Business Process Outsourcing - Estonia

Revenue in the Business Process Outsourcing market is projected to reach US$73.54m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.19%, resulting in a market volume of US$94.70m by 2029.
The average Spend per Employee in the Business Process Outsourcing market is projected to reach US$97.45 in 2024.
In global comparison, most revenue will be generated United States (US$146.30bn in 2024).

Definition :
The Business Process Outsourcing (BPO) market refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers). A distinction is made between horizontal and vertical outsourcing. Horizontal BPO combines function-centric as well as cross-sector and cross-industry services, such as human resources management or payroll accounting. Vertical BPO, on the other hand, focuses on specialized services and is especially appealing to customers from the financial services industry, the healthcare sector, the manufacturing industry, or the retail sector.

Additional Information:

The Business Process Outsourcing market comprises revenues, revenue change, average spend per employee, and the market shares of the different business sectors. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include Accenture, Cognizant, Wipro, and IBM.

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Back office process outsourcing, such as Genpact, Concentrix, HCL Technologies, Sutherland Global Services, EXL Services, Remote Coworker, and TechSpeed
Front office process outsourcing, such as IBM Global Services, Hewlett Packard Enterprise (HPE), Sitel Group, Teleperformance, and Qualfon

Application outsourcing, such as ScienceSoft, Arcanys, and SumatoSoft
Administration outsourcing, such as Conduent, Genpact, and ADP (Automatic Data Processing)
Infrastructure outsourcing, such as IBM Global Technology Services, Wipro Infrastructure Engineering, and Cognizant Infrastructure Services

Business Process Outsourcing (BPO) has been a growing industry in Estonia, with a steady increase in demand from both domestic and international clients. This growth can be attributed to various factors, including favorable government policies, a skilled workforce, and a strategic location.

Customer preferences: Customers in the BPO market in Estonia are increasingly looking for providers that can offer a wide range of services, including customer service, technical support, and back-office operations. There is also a growing demand for providers that can offer multilingual services, particularly in languages such as English, German, and Russian. Additionally, customers are looking for providers that can offer customized solutions that are tailored to their specific needs.

Trends in the market: One of the key trends in the BPO market in Estonia is the increasing adoption of automation and artificial intelligence (AI) technologies. This trend is driven by the need to improve efficiency and reduce costs. Providers are investing in technologies such as chatbots, machine learning algorithms, and robotic process automation (RPA) to automate repetitive tasks and improve the accuracy of data processing.Another trend in the BPO market in Estonia is the growing popularity of nearshoring. This trend is driven by the desire to reduce costs while still maintaining a high level of quality. Estonia's proximity to Western Europe, combined with its lower labor costs, makes it an attractive destination for companies looking to outsource their operations.

Local special circumstances: Estonia has a highly skilled workforce, with a large pool of talent in areas such as IT, engineering, and finance. The country's education system is also highly regarded, with a focus on science, technology, engineering, and mathematics (STEM) subjects. This has helped to create a workforce that is well-suited to the needs of the BPO industry.In addition, Estonia has a favorable business environment, with a low corporate tax rate and a streamlined regulatory framework. This has made it an attractive destination for foreign investors looking to set up operations in the country.

Underlying macroeconomic factors: Estonia's economy has been growing steadily in recent years, driven by a strong export sector and a favorable business environment. This has helped to create a stable economic environment that is conducive to the growth of the BPO industry.Another factor that is driving the growth of the BPO industry in Estonia is the country's strategic location. Estonia is situated at the crossroads of Northern and Eastern Europe, making it an ideal location for companies looking to serve clients in both regions. This has helped to attract a number of multinational companies to the country, which in turn has helped to drive demand for BPO services.

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Technology market, in a PDF format.

Unseen yet omnipresent, Information Technology (IT) services are the invisible gears driving modern organizations. These services support business operations and digital transformation through outsourcing, managed services, security, data management, and cloud computing. By leveraging these services, companies enhance efficiency, reduce costs, and gain competitive advantages in a digital marketplace. Prominent cloud providers worldwide include Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba Cloud. In the managed services sector, Oracle, Accenture, and IBM are among the largest providers globally.