Global expansion is the main driver for Business Process Outsourcing (BPO) and also the key benefit for Australian businesses, with further significant growth in the BPO market anticipated over the next two years.
IBM and BPO industry publication, The Sauce, surveyed Australian businesses and organisations and found that 71 percent identified global expansion as the key driver and benefit, while many anticipated the BPO market would increase by 20 percent.
According to IBM global process services growth markets director, Russell Ives, the BPO report reflects the "rapid pace of change and maturity that the BPO industry has undergone over the last decade." "It has evolved from pure cost cutting, to improved efficiency, to strategic transformation and an important part of business strategy," Ives said.
The IBM report also highlights that while outsourcing decisions in the contact centre and customer service functions were by far the most widely reported, customer service functions are actually not among the top three of most outsourced activities. The top three most outsourced functions, in fact, are human resources, printing/document management (15 and 18 percent), followed by finance and accounting (13 percent). However, \in the next 12 to 24 months, HR outsourcing is expected to grow to 23 percent.
In addition, outsourcing of marketing processes including customer relationship management (CRM) is predicted to grow by 21 percent within organisations that already outsource elements of this function, with online marketing expected to nearly triple, growing from six percent to 17 percent, which IBM says signals major opportunities for organisations offering these kinds of services.
Ives says the survey also identified increased use of cloud services as another emerging trend in the outsourcing sector, with a large number of organisations now considering cloud computing (35 percent) when making the decision to outsource, while only a marginal proportion (15 percent) of organisations already having adopted cloud computing at an enterprise level as part of their outsourcing strategy.
The report highlights that increased mobility and cloud will create a ‘free agent’ revolution in service outsourcing as the ability to work from almost anywhere in Australia becomes possible using remote mechanisms. This is particularly relevant for the mining industry which operates over vast distances. In these scenarios, the value of Cloud services is even greater when it can be tailored to accommodate the unique elements of a particular industry.
According to Martin Conboy, president of the Australian Business Process Association and editor of The Sauce, there is tremendous pressure on companies from shareholders to "reposition their capital in their business, change the make-up of their balance sheets and move to an operating expense environment."
"Interestingly, we are seeing different types of outsourcing opportunities being requested by Australian organisations particularly for non-voice back office projects. By and large they want access to skills not readily available in Australia and this allows them to focus on their core competencies and support their specialist higher level employees in Australia," Conboy said.
Posted by Veronica Silva Cusi, news correspondent
Published: Tuesday, April 17, 2012
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