Business Process Outsourcing - Japan

Revenue in the Business Process Outsourcing market is projected to reach US$23.27bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 4.39%, resulting in a market volume of US$28.84bn by 2029.
The average Spend per Employee in the Business Process Outsourcing market is projected to reach US$336.40 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

The demand for Business Process Outsourcing (BPO) services in Japan has been on the rise in recent years.

Customer preferences: Japanese companies are increasingly outsourcing non-core business functions to reduce costs and improve efficiency. BPO providers offer a range of services, including finance and accounting, human resources, customer service, and IT support. Japanese companies are particularly interested in outsourcing IT functions, such as application development and maintenance, as well as data center management.

Trends in the market: One of the key trends in the BPO market in Japan is the growing adoption of automation technologies. BPO providers are leveraging robotic process automation (RPA) and artificial intelligence (AI) to automate repetitive and manual tasks, such as data entry and document processing. This not only improves efficiency but also reduces errors and frees up staff to focus on higher-value tasks. Another trend is the increasing use of cloud-based solutions, which offer greater flexibility and scalability compared to traditional on-premise systems.

Local special circumstances: One of the unique characteristics of the BPO market in Japan is the high level of service quality demanded by Japanese companies. BPO providers must adhere to strict quality standards and ensure that their staff are well-trained and knowledgeable about Japanese business practices. Additionally, language and cultural barriers can pose challenges for foreign BPO providers looking to enter the Japanese market.

Underlying macroeconomic factors: The Japanese government has been promoting the use of digital technologies to drive economic growth and improve productivity. This has created opportunities for BPO providers, particularly in the areas of IT and data management. Additionally, Japan's aging population and shrinking workforce have led to a shortage of skilled workers, making it more difficult for companies to handle non-core business functions in-house. Outsourcing these functions to BPO providers can help companies overcome these challenges and remain competitive.

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.