There are of course a few reasons for it but perhaps the single biggest reason is the migration of services into the cloud. SaaS has become a job killer for some BPO services and there is little doubt that the trend will continue.
One of the challenges the BPO industry faces is to put a numeric value on the exodus of services into the cloud and come up with a good estimate.
Gardner has done the work for the industry now. They have compiled a report which attempts to give a forecast as to what what % of revenue will be either lost or transferred to cloud services.
The report does a great job analyzing individual segments of the IT industry and providing estimates as to the $ amounts expected to be migrated.
The BPO industry is seen as the biggest loser. Out of the current 119 billion (market size in 2016) a whopping 43 % are expected to migrate into the cloud until 2020 - (Cloud Shift Rate)...making the BPO industry by far the biggest loser.
Of course, all that cloud business still needs to have operators and administrators....so the 43 % shift in revenues does not necessarily equate to a 43 % reduction in workload for the BPO providers.
However...given that any business which transfers into the crowd does ultimately so because they want to increase efficiencies (=save money)...there will be a noticeable impact on BPO providers.
Once the emergence of AI powered chat bots and NLP powered voice solutions are thrown into the mix...it becomes clear that the BPO industry should face some significant headwinds from here on out.