Record numbers, but not the kind everyone expected. The global technology services market posted its fastest growth on record in the second quarter of 2026.

Combined annual contract value rose 43 percent year on year to $42.4 billion, according to the latest ISG Index from Information Services Group, published on Nasdaq on July 9.

Business process outsourcing accounted for $2.3 billion. That was 34 percent higher than a year earlier, but 8 percent lower than in the first quarter, leaving the segment moving in two directions at once.

Why This Matters Now

Strip away the headline growth and the BPO data gets more interesting. ISG found the strength sitting in HR, facilities, supply chain management, and other industry-specific work.

Customer experience outsourcing, meanwhile, went the other way. Not a small detail. It tells you where enterprises are still comfortable handing off control, and where they’re pulling it back in.

A few things are driving that split:

• Boards have stopped asking “should we use AI” and started asking “where’s the return.” Providers now need to show it, not pitch it.
  
  
• Cost pressure hasn’t gone anywhere. Finance teams are consolidating vendor relationships instead of adding new ones.
  
  
• Talent is still tight. Manual scaling for claims processing or finance operations just isn’t realistic anymore for a lot of companies.
  
  
• Pricing conversations are shifting toward specific KPIs rather than headcount. Fewer people billed by the hour, more outcomes billed by result.

The Local Angle

Australia isn’t sitting this one out. The Asia Pacific ISG Index, also released this quarter, shows Australia and New Zealand (the region’s biggest outsourcing market) up 12 percent in Q2.

That snapped five straight quarters of decline. Local buyers are following the same pattern as the rest of the world: less appetite for generic labor contracts, more interest in providers who can point to actual automation results.

What Enterprises Are Actually Checking Before They Sign

Picking a BPS partner right now takes more than comparing rate cards. Buyers tend to circle back to the same handful of questions:

• Can this provider prove AI results with numbers, not slide decks?
  
  
• Do they understand the regulatory weight of insurance, banking, or healthcare workflows, or are they applying a generic playbook?
  
  
• Can they run hybrid onshore-offshore delivery at the scale this contract actually needs?
  
  
• Have they handled a client this size and this regulated before, with the audit trail to prove it?
  
  
• Is the pricing tied to outcomes, or is it still labor arbitrage wearing an AI label?

Who’s Positioned for the Shift

DXC Technology

DXC’s BPS footprint is one of the broader ones in the industry — a legacy of the 2017 CSC and HPE Services merger, now running across 70 countries with roughly 120,000 people serving 6,000 clients. 

The portfolio covers insurance BPaaS, banking BPO, contact center work, and finance and accounting services, built on AI, RPA, and cloud analytics.

About a fifth of the world’s property and casualty transactions run through DXC systems, and 21 of the top 25 insurers have stuck with the company long-term.

More detail on the BPS side sits at https://dxc.com/solutions/business-process-services.

WNS Global Services

WNS built its name as a specialist rather than a generalist — deep in insurance, banking, travel, and healthcare, with domain consultants working alongside AI-driven analytics rather than bolted onto it.

The company leans on outcome-based contracts tied to client KPIs instead of headcount billing, which lines up neatly with where more buyers say they want pricing to go.

Cognizant

Cognizant treats business process services less as a standalone line and more as an extension of its engineering and consulting work.

It’s put real money into generative AI tooling for claims, contact centers, and back-office finance, aiming at clients who want automation built into the transformation roadmap from day one rather than added on afterward.

Accenture

Accenture’s Operations division runs one of the biggest BPS practices in the world, pairing consulting-led transformation with managed services across finance, procurement, and customer operations.

Its existing consulting relationships give it an edge when bundling BPS into larger digital transformation deals — though clients typically pay for that scale at the premium end of the market.

The Bottom Line

A 34 percent year-on-year jump next to an 8 percent quarterly drop isn’t a contradiction so much as a market still working out its shape.

What is clear: money is moving toward providers who can back up AI claims with actual outcomes in specific, high-volume back-office functions. And it’s moving away from generic, labor-heavy contracts that no longer justify their price tag against what automation can now do.

Frequently Asked Questions

What drove the record growth in the overall tech services market?
ISG points mainly to enterprise demand for cloud services tied to AI ambitions — the combined market has now posted eight straight quarters of double-digit growth.

Why did BPO grow year on year but drop from the first quarter?
The annual comparison reflects the broader AI-driven momentum across the market. The quarterly dip is closer to normal fluctuation in large-contract timing, especially in customer experience services.

Which BPO functions are growing fastest right now?
HR, facilities management, supply chain management, and other industry-specific services, according to the ISG Index.

Is AI actually cutting BPO costs, or is that mostly marketing?
Some providers can back it up. Underwriting bots have reportedly cut processing times by up to 40 percent in financial services, though results shift a lot depending on the process and the provider.

How does outcome-based pricing differ from traditional BPO contracts?
It ties payment to specific KPIs (accuracy, turnaround time) instead of billing purely by headcount or transaction volume.