), DXC Technology(US), Conduent(US),Infosys BPM(India),Bizagi(US) |
This research report categorizes the BPaaS market to forecast revenue and analyze trends in each of the following submarkets:
By Business Process:
-
Human Resource Management
- Payroll Processing
- Employee Onboarding
- Benefits Administration
- Others
-
Accounting & Finance
- Accounts Payable
- General Ledger
- Financial Reporting
- Others
-
Sales & Marketing
- Lead Generation Services
- Customer Relationship Management (CRM) Services
- Others
-
Customer Service & Support
- Call Center Operations
- Help Desk Support
- Ticket Management
- Others
-
Procurement, Supply Chain Management & Operations
- Vendor Management
- Purchase Order Processing
- Inventory Optimization
- Distribution And Logistics
- Others
- Other Business Processes
By Deployment Model:
- Public Cloud
- Private Cloud
- Hybrid Cloud
By Organization Size:
- Large Enterprises
- Small And Medium-Sized Enterprises
By Vertical:
- BFSI
- IT & Telecom
- Manufacturing
- Retail & E-commerce
- Healthcare & Life Sciences
- Government & Public Sector
- Other Verticals
By Region:
-
North America
- United States
- Canada
-
Europe
- United Kingdom
- Germany
- France
- Italy
- Rest of Europe
-
Asia Pacific
- China
- Japan
- Australia and New Zealand
- Rest of Asia Pacific
-
Middle East & Africa
-
GCC
- Saudi Arabia
- UAE
- The rest of the GCC Countries
- South Africa
- Rest of the Middle East & Africa
-
GCC
-
Latin America
- Brazil
- Mexico
- Rest of Latin America
Recent Developments:
- Accenture launched the Accenture Gen AI Services suite of specialized services to assist companies in customizing and maximizing the value of generative AI. These services include a proprietary "switchboard" feature, allowing users to select the most suitable AI models based on cost, accuracy, or business context. Additionally, Accenture offers customization techniques for large-language models (LLMs), along with managed services for ongoing refinement and training.
- Capgemini and Microsoft collaborated to introduce the Azure Intelligent App Factory to accelerate generative AI implementations for businesses across various industries. This collaboration uses industry-specific digital platforms and Microsoft Cloud technologies to scale AI capabilities responsibly and sustainably. The solution, comprising Digital Industry Platforms, Industry Assistants, and Intelligent App Delivery Teams, aims to streamline AI investments, drive tangible business outcomes, and ensure compliance with security and industry standards.
- Accenture acquired the SKS Group, a consulting firm renowned for its expertise in assisting banks across Germany, Austria, and Switzerland. It helps to modernize their technology infrastructure and meet regulatory requirements through SAP S/4HANA solutions. This strategic move bolsters Accenture's SAP and regulatory capabilities for banking clients in the region, enhancing its technology, consulting, and regulatory services portfolio. The acquisition also strengthens Accenture's ability to cater to specialized banks, including national promotional banks supporting local businesses and communities with financial and development assistance.
Frequently Asked Questions (FAQ):
What is BPaaS?
BPaaS stands for Business Process as a Service. It refers to delivering various business processes through cloud-based platforms, such as human resources, finance and accounting, customer service, procurement, and supply chain management. BPaaS providers offer these services on a subscription basis, allowing businesses to outsource their operational processes and access scalable and efficient solutions. This model enables organizations to streamline operations, focus on core competencies, and adapt to changing market dynamics without significant upfront investment in infrastructure or personnel.
Which country was the early adopter of BPaaS solutions?
The US was at the initial stage of BPaaS solutions.
Which are the key vendors exploring BPaaS Solutions?
Some of the significant vendors offering BPaaS solutions across the globe include Accenture (Ireland), Capgemini (France), Cognizant (US), IBM (US), HCL (India), TCS (India), Fujitsu (Japan), Genpact (US), Wipro (India), Tech Mahindra (India), EXL (US), DXC Technology (US), Conduent (US), Infosys BPM (India), Bizagi (US).
What is the total CAGR recorded for the BPaaS market during 2023-2028?
The BPaaS market will record a CAGR of 8.0% from 2023-2028.
What is the projected market value of the BPaaS market?
The BPaaS market will grow from USD 63.3 billion in 2023 to USD 92.2 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 8.0% during the forecast period. .
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This research study involved the extensive use of secondary sources, directories, and databases, such as D&B Hoovers, Bloomberg Businessweek, and Factiva, to identify and collect information useful for this technical, market-oriented, and commercial study of the BPaaS market. Along with that, a few other market-related sources, such as journals including the Journal of Internet Services and Applications (JISA) and Institute of Electrical and Electronics Engineers (IEEE) Transactions on Services Computing, white papers, and associations, such as Central and Eastern European Outsourcing Association (CEEOA) and Association of Business Process Management Professionals (ABPMP), were also considered while conducting extensive secondary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. After that, we used the market breakup and data triangulation procedures to estimate the market size of the various segments in the BPaaS market.
The market has been predicted by analyzing the driving factors, such as the emergence of cloud computing, the growing need for cost-effective businesses, and the need for business agility and faster time to market.
Secondary Research
The market size of companies offering BPaaS was derived based on the secondary data available through paid and unpaid sources, analyzing the product portfolios of major companies in the ecosystem, and rating the companies based on their product capabilities and business strategies. In the secondary research process, various sources were referred to to identify and collect information for the study. Secondary sources included annual reports, press releases, investor presentations of companies and product data sheets, white papers, journals, certified publications, articles from recognized authors, government websites, directories, and databases.
Primary Research
In the primary research process, we interviewed various primary sources from both the supply and demand sides to obtain qualitative and quantitative information on the market. The primary sources from the supply side included various industry experts, including Chief Experience Officers (CXOs); Vice Presidents (VPs); directors from business development, marketing, and product development/innovation teams; related vital executives from BPaaS vendors, industry associations, and independent consultants; and key opinion leaders.
We conducted primary interviews to gather insights, such as market statistics, the latest trends disrupting the market, new use cases implemented, data on revenue collected from products and services, market breakups, market size estimations, market forecasts, and data triangulation. Primary research also helped in understanding various trends related to technology, service type, deployment, and region. Stakeholders from the demand side, such as Chief Information Officers (CIOs), Chief Technology Officers (CTOs), Chief Security Officers (CSOs), the installation teams of governments/end users using BPaaS, and digital initiatives project teams, were interviewed to understand the buyer's perspective on suppliers, products, service providers, and their current use of solutions, which would affect the overall BPaaS market.
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Market Size Estimation
We used top-down and bottom-up approaches to estimate and forecast the BPaaS and other dependent submarkets. We deployed a bottom-up procedure to arrive at the overall market size using the revenues and offerings of key companies in the market. With data triangulation methods and validation through primary interviews, this study determined and confirmed the exact value of the overall parent market size. We used the overall market size in the top-down procedure to estimate the size of other individual markets via percentage splits of the market segments.
We used top-down and bottom-up approaches to estimate and validate the BPaaS market and other dependent subsegments.
The research methodology used to estimate the market size included the following details:
- We identified key players in the market through secondary research, and we determined the revenue contributions in respective regions through primary and secondary research.
- This entire procedure included studying top market players' annual and financial reports and extensive interviews for key insights from industry leaders, such as CEOs, VPs, directors, and marketing executives.
- All percentage splits and breakups were determined using secondary sources and verified through primary sources.
All the possible parameters that affect the market covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data. This data is consolidated and added with detailed inputs and analysis from MarketsandMarkets.
BPaaSmarket: Top-down and Bottom-up approaches
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Data Triangulation
After arriving at the overall market size, the market was split into several segments and subsegments—using the market size estimation processes as explained above. Where applicable, data triangulation and market breakup procedures were employed to complete the overall market engineering process and determine each market segment's and subsegment's exact statistics. The data was triangulated by studying several factors and trends from the demand and supply sides in the BPaaS market.
Market Definition
BPaaS stands for Business Process as a Service. It's a cloud-based service model that delivers business process outsourcing (BPO) functions over the internet. Essentially, it provides businesses with access to various business processes, such as human resources, finance, customer service, etc., as a service rather than requiring them to build and manage these processes in-house. This model allows companies to streamline operations, reduce costs, and focus more on their core business activities. BPaaS, like SaaS, is a packaged cloud solution. BPaaS is service-oriented; therefore, it requires well-defined interfaces to connect with other services. The business process layer sits on top. This makes sense because organizations employ software to establish and maintain business processes. SaaS aims to manage and abstract business processes so organizations can focus on their core businesses.
Key Stakeholders
- Technology Service Providers
- Cloud Service Providers (CSPs)
- Government Organizations
- Networking Companies
- Consultants/Consultancies/Advisory Firms
- Support and Maintenance Service Providers
- Telecom Service Providers
- Information Technology (IT) Infrastructure Providers
- System Integrators (SIS)
- Regional Associations
- Independent Software Vendors (ISVS)
- Value-added Resellers and Distributors
- Value-added Resellers and Distributors
Report Objectives
- To define, describe, and forecast the global BPaaS market based on business process, deployment model, organization size, vertical, and region in terms of value
- To forecast the market size of the five major regional segments: North America, Europe, Asia Pacific, Middle East & Africa, and Latin America
- To strategically analyze the market subsegments concerning individual growth trends, prospects, and contributions to the total market
- To provide detailed information related to the major drivers, restraints, opportunities, and challenges influencing the growth of the market
- To strategically analyze macro and micro markets concerning growth trends, prospects, and their contributions to the overall market
- To analyze industry trends, patents, innovations, and pricing data related to the BPaaS market
- To analyze the impact of the recession on business processes, deployment models, organization size, verticals, and regions globally
- To analyze the opportunities in the market for stakeholders and provide details of their competitive landscape for prominent players
- To profile key players in the market and comprehensively analyze their market shares/ranking and core competencies
- To track and analyze competitive developments, such as mergers and acquisitions, new product developments, and partnerships and collaborations in the market
Available Customizations
With the given market data, MarketsandMarkets offers customizations per the company's specific needs. The following customization options are available for the report:
Product Analysis
- The product matrix provides a detailed comparison of the product portfolio of each company.
Geographic Analysis
- Further breakup of the Asia Pacific market into countries contributing 75% to the regional market size
- Further breakup of the North American market into countries contributing 75% to the regional market size
- Further breakup of the Latin American market into countries contributing 75% to the regional market size
- Further breakup of the Middle Eastern & African market into countries contributing 75% to the regional market size
- Further breakup of the European market into countries contributing 75% to the regional market size
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Growth opportunities and latent adjacency in BPaaS Market
Gather insights into Contact -center, Accounts Payable Automation, BPM, market by country and segment in GCC, India and Africa , competition , pricing etc.
Need insights on solution-specifc BPaaS offerings
Understand the established BPaaS offerings by vertical/ horizontals and by specialist/niche players.
Indepth understanding of the Business Process Management.
Deep-dive understanding of the BPaaS offerings.
Analyse the trends of market in BPO/BPS.
Detailed understanding of the BPaaS.
Interested in BPaaS solutions and offerings available for the Banking and Financial Services (BFSI) sector.