Making the most of business process outsourcing statistics
“Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”
This quote, attributed to Aaron Levenstein, author and Professor of Business Administration, may have some truth to it but the circumstances of the quote are not known. While it is great to raise a laugh in a casual discussion, serious discussions normally take it to mean that one should not blindly follow what statistics tell us but make an effort to look at it in many different ways.
There is another popular example of a newspaper headline that said, “Half of British schools are below average.” An unthinking government functionary might rush to issue instructions to immediately set right these schools. But, look deeper, and you realize that it is a fact that will never change. Half the population will be below average and the other half above.
So, take it, but with a pinch of salt.
Statistics today is one of the major input providers for decisions taken by not only business corporations but governments as well. With the scale of businesses as well as that of government interventions growing, it would be an impossible task to understand what is going on.
Statistics can be defined as “The practice or science of collecting and analyzing numerical data in large quantities, especially for the purpose of inferring proportions in a whole from those in a representative sample.”
As an example, Apple, which sells millions of phones every year, cannot ask each and every user what they liked and disliked about their device. They ask a few people, and extrapolate those to be applicable to the population, glean insights into the behavior of users, and use it for basing future decisions on.
Similarly, business process outsourcing statistics act as a window into the BPO world. It provides us information about the world, and the aspects we are interested in, so that we can establish the efficacy of past decisions and base future decisions on.
Statistics pertaining to performance are made available to all clients by oWorkers in a transparent manner. It is, after all, considered as one of the top three BPO service providers in the world in its chosen area of data based services.
Aspects of business process outsourcing statistics
As with many other things today, the problem is more of plenty and not of inadequacy.
There is so much information that getting to the parts that could be relevant for you might be challenging. The information that is available is presented in a myriad different shapes and forms, by different agencies, each to primarily serve their own immediate interest. Hence, there are likely to be differences in the numbers.
While a Gartner study published in August 2019 might forecast the BPO industry to grow at a CAGR of 3.5% till 2023 over its then size of $154 billion, a Global Industry Analysts Inc. report published in August 2021 might project the industry to grow to a size of $215.9 billion in 2026 from $161.9 billion in 2020, translating to a CAGR of 5.2%.
And they both might be right in their own unique perspectives and definitions.
There are so many aspects to each industry, that to draw meaningful conclusions one needs to be clear what one is looking for.
- Do we want to see statistics by provider country or by country of outsourcer?
- Do we want to understand trends in outsourcing for different industries?
- Are we more interested in the human aspect; the impact of the industry on unemployment and in reducing disparity between the rich and poor?
- Are we interested in trends over a period or a point in time picture of a certain variable?
Moreover, industry associations are managed at national levels, defining policy, support and role. This could result in some differences from one country to another. While agencies that produce global reports do make an effort to include global data, there could be variations because of this aspect.
Hence, any study of business process industry statistics requires an initial effort in separating the grain from the chaff.
Ostensibly meant to create a secure environment for processing of client data, the ISO certifications (27001 :2013 & 9001:2015) and GDPR compliance that oWorkers has also equipped it to provide support in other areas. Statistics could be one of them.
Business process outsourcing statistics – emerging destinations
This article will focus on statistics pertaining to emerging BPO destinations that would be relevant to companies looking to outsource for the first time or looking to up their outsourcing budget.
As a destination for business process outsourcing, India has been much written about. Its scale in terms of population, as well as population that is both conversant with English and computer-savvy, has long kept it in a league of its own. The only nation that has matched India to some extent is the Philippines, which is now, and has been for many years, seen as the global call center and customer service hub.
We will attempt to go beyond these two giants of business process outsourcing and focus on the emerging destinations.
It must be kept in mind that the impact of the various variables eventually gets distilled into the pricing a vendor offers for a service. Many clients of oWorkers say they save close to 80% of their costs after engaging oWorkers. This is especially true of clients from Western Europe and the US.
Poland was one of the early movers when BPO started spreading its wings on the back of advancements in telecommunications technology and the internet. Its BPO industry dates back to the nineties, when the star of India as a BPO destination started shining.
Though Warsaw, Krakow and Wroclaw were the original favored destinations, the industry has expanded beyond and now covers Gdańsk, Poznań, Łódź, Lublin, Szczecin, Opole, Rzeszów, Gdynia, Częstochowa, and several others.
With a population of about 38 million and a literacy rate well above 99%, it is no surprise that it boasts of over 300,000 people employed in the BPO space who handle a wide variety of services from Finance and Accounting and Contact Centers to Logistics and Data Analytics for industries as varied as banking, technology, medical and others. It plays host to clients not only from Europe and North America but Asia too. With an employment rate under 70%, there is possibly room to scale up for BPO.
Even though talent is available, identifying and hiring the right resources remains a challenge for operators. oWorkers has been able to develop roots in the communities its delivery centers are located in, drawing a steady stream of job applicants. This enables oWorkers to choose the best candidates for its various client projects.
With an area of a little over 100,000 sq. km., population around 7 million and monthly gross wage of Euro 650, its business process outsourcing statistics make Bulgaria an unlikely contender in the BPO stakes, traditionally dominated by locations with a large population, multiple urban centers and low wages.
But it has emerged strongly with advantages that outweigh what on the surface may be limitations. Its membership of the EU creates a regulatory environment that inspires confidence in investors as well as clients’ evaluation location options. In addition, it probably offers amongst the lowest salary levels in the EU.
With well-established civic systems like power supply and transportation, it has no hidden costs, unlike other places where businesses need to cater to diesel-based electricity generating units and transporting staff to and from work. Its educational system which delivers a workforce of a quality far higher than many others.
According to the industry body AIBEST, more than 50,000 people were employed in BPO.
Approximately 80% of the working-age population has secondary or higher education, above the EU average. In 2019, there were 51,460 university and college graduates and Mathematics Informatics Gold Silver Bronze over 18,500 of them could be suitable employees for the sourcing industry.’
oWorkers pays competitive wages to attract qualified candidates for whom working in a BPO is an attractive option as the industry salary is higher than the average in the country and ensures a good standard of living. Through its center in Plovdiv in Bulgaria, oWorkers is able to provide multilingual support in 22 languages such as English, German, French, Italian, Spanish, Turkish, Dutch, Russian, Swedish, Polish, Portuguese, Romanian, Hungarian, Greek, and several others.
Situated at the confluence of Europe, Asia and Africa, Egypt can boast of a locational advantage like no other country. “Egypt’s foreign language skills, relatively competitive labor costs, and proximity to Europe, Asia Pacific, and the Middle East make it a prime contender to be the next outsourcing hotspot,” Mr. Kamal Nath Ex-Minister of Commerce and Industry, Government of India, had said more than 10 years back, before the Arab Spring.
It appears to have weathered the uncertainty around the 2011 uprising and is focused on improving its infrastructure to aid business. It continues to upgrade its telecommunications network and has one of lowest costs of living in the world.
Its people related business process outsourcing statistics tell us that Egypt has a population that is close to a hundred million, an established system of education with an estimated annual outturn of 500,000 graduating students from over 40 universities and 100 other educational institutions, Egypt has the building blocks in place that could rival India and the Philippines.
oWorkers in Egypt operates on East European Time (EET), which is UTC + 2 (with the offset for Daylight Savings) and shared with Estonia, Finland, Greece, South Africa, Romania, Bulgaria and several others. It enables daytime coverage of the entire set of clients from anywhere in Europe with an offset of only two hours, as well as the Arab world within a similar range on the other side. Its centers, including the one in Cairo, are equipped to support clients on a 24×7 basis.
With a population of 32 million and a literacy rate of over 98%, Malaysia is now a serious challenger to the traditional big boys of outsourcing, even though it is thought of as ‘underpopulated’ relative to its physical area, compared to other countries in the region. It is considered to be one of the most open economies in the world.
The educated, multi-ethnic workforce that makes up Malaysia, is ideally suited to grow a knowledge and services based economy. The annual production of graduates is about 135,000 which includes disciplines like Finance and Human Resources, popular choices for business process outsourcing.
It has a world class transportation and telecommunications system. Its capital Kuala Lumpur is a transport hub in the region. Several large corporations have chosen Malaysia to locate their shared service center, or at least one of them.
A number of clients of oWorkers are technology companies. While this keeps it on its toes and ensures they use the best solutions, it also gives them unfettered access to the latest technologies that can be deployed in client projects.
For some, Madagascar may be a surprising entry into this list.
But then, they would not know that Madagascar is the fourth largest island in the world, with an area that is larger than that of France.
Or that Madagascar, situated 200 miles off the coast of East Africa, is competing with established destinations like Morocco and Tunisia and winning business away from them and is increasingly being looked upon as a potential hub for activities in French.
It has a population of 28 million that is slated to double to 54 million by 2050. From the perspective of business process outsourcing statistics, 42.5% of the population is under 15. With a rapid growth to 54 million, the young population will also rise proportionately, making it a significant population of people of working age. Wages, at $130 per month, are amongst the lowest one can legally get almost anywhere in the world.
Madagascar already boasts some of the best internet speeds on the continent, a key enabler for BPO work. According to thehustle.co “With the fastest internet in Africa, Madagascar has grown to be a major player in the BPO sector for French-speaking markets” and “Madagascar has the fastest internet in Africa — even faster than some first world countries such as the UK, France, and Canada.”
Plugging into this fiber optic cable network, with quadruple redundancy in the form of Fiber, 4G, ADSL and satellite, allows oWorkers to offer efficient transaction processing to its clients out of its Madagascar BPO centers.
oWorkers believes in redundancy in physical infrastructure in its Madagascar BPO, so that client delivery is not hampered. With 2 electric generators on standby, they have adequate supply of power to meet all needs.
As always, business process outsourcing statistics might reveal a lot, but would still require the practiced eyesight of an experienced practitioner to seek out value from it. oWorkers continuously seeks value in a bid to create value for its clients. Look no further for your business process outsourcing partner.