What’s Next
Let’s look at Q1 performance for these three sectors and some of the key growth factors looking ahead:
Industry-specific BPO had a very strong first quarter with over $1 billion ACV. That has only happened three times in the history of the sector. Our buyer behavior data indicates that
60% of enterprises use in-house staff to run their industry-specific processes today. Examples include clinical trial support in pharma, financial crime compliance in banking and aftermarket services in manufacturing. Continued cost pressure could drive more enterprises to consider sourcing as an option for these processes, which could drive further growth for this segment of the market.
Customer experience had a $400 million quarter, which was flat Y/Y and very close to its historical average. Our buyer behavior data here indicates that key priorities for 2024 are improving customer satisfaction scores, first-contact resolution rates and customer retention rates, in that order of priority. Generative AI will play a big role here as enterprises experiment with using large language models to improve agent productivity first – and then – eventually –
deployment to end customers. Growth here will be driven by providers that can leverage AI to optimize costs and help their clients address one or more of their top three priorities.
And finally, in
finance and accounting, ACV was nearly $200 million, which was up 13% Y/Y and up double digits on its historical average. Deal volumes were also up, which is consistent with
what we discussed a few weeks ago around the idea that digital arbitrage will continue to reshape F&A outsourcing. The digitization of F&A processes is driving down prices and deal sizes, which will continue to drive up demand for more of these types of services, especially given current market conditions and the enterprise focus on cost optimization.
