Application Outsourcing Market Size
|Study Period||2018 - 2028|
|Base Year For Estimation||2022|
|Fastest Growing Market||Asia-Pacific|
|Largest Market||North America|
*Disclaimer: Major Players sorted in no particular order
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Application Outsourcing Market Analysis
The Global Application Outsourcing market is expected to grow at a CAGR of 5.32% during the forecast period, 2022-2027. The ongoing emphasis on customer retention and engagement, increased demand for BFSI, and rising digital transformation are driving the application outsourcing market.
- IT companies provide application outsourcing services to other companies to outsource their business operations. These services involve testing, designing, and production of business applications. The assistance includes application re-engineering, application maintenance, support, web portal development, and data migration.
- Third-party companies take care of the businesses by monitoring business functions to avoid the burden of doing that work. Moreover, cloud computing has made the job easier, as it is cost-effective. Various end-users like banking, retail, and others are already using these services, driving the growth of the application outsourcing market.
- Various companies are looking for strategic partnerships to enhance their products and services. For instance, in May 2022, IBM signed a strategic collaboration agreement with Amazon Web Services to deliver IBM Software-as-a-Service on AWS. The partnership between IBM and AWS will provide clients with quick and easy access to IBM Software that spans automation, AI and data, security and sustainability capabilities, is built on Red Hat OpenShift Service on AWS (ROSA), and runs cloud-native on AWS.
- Furthermore, companies globally are looking to enhance and innovate their products to provide services to a broader customer base. For instance, in May 2022, IBM enhanced its Global Data Platform to address the challenges related to AI adoption. As per the Global AI Adoption Index 2021, data complexity and data silos are the top barriers to AI adoption.
- The Covid - 19 pandemic has moderately impacted the application outsourcing market. Lockdown and adoption of work from home by many companies have affected the adoption of application outsourcing and workflow of enterprises.
Application Outsourcing Market Trends
This section covers the major market trends shaping the Application Outsourcing Market according to our research experts:
BFSI to have a significant share
- The growing base of new-age customers is compelling the banking, Financial Services, and Industrial Industry (BFSI) to redirect their efforts to provide a better customer experience. A minimal switching cost coupled with multiple players in the industry has made it easier for the customers to change their service providers easily. For higher customer retention and better profitability, the BFSI sector must offer its customers an engaging user experience and convenience. Technology-enabled solutions help companies deliver more accurate and personalized services and a superior customer experience.
- Fintechs may utilize big data to build thorough user-profiles and precise client segmentation strategies, allowing them to customize their services to their consumers' demands. Personalized services can be provided using advanced modeling approaches that take into account a person's risk perception, age, gender, financial circumstances, location, and, in some instances, relationship status.
- As per Crisil, the IT Industry will post a strong recovery with revenue growth of 11% in FY 2022. The recovery will be led by increasing outsourcing and accelerating digital transformation services, mainly in banking, financial assistance, insurance, retail, and healthcare. BFSI, which accounts for 28% of IT service revenue, will grow 13-14% in FY 2022.
- Major companies in the market are looking for strategic mergers and acquisitions to expand their global footprints. For instance, in January 2021, Tech Mahindra acquired Payments Technology Services for USD 9 million to expand its footprints in the BFSI sector. Payments Technology Services provides banking and payments solutions to financial services firms in Asia.
- Many players in the market are coming up with various product development and innovations to stronghold their market presence. For instance, in April 2022, IBM announced its IBM z16, a real-time AI for transaction processing at scale and the industry's first quantum-safe system. IBM z16 is specifically designed to help protect against near-future threats that might be used to crack today's encryption technologies.
- In May 2022, TCS announced its BaNCS Cloud product suite would enable financial services firms with cloud-native capabilities to accelerate digitization and drive their growth and transformation.
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Asia-Pacific is expected to show a significant growth
- The increasing demand for BFSI and the move toward digital transformation are expected to drive market growth in the region. The governments in the area are rigorously investing in digital transformation. For instance, the Ministry of Electronics and Information Technology (MeitY) has announced a budget outlay of INR 10,676.18 crore for the Digital India program, INR 6,388 crore in the last year's budget.
- The rising need for healthcare outsourcing results from increased spending on healthcare services, and the expense of government healthcare programs has shifted to healthcare sources. Numerous new multi-strength hospital projects have come up in the region, boosting the requirement for outsourcing.
- Also, Hospitals have begun to utilize third-party services to understand imaging results or records of doctor's case notes which are set to create a booming effect in the healthcare outsourcing market. As per the Ministry of Finance of the People's Republic of China, In 2021, total public expenditure on health care and hygiene in China amounted to about 1.92 trillion yuan.
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Application Outsourcing Industry Overview
The application outsourcing market is highly competitive, with several local and international players active. International participants operate in the countries through partnerships with local players. With the Market expected to broaden and yield more opportunities, more players will enter the market soon. Key players operating in the market include Wipro, IBM, and Accenture, among others. The recent developments in the market are -
- April 2022 - Tata Consultancy Services will combine its experience as a leading transformation partner for BFSI clients with its Microsoft Cloud for Financial Services solutions and its large talent pool of Microsoft-certified consultants to enable clients to innovate and reimagine their businesses to meet the evolving market, customer and regulatory needs.
- April 2022 - TCS has entered into a strategic partnership with payments Canada to transform its operations and help implement the Real-Time Rail (RTR). This new real-time payments system will allow Canadians to initiate payments and receive irrevocable funds in seconds.
Application Outsourcing Market Leaders
Tata Consultancy Services
*Disclaimer: Major Players sorted in no particular order
Application Outsourcing Market News
April 2022 - TCS extended its strategic partnership with SBI Cards and Payments Services Ltd. to transform its core cards sourcing platform and digitize a significant portion of the process. The future-ready, agile platform personalized customer experience and helped boost sales and retention.
April 2022 - TCS has been selected as a strategic partner of the United Kingdom's Financial Ombudsman Service to enhance and futureproof its digital services capabilities, help achieve its goal of preventing complaints and unfairness, and better serving and supporting its customers.
Application Outsourcing Market Report - Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increased demand from BFSI
5.1.2 Growing emphasis on customer retention & engagement
5.1.3 Move towards digital transformation
5.2 Market Restraints
5.2.1 Security & Privacy-related concerns
6. MARKET SEGMENTATION
6.1 By End-user Industry
6.1.2 Healthcare and Lifesciences
6.1.3 Media and Entertainment
6.1.4 Logistics & Transportation
6.1.5 Other Categories
6.2 By Geography
6.2.1 North America
126.96.36.199 United States
188.8.131.52 United Kingdom
184.108.40.206 Rest of Europe
6.2.3 Asia Pacific
220.127.116.11 South Korea
18.104.22.168 Rest of APAC
6.2.4 Latin America
6.2.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.7 IBM Global Services
7.1.9 NTT Data
7.1.10 ATOS SE
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
Application Outsourcing Market Research FAQs
What is the current Global Application Outsourcing Market size?
The Global Application Outsourcing Market is projected to register a CAGR of 5.32% during the forecast period (2023-2028).
Who are the key players in Global Application Outsourcing Market?
Accenture, Wipro Limited, Tata Consultancy Services, Capgemini and HCL are the major companies operating in the Global Application Outsourcing Market.
Which is the fastest growing region in Global Application Outsourcing Market?
Asia-Pacific is estimated to grow at the highest CAGR over the forecast period (2023-2028).
Which region has the biggest share in Global Application Outsourcing Market?
In 2023, the North America accounts for the largest market share in the Global Application Outsourcing Market.
Global Application Outsourcing Industry Report
Statistics for the 2023 Global Application Outsourcing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Global Application Outsourcing analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.