The Evolution Of Business Process Outsourcing In Australia

Business Process Outsourcing (BPO) is a growing trend in Australia and around the world. While many definitions exist, BPO can best be described as "the hiring of a geographically remote third-party service provider to handle a variety of business functions". Quite a mouthful, but you get the idea. 

2005-2010: Momentum Builds

In August of 2007 ComputerWorld conducted an interview with Anthony Seaegg, national chairman of the Australian Teleservices Association. Anthony predicted a "momentus time" coming in the "very near future" where Australian companies would truly embrace outsourcing.

One of the examples Anthony cited was the attrition in Australian call centres - the cost of replacing one person is estimated to be half their annual income. This stands in stark contrast to the Philippines where call centre and back-office jobs are considered careers.

CPA Australia members were surveyed in 2009 and 12% mentioned that their employer offshored finance and accounting activities. This was trumped by 15% of IT functions being outsourced. Marketing and sales as well as legal services came in at the bottom at 2%.

2012: A Fork In The Road

By the start of the decade the effects of BPO were clearly being felt in Australia. The Sydney Morning Herald (SMH) reported on major Australian banks actively hiring in Manila. One example cited was credit-risk officers in the Philippines being paid the equivalent of $5,000 to $7,800 a year versus $60,000 to $80,000 a year for an Australian staff member.

While Australia weathered the 2008 global financial crisis better than most other developed nations, it was obvious that to survive Australian businesses had to make some crucial choices. SMH quoted former Victorian premier Jeff Kennett as saying "I've long held the belief that in Australia we are pricing ourselves out of global markets".

That same year IBM released a report conducted by The Sauce BPO on Business Process Outsourcing in Australia. It revealed that over 70% of companies are looking for globalisation support, with more than 80% of organisations willing to outsource for up to 50% of cost savings. The report also highlighted that cloud computing would be a major driver to outsource for more than 40% of the organisations surveyed.

2015: The Future Is Now

Today many businesses face challenges in operating in a diverse and sometimes confusing international landscape. Recent technological advancements can make global business easier but finding the right BPO providers at the right price can be tricky. 

Nonetheless, it looks like BPO is here to stay. IbisWorld this year reports that the BPO industry in Australia grew 3.3% annually from 2010 to 2015 to a revenue size of $25 billion. The report cites over 26,000 businesses engaging in BPO and utilising "multiple back and front office functions".

In June the 18th Annual Australasian Shared Services And Outsourcing Week was held over 4 days with 75 speakers and 426 attendees. 61% of attendees acknowledged that their "operating structure is currently undergoing review" and 43% are now outsourcing. Sponsors slated for next year include the Malaysian Multimedia Development Corporation, indicating continued international interest in BPO activities in Australia.

Don't wait until it's too late. Speak to Team Wired and find out how you can benefit from a professional BPO provider.

Photo credit: Flickr/Reinis Traidas. Research credit: Computerworld/Richard Mills, Sydney Morning Herald/Matt Wade and Mark Hawthorne, CPA Australia, IBM, The Sauce BPO.