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Australian Research Report Shows Global Expansion Main Driver for Business Process Outsourcing

IBM Business Process Outsourcing Report shows 71 percent of Australian organisations say global expansion most important driver and benefit of outsourcing

Sydney, Australia - 18 Apr 2012: IBM Australia (NYSE: IBM) and The Sauce, today published the first Australian BPO Report 2012 (ABPO Report), which investigates the current state of business process outsourcing in Australia and points to future trends. Global expansion is seen to be the key driver and benefit of outsourcing decisions amongst 71 percent of organisations surveyed. The report also showed significant anticipated growth in business process outsourcing activity among large organisations with between 1,000 to 5,000 employees (this constituted one-third of all respondents). This group of Australian organisations is expecting an increase of 20 percent over the next two years.

“The 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,” said Russell Ives, Director, Global Process Services, IBM Growth Markets.

“The report highlights that Australia’s senior business community are aware of the benefits of outsourcing and decision makers are looking towards higher order benefits such as improving financial flexibility, driving free cash flow, strengthening customer satisfaction, increasing market penetration, expanding into emerging markets and taking advantage of the opportunities with a global economy,” said Ives.

Most outsourced business processes

The report 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. Human Resources, and Printing/Document Management were found to be the most outsourced functions (15 and 18 percent), followed by Finance and Accounting (13 percent). In the next 12 to 24 months, HR outsourcing is expected to grow to 23 percent. 

Marketing and customer relationship management

Outsourcing of marketing processes including CRM (Customer Relationship Management) is predicted to grow by 21 percent within organisations that already outsource elements of this function. Of particular note is that online marketing is expected to nearly triple, growing from 6 percent to 17 percent, signalling major opportunities for organisations offering these kinds of services.

“CRM outsourcing services enables organisations to solve their complex customer-facing challenges by applying analytics-driven methodologies with measurable outcomes.  In some instances, implementing multi-channel support models that enable real-time monitoring of customer interactions can result in 15 percent improvement in customer satisfaction,” said Peter Monk, Partner and BPO Solution Leader, IBM.

Cloud computing and outsourcing

Another trend emerging in the outsourcing sector is the increased use of cloud services. A large number of organisations are now considering cloud computing (35 percent) when making the decision to outsource, yet a marginal proportion (15 percent) of organisations have 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.

Martin Conboy, President of the Australian Business Process Association and editor of The Sauce, comments: “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.”


About the Report

This Australian-first report jointly sponsored by IBM and Fuji Xerox Australia was produced by The Sauce and endorsed by the Australian Business Process and Outsourcing Association. The purpose of the report is to deliver intelligence around outsourcing in Australia in order to better understand the drivers, economic realities and why so many organisations in today’s business environment are choosing to outsource their non core business processes.

To download the Australian BPO Research 2012 Executive Summary visit http://www.ibm.com/bpoutsourcing/au

To download a full analysis of the BPO Research 2012 results visit:  http://thesauce.net.au/sauce-research/australian-bpo-research-report-2012-overview/ 

About The Sauce

For more information about The Sauce, visit www.thesauce.net.au

About IBM Australia

For more information on IBM Australia, visit www.ibm.com/au

About the Australian Business Process Outsourcing Industry

The Asia Pacific BPO industry is comprised of a large number of organisations across diverse operational services from animation to payroll processing and has an estimated value of over $6.4 billion per annum within Australia alone. Between 45% & 65% of Australian organisations engage in some form of business process outsourcing.

Contact(s) information

Simon Clark
Text 100 Australia
+61 2 9956 5733
+61 (0)422-152-021
simon.clark@text100.com.au

Le Tran
External Relations, IBM Australia
+61 (0)406-314-516

letran@au1.ibm.com

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