AI, cost pressures reshape BPM sector as growth slows to 5%
BENGALURU, INDIA — The global business process management (BPM) sector is navigating a pivotal transformation as economic headwinds and AI adoption redefine growth strategies.
While revenue expansion slowed to 4.5% to 5.5% in 2023 which is down from 7.5% to 8.5% in 2022, firms like Tata Consultancy Services (TCS), Infosys, and Wipro are leveraging automation and offshore shifts to maintain momentum—outpacing IT services’ sluggish 1.5% to 2% projected growth.
AI and automation drive efficiency amid economic pressures
Rajesh Ranjan of Everest Group notes the sector’s pivot to expertise-based labor arbitrage and deep domain knowledge, with TCS’s BPM division growing 8% in 2023 despite macroeconomic drags in tech and telecom.
Pure-play BPM firms, however, lagged Information Technology-Business Process Services (IT-BPS) hybrids, which grew 5.8% last year by bundling services.
The push for automation follows stark volume drops in cyclical sectors like customer experience management (CXM), where offshore shifts and demand slumps hit specialists hardest.
Offshore shift and integrated deals reshape landscape
As onshore workloads migrate offshore to cut costs, BPM giants are locking in large integrated contracts to sustain revenue. The top 50 players added just $5.6 billion in incremental revenue in 2023, with Infosys and Wipro ranking 30th and 31st globally.
IT-BPS providers capitalized on bundled offerings, while pure-play BPM firms grew at 4.8%, down from 7.5% in 2022.
The more than $300 billion global business process services (BPS) market now hinges on adaptability. Everest predicts 4.5% to 5% sector growth in 2025, nearly triple IT services’ rate, as firms like TCS merge AI, domain expertise, and labor arbitrage.
Yet, CXM struggles highlight the risks of over-reliance on cyclical demand—a gap diversified players aim to fill.
Wipro, TCS, and Infosys recently ranked #3, #8, #11, respectively, in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
