Australian Industry Acceptance for Legal Process Outsourcing

LPO (Legal Process Outsourcing) refers to the practice of corporations or law firms obtaining legal support services from an outside law firm or legal support solutions company, operating in a low cost location such as India or the Philippines. As opposed to other areas of outsourcing, Australian industry and organisations have been slow to accept the outsourcing of legal processes…more

Major BPO Player Spreads Its WIngs to Drive Growth

Aegis, a global outsourcing services company and part of the Essar Group, announced that it has been ranked fourth amongst top business process outsourcing (BPO) players in India, in a recent survey by Dataquest…more

400 New Jobs as Vertex Establishes HQ in Melbourne

Job opportunities in Victoria’s information and communications technology sector received a timely boost this week with global technology and business services giant Vertex deciding to establish its Asia Pacific Headquarters in Metropolitan Melbourne and expand its operations, creating another 400 jobs. Vertex is a leader in BPO, Customer Management Outsourcing and IT Services…more

Indian Domestic BPO Services Earnings Expected to Reach $1.6 Billion

Gartner forecasts India’s revenue from domestic BPO services will reach US$1.6 billion in roughly four years. Based on the industry’s growth percentage in 2009 and 2010, it will reach US$683 million this year, from last year’s US$521 million, and will maintain its growth rate until 2014…more

Threat Still Looms Over IT Outsourcing

The performance of the global outsourcing industry seems to be looking up, but when it comes to IT outsourcing, it’s quite a different matter. According to the most recent study by Everest Research, IT outsourcing contracts for the second quarter of this year fell to 46 per cent. The total value of contracts fell to $1.5 billion for June 2010 from $2.8 billion in March 2010…more

Ghana Hosts BPO Summit for Western Africa Region

The IT Enabled Services Secretariat (ITES) of Ghana is hosting its first major regional business process outsourcing summit, to be held at the La Palm Royal Beach Hotel in Accra…more

LPO (Legal Process Outsourcing) refers to the practice of corporations or law firms obtaining legal support services from an outside law firm or legal support solutions company, operating in a low cost location such as India or the Philippines. As opposed to other areas of outsourcing, Australian industry and organisations have been slow to accept the outsourcing of legal processes.

Maurie Dobbin, Director and co founder of outsourcer Legal Resources, admits that the going was tough, “When we first setup business the level of acceptance in Australia was very low, we received most of our initial enquiries from the United States. It’s only now that the industry is receiving the recognition that it deserves.”

As well as issues concerning security and confidentiality, people questioned the ethical and professional standards of lawyers in the different outsourced locations. Even though India has exactly the same legal foundations as Australia, “We experienced a lot of prejudice in terms of the perceived professionalism of lawyers in India. People questioned the ability of Indian lawyers to evaluate documents in line with Australian regulatory requirements”, Dobbin adds.

LPO providers offer services in the areas of document review, legal research and writing, drafting of pleadings and briefs, and patent services outsourcing.

According to research conducted by Evalueserve, there were over 5,200 professionals in the LPO industry, as on April 2010, in India and the Philippines, contributing an annual revenue of USD 300 million, and this is expected to reach 18,000 professionals with an annual revenue of USD 960 million by December 2015. The recent recession made businesses very conscious about cost and finding ways to reduce operating expenses. Organisations also have greater faith and sense of security in LPO. “These days with the way electronic document review is managed you can have all the security you need. There is no down side or risk that can’t be managed.”

As with other forms of outsourcing, a key benefit that can be delivered to an organisation by LPO is cost. Dobbin highlights that a lot of mundane legal work, such as reviewing documents, is passed onto paralegals to perform. He says, “ Australian organisations can pay up to $150 – $200 an hour for a paralegal. By outsourcing this work, and depending on the size of the project, you will be paying half the amount for the services of a fully qualified lawyer.”

The type of organisation, according to Dobbin, that has most to gain from an LPO arrangement is a large trading enterprise that needs to manage a lot of contracts or legal forms. Most of the work is mundane reviewing, which can easily and securely managed offshore. Legal extraction is another area that is gaining in popularity. For example most property leases are very similar, its just the specific clauses that are different, these can easily be extracted and highlighted for negotiation purposes.

Legal Process Outsourcing is certainly here to stay and as Aussie companies become more familiar with its benefits and less concerned about the perceived risks, we should see greater adoption in the market.

Aegis, a global outsourcing services company and part of the Essar Group, announced that it has been ranked fourth amongst top business process outsourcing (BPO) players in India, in a recent survey by Dataquest.

The group has recently announced its acquisition plans in the Middle East, Europe, Latin America and Africa for the next two years.

Included in this is the recent acquisition of US student loan provider SLM Corp.’s call centre in Texas.

Furthermore, Aegis may close its US $45m purchase of 59% stake in Indian communications services company AGC Networks as early as this week. Earlier this year Essar acquired Avaya’s entire 59.13% stake in AGC Networks earlier known as Avaya Global Connect Ltd., a converged communication solution provider focused on the Indian and Australian markets.

The company sees this as a strategy to get into the systems integration business and offer their customers unified communication and experience management.

Commenting on the key trends to shape the Australian BPO industry over the next 2-3 years, local chief Denice Pitt, President of Aegis Australia said,” The macro-economic environment is getting tougher and there are strong indications the U.S. is heading back into recession. If that occurs the impact will be felt globally and Australia won’t feel the same level of insulation as we did first time around.”

Considering the current state of flux in the Australian political scene she remarked, “Governments can’t continue to provide stimulus so in order for private enterprise to maintain their earnings, cost reduction and cost management, not growth, is likely to become the primary focus for affected organisations. Domestically this will mean some key sectors that have been traditionally reticent to include outsourcing as part of their strategy, may begin to embrace it. Companies will get smarter with their sourcing mix and more will move work to where it’s best serviced for the lowest cost.”

Reflecting upon this change in emphasis of taking layers of expense out of the operating costs for Australian business Ms. Pitt remarked, “Companies are going to keep moving their customers to the web and self help channels in order to service their needs. We may even see other sectors adopt the travel industry approach of charging their customers a premium for using higher cost channels such as voice.”

Looking ahead at the shape of the Australian industry she commented, “In future, sustainably competitive organisations are unlikely to be locked into the old paradigm of outsourcing discrete pieces of work wrapped up in SLAs. Whilst everyone talks about innovation, unfortunately this model leaves little room for it. Organisations will realise a quantum leap in value when they allow themselves to partner with a provider in the development of their overall customer service and operational strategies. The service provider model is very mature now. The next paradigm shift is for vendors like Aegis to become a one-stop solution provider for clients, and we are already working with some key companies on this very model.”

Aegis is certainly growing quickly to the point where it has fast become one of the biggest players in the Australian BPO scene. With this rapid growth comes some pain. Needless to say one of the challenges is find people to man the pumps in a full employment economy. We asked Ms. Pitt about the companies recruitment strategies and what they do make themselves an attractive proposition to a labour pool that is currently spoilt for choice.

“Overall there’s no question that recruitment and talent management is a constant challenge”, she went on to say “One of the many strategies we have in play to address issues like retention is the decentralisation of our operations.”

“Bringing our centres closer to where our employees live has delivered considerable improvements in this area and is also impacting positively on engagement and performance.

Job opportunities in Victoria’s information and communications technology sector received a timely boost this week with global technology and business services giant Vertex deciding to establish its Asia Pacific Headquarters in Metropolitan Melbourne and expand its operations, creating another 400 jobs. Vertex is a leader in BPO, Customer Management Outsourcing and IT Services.

Victorian state Premier John Brumby announced that Vertex had chosen East Bentleigh for its Asia Pacific headquarters, bringing the number of full-time jobs created in Victoria with support from the Victorian Government to 2400.

“Victoria is the job-creating capital of Australia, generating more than 118,000 jobs since the start of the Global Financial Crisis two years ago,” Mr Brumby said.

Vertex’s jobs boost comes on top of the 600 jobs announced at the company’s new Ballarat (Rural Victoria and 1 1/2 hours from Melbourne) office in June – one of the largest-ever single job creating ventures in Ballarat’s history. Vertex supports 45 million consumers globally and operates across a wide range of market sectors and geographies delivering customer management and client based services.

Phil Allan, CEO of Vertex’s Asia Pacific operations, formerly known as Peripheral Computer Industries (PCI) said the company was confident in the long-term marketing potential that the Asia Pacific region had to offer. “Vertex is in an excellent position to capitalise on the opportunities offered in the Asia Pacific market and this investment in our new facility will enable us to recruit the talented people we need take advantage of this opportunity and further extend the company’s global reach,” Mr Allan said.

The Asia Pacific headquarters will provide IT and business services to multinational companies in addition to a variety of services from IT technical support, sales and marketing campaigns, project management and customer service.

Gartner forecasts India’s revenue from domestic BPO services will reach US$1.6 billion in roughly four years. Based on the industry’s growth percentage in 2009 and 2010, it will reach US$683 million this year, from last year’s US$521 million, and will maintain its growth rate until 2014.

According to the report, high economic growth, competitive pressure, agility, time to market, innovation and adoption across verticals and breadth of services will be driving the high growth rate in domestic BPO.

Arup Roy, senior research analyst at Gartner, shares, “IT services spending will continue to shift from discrete spending to outsourcing in 2010. New avenues of growth will open in the mid-market and in up-selling. The entry of new hybrid providers will blur the lines between product and IT services and the new offerings will be on a pay-per-use model.”

Also from the report, it is possible that verticals such as government, healthcare, retail, and utilities will soon take advantage of business process outsourcing services. Similar to the banking, finance, and telecommunications industries, said verticals also involve a great amount of transaction processing, which can be outsourced.

Majority of India’s domestic market is still made up of voice-based services, but BPO is on the rise. When more industries take advantage of BPO, the service lines within the sector will certainly grow.

The performance of the global outsourcing industry seems to be looking up, but when it comes to IT outsourcing, it’s quite a different matter. According to the most recent study by Everest Research, IT outsourcing contracts for the second quarter of this year fell to 46 per cent. The total value of contracts fell to $1.5 billion for June 2010 from $2.8 billion in March 2010.

Amneet Singh, Everest Group vice president, says, “IT outsourcing is more dependent on discretionary spending by companies; for example, to expand their operations. But BPO tends to be more basic. The growth in BPO outsourcing can be linked directly to the needs of companies to cut costs during the economic turmoil of the last two years. If you want to show an immediate reduction in costs, in two quarters or so, it is easier to do it by outsourcing business processes.”

New contracts in a quarter are used to predict revenue growth in the following quarters. According to the report, while the number of IT outsourcing contracts dropped in June quarter, the value of contracts for marketing-related BPO and HRO grew steadily.

The report identifies the drop of European contracts as a major cause for the declining revenue of the IT outsourcing industry. Many European countries are in serious economic trouble and this is being reflected in many markets not just IT Outsourcing. Compared to the second quarter of 2009, 41 per cent of European deals for both IT outsourcing and BPO dropped in the second quarter of this year.

The IT Enabled Services Secretariat (ITES) of Ghana is hosting its first major regional business process outsourcing summit, to be held at the La Palm Royal Beach Hotel in Accra.

The event is called Ghana Outsourcing Leadership Summit 2010, and it is scheduled for the 20th to the 21st of September. It is the first conference on outsourcing in the country and throughout the West African region.

With the theme, “Optimising Business Processes Through Outsourcing,” the conference will focus on recognising and how to realise objectives and goals to improve business operations with the help of outsourcing.

The summit will cover several topics such as current engagement models, global trends, best business outsourcing practices, the benefits of outsourcing, and emerging standards and capabilities.

Among the delegates will be top management and business leaders from different industries like banking, finance, telecommunications, oil and mining, airlines and international travel, and healthcare. Senior government sector officers throughout the region will also be in attendance.

An additional feature of the summit is an exhibition of outsourcing solutions, where BPO service providers, call centre and telecoms operators, and software developers and resellers will participate.

The Ghana government recognises the undeniable potential for jobs that the outsourcing industry has, and hosting the BPO summit is one of the ways of edging out their competitors to be the industry leader in the region.

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