The business support services sector helps businesses by handling several key functions that are critical for their success. Outsourcing these business functions to a service provider enables businesses to focus on their core services while staying lean and efficient.
Business support services include consulting, logistics, SaaS (Software as a service), CRM, customer service, retention, acquisition, product help desk, technical support, HR/payroll services, and much more. In today’s marketplace, ensuring the proper execution of such business functions has become vital. Allowing experts in these areas to handle specific tasks greatly simplifies running a business.
- Business support services cover effectively all business-related services that can be outsourced.
- Companies in this sector have a bright outlook considering that it is ever more important to efficiently manage customer relationships, administrative work, and marketing in today’s digital world.
- With the transition from traditional systems to cloud-based solutions, previously resource-intensive tasks such as data management and hosting have become much easier to handle.
- Digitalisation and automation as services have significantly reduced operational costs; these are among the most in-demand support services.
- With companies wanting to keep their expenses to a minimum on the road to recovery after the pandemic, outsourcing services to specialised service providers will continue to remain a mainstay.
GLOBAL BUSINESS SUPPORT
SERVICES MARKET SIZE IN 2023
PROJECTED GLOBAL BUSINESS SUPPORT SERVICES MARKET SIZE IN 2027
[WORLDWIDE, BY MARKET CAP]
[THE UNITED STATES, BY REVENUE]
|Automatic Data Processing Inc.
- Salesforce Inc. (NYSE: CRM): Salesforce Inc. is a software company that enables businesses to keep up with customers and partners via cloud technology. It provides customer relationship management (CRM) software and sales, service, marketing and analytics applications and application development. It also offers various solutions that enable and simplify Enterprise Resource Management (ERP).
- Automatic Data Processing, Inc. (NASDAQ: ADP): ADP mainly provides human resources management software and payroll services. The company also offers time and attendance management services, retirement services, and insurance services. It supports clients in a wide range of industries such as hospitality, manufacturing, construction, retail, and healthcare.
- Concentrix (NASDAQ: CNXC): Concentrix is a business services company that specialises in improving customer experience and improving business performance. The company focuses on providing a high-quality digital customer experience. It also uses AI and cloud-based technology to help companies better connect with their customers.
- API Group (NYSE: APG): API Group is a business services provider of safety and speciality services. It provides statutorily mandated and other contracted services related to fire protection systems and life safety; it also provides industrial and speciality construction services.
- Snowflake Inc. (NYSE: SNOW): Snowflake is a data warehousing company. Its Data Cloud functions as a global network for organisations for data processing, data integration, and data analytics. Thus, organisations can not only connect to their own data but also to that of other businesses by sharing data on Snowflake’s platform.
- Growth in specific sectors: The outlook is bright for service providers in segments that will continue to rely on outsourcing. For instance, growth in manufacturing and the banking/financial sector, which together make up nearly 20% of Salesforce’s clientele, is likely to impact this company positively. Moreover, data from Black Book Market Research shows that 90% of leaders in the hospital industry are considering outsourcing their work to expert service providers. Thus, the upshot is that developments in certain specific sectors are likely to affect the business support services sector as a whole.
- Automation and data analytics: In today’s digital age, businesses seize every opportunity available to make processes more efficient and effective. Business support service companies (especially SaaS companies) are often at the forefront of using new-age technologies, such as RPA (robotic process automation) and data analytics. It has famously been claimed that data is the new oil. In a sense, data is a valuable resource that can be transformed into something that is useful to businesses. Automation and data analytics have the power to augment operational and decision-making processes; their increasing adoption is likely to help the sector as a whole grow.
- Cloud computing: Cloud computing has made it possible for businesses in this sector to outsource key functions without compromising on transparency. It has also helped reduce overheads and personnel costs, as it has made physical infrastructure (such as servers) and the associated staff unnecessary. Moreover, the cloud security market is expected to grow at an estimated 15% CAGR. Thus, early movers in this market should see excellent growth, propelling the sector upwards over the coming years.
- The growing demand for a great user experience: With every business trying to gain new customers through social media marketing systematically, customer acquisition and retention have become extremely competitive processes. Businesses are thus more willing to outsource them to specialised service providers who can execute them efficiently and provide an excellent experience for all stakeholders.
WHAT DOES THE FUTURE HOLD?
Outsourcing work to business service providers saves companies the costs of hiring and training skilled workers. With the post-pandemic economic recovery still in progress, the need to cut down on costs will continue to keep the demand for such services high in the near term.
In addition, businesses are increasingly focusing on outsourcing core business functions rather than non-core ones. In fact, many businesses are now going so far as to outsource their IT departments fully. This is not just to save costs but also to profit from the expertise of more experienced and skilled professionals. This trend is also likely to grow the business support services sector.
FinTech companies in this sector, such as Affirm, have begun using advancements such as machine learning algorithms, blockchains, and data analytics to improve their services. With more and more such companies using innovation to increase their competitiveness, the sector as a whole is likely to benefit.
Lastly, the need for cost efficiency, a continuously changing market landscape, and demanding customers are making companies upgrade their support functions and seek out leaders in the support services sector.
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