Global companies traditionally favour locations in the east like India and the Philippines as BPS destinations, due largely to the large pools of skilled, English-proficient workers and the labour arbitrage opportunities offered by the regions’ cost competitiveness.
However, South Africa’s BPS industry stakeholders have made significant efforts to develop and promote hubs of competency within the major economic regions of Gauteng, the Western Cape and Kwazulu-Natal. These efforts have yielded compelling results, with the local BPS industry growing 22% annually over the past four years, according to research by Everest Group, which is twice the global industry growth rate.
Read more in Mzansi Life
450,000-550,000 FTEs (30% of the existing BPM workforce in India) may need to be replaced by 2021 due to automation and changing skills needs
ADP remains No. 1, Teleperformance leaps two spots to No. 2 and Accenture retains No. 3 ranking among world’s largest third-party BPS providers
Everest Group, a consulting and research firm focused on strategic IT, business services, and sourcing, today released the fourth annual edition of “The Everest Group BPS Top 50™,” a ranking of the world’s largest third-party providers of business process services (BPS). The list was launched in 2015 as the first of its kind for the global industry, which today is valued at more than US$175 billion.
This year’s ranking is based on both revenues (75 percent of the composite score used for ranking) and year-on-year growth, whereas the previous years’ rankings were based solely on revenues. Growth has two sub-parameters: absolute growth (measured as change in BPS revenue in US$ million, and accounting for 12.5 percent of the composite score) and percentage growth (measured as percentage change in BPS revenue, and accounting for the final 12.5 percent of the composite score).
Everest Group estimates there are more than 200 service providers with more than US$50 million in revenues offering BPS services around the globe. What started as a cost optimization concept focusing on “non-core” and “back-office” business processes today permeates the entire business process value chain, addressing a wide variety of business objectives.
“The industry has attracted many service providers from a broad range of backgrounds and heritages,” said Rajesh Ranjan, partner at Everest Group. “As digital forces create a new paradigm of value creation and service delivery, we are seeing a widening gap among providers in their capabilities and market success. By incorporating growth as an additional factor, we are making sure that the ranking reflects this. We also expect both the list and the rankings within to see greater volatility in coming years as this industry experiences accelerated change.”
This list helps enterprises to identify the scaled-up providers and their functional coverage. It helps BPS service providers to compare themselves against others in the industry.
Topping the 2018 list of BPS providers are these 10 leaders:
- DXC Technology
- Arvato Bertelsmann
- The cumulative revenue of the providers in the BPS Top 50 list grew by 7 percent year-on-year.
- The highest growth rate for the past two years was logged by Alorica at 95 to 105 percent and was achieved largely through acquisitions in 2015 and 2016. Cognizant logged the second fastest growth rate at 22 to 25 percent and achieved this largely through organic growth.
- North America-based service providers continue to dominate the list; however, the region’s overall share has declined versus 2016 (54 percent share versus 56 percent), while the Rest of Europe’s share has grown (up from 14 percent in 2016 to 22 percent in 2017).
Top 3 North American Providers:
Top 3 “Rest of Europe” Providers (excludes UK providers):
- Arvato Bertelsmann
Top 3 APAC Providers:
- For the first time in three years, the number of specialist service providers increased their share of market as compared to broad-based service providers, driven by increases in the Contact Center Outsourcing (CCO) submarket. Broad-based providers now represent 56 percent of the market whereas specialists represent 44 percent. The top 5 broad-based providers are:
- DXC Technology
- Arvato Bertelsmann
- Among the specialist providers, the following ranked highest in their respective specialty area:
Human Resource Outsourcing:
Contact Center Outsourcing:
- Williams Lea Tag
- Iron Mountain
***Video: Watch “The Everest Group BPS Top 50 2018.***
The Everest Group BPS Top 50 is a global list of the 50 largest third-party provider BPO companies, based on their revenues (excluding public-sector focused services). Everest Group publishes this list every year based on the prior calendar year’s BPS revenues and growth
Why the BPS Top 50?
The global third-party BPS industry is valued at more than US$175 billion. Over the years, this industry has evolved significantly, both in breadth and depth of services. What started as a cost optimization concept focusing on “non-core” and “back-office” business processes, today permeates the entire business process value chain addressing a wide variety of business objectives. This list helps enterprises to identify the scaled-up providers and their functional coverage. It also helps BPS service providers to compare themselves against others in the industry
How is the BPS Top 50 determined?
There are two distinct steps involved in determining the Top 50: (1) Qualification – Only the 50 largest service providers, based on their BPS revenue, qualify for the BPS Top 50 assessment; (2) Rank determination – Service providers are ranked on the basis of overall BPS revenue and year-on-year growth. Growth has two sub-parameters: absolute growth (measured as change in BPS revenue in US$ million) and percentage growth (measured as percentage change in BPS revenue)
What you will find inside the BPS Top 50
The service provider’s annual revenue in US$ million, reported or estimated
Is the service provider growing? Is it a fast-growing, emerging provider? Or is it established but facing stagnant growth?
Key BPS Offerings
In what key BPS areas, horizontal and industry-specific, are the service provider’s offerings?
Everest Group 2018 BPS Top 50
BPS spending impacted by SDA can skyrocket to $10B by 2019 but will require a few kinks to be addressed.
The promise of next-generation benefits is powering explosive growth in the adoption of Business Process Service Delivery Automation (BPSDA), according to Everest Group, which reports that the number of BPS clients with SDA deployments rose by more than 80 percent year-on-year. SDA includes both Robotic Process Automation (RPA) and Artificial Intelligence (AI).
This growth in SDA is being driven not only by traditional drivers, such as efficiency and accuracy, but also by new-age drivers such as the need for enhanced customer experience.
“Increasingly, SDA is being used to enhance customer experience through much shorter response times for handling requests, round-the-clock availability, embedded intelligence, and reduced need to manually bridge gaps in technology,” said Rajesh Ranjan, partner at Everest Group.
However, although many more enterprises are adopting SDA, it is still rather nascent in the Business Process Services market today, says Ranjan. “Contrary to general belief, our data shows that the penetration and scale per BPSDA deployment is still quite low. One of the challenges is the mismatch between buyers’ expectations and reality, partly due to some inaccurate communication from service providers and automation vendors. However, the intrinsic benefits of SDA solutions, especially when combined with other digital components, the rising maturity of adopters and increasing sophistication of providers, suggest these issues will be addressed soon.”
As evidence of this low maturity of SDA, Everest Group points to the relatively meager amount of BPS spending on business processes where RPA has been applied. This amount is estimated to be US$700-800 million in 2016, or 2 percent of the addressable market, but it is expected to skyrocket in the future, reaching US$10 billion by 2019.
Another indicator that enterprises are barely scratching the surface of BPSDA’s potential is that a majority of current deployments (85 percent) involve Robotic Process Automation (RPA) only. Automation based on Artificial Intelligence (AI) is far away from widespread adoption.
These findings and more are discussed in Everest Group’s newly published report, “Business Process Services Delivery Automation (BPSDA)—State of the Market Report— 2017.” This report provides an in-depth view of the state of the BPSDA industry, offering a market overview, solution characteristics, an analysis of the service provider landscape, and recommendations for buyers and service providers on how to prepare for the future.
Other key findings:
- Finance and Accounting (F&A) and contact center emerged as the leading areas of application of SDA in BPS, followed by banking and insurance. The banking, financial services and insurance (BFSI) industry accounts for the majority of the clients with BPSDA deployments.
- Customer satisfaction with BPSDA is rather low, primarily because there is a mismatch between buyer expectations and reality. Also, many providers and buyers look at SDA in isolation and lose sight of the bigger benefits of digital transformation powered by not only SDA but also other digital levers such as cloud and analytics.
- Encouraging signs abound in the market. Awareness of SDA benefits is increasing, investments in advanced AI-based automation are rising, and recognition of the utility of models such as automation-as-a-service is growing.
- SDA is likely to significantly impact the BPS industry in the near- to medium-term along five dimensions – service provider revenue and margin; pricing model; shoring model; talent model; and contract composition.
- In the face of this disruption, enterprises should adopt a set of best practices to ensure success with BPSDA. Service providers must develop robust strategies to ride the wave of BPSDA disruption and back those strategies with smart investments.
***A complimentary 13-page abstract of the report is available for download here.*** (Registration required.)
Everywhere you turn today (ok, everywhere in the global services industry) you’ll hear talk of digital. And for good reason – if labor arbitrage had a rock-in-the-pond impact, digital could be a boulder. Which technologies are likely to have the greatest impact? And what do organizations have to do to maximize the benefits of digital for business outcomes?
The overall impact of digital on the BPM growth curve will be negative initially, driven by RPA. As other components mature and become pervasive, the tide will turn, and its impact will be positive.
The amount and timing of impact of next-generation technology levers on service providers varies by BPM segment; while some will be immediate and net negative, others can provide new growth opportunities