By Martin Conboy

The Australian Business Process Outsourcing Association (ABPOA) will be incorporated into the Association for Data-driven Marketing and Advertising (ADMA), the country’s largest marketing and advertising association, at the end of April.

Members of the ABPOA voted unanimously in late February to incorporate ABPOA into ADMA and create a new expert group. Catering for companies interested in outsourcing issues, the group will be named the Business Process Outsourcing Expert Group.

The BPO Expert Group will provide ABPOA with a sense of community and positioning within the ADMA organisation and framework.

ADMA will support the new expert group by providing the structure and resources for ABPOA to deliver on its mission and objectives, and to further the interests of its 50 corporate members.

The mandate of the BPO Expert Group will be to promote industry best practice, identify and respond to key industry issues and trends, provide thought leadership and networking opportunities.

ADMA, which has over 500 corporate members, currently runs 11 industry expert groups which focus on specific marketing specialisations such as multichannel marketing, big data, acquisition, retention and loyalty, B2B, agency and mobile.

“ADMA has a first-rate reputation and was one of the leading voices defending the industry against restrictive legislation and promoting best practice,” said ABPOA President Martin Conboy.

“ABPOA has grown from an idea to a membership organisation with over 50 corporate members. It had reached the stage where it needed to align itself with a bigger secretariat, so that the members can benefit from meeting and networking with all of the existing ADMA members,” he added.

ADMA CEO Jodie Sangster was delighted to welcome the ABPOA into the ADMA fold.

“We have some good experience in incorporating existing associations within our expert group structure and we look forward to representing this sector,” she said.

“We want to support the ability of our members to outsource business processes where it helps their businesses and to connect businesses that provide outsourcing services with those that want them.”

The incorporation approach will provide ABPOA with support through acquisition and retention of members. As well, the new expert group will be able to draw on the ADMA events team for assistance in events planning, ensuring focused and relevant events for their members in the process.

The new BPO Expert Group will determine the activities they wish to undertake which may include creating a code of practice, writing white papers or best practice guidelines on various topics, or undertaking content development, research or networking events. The ADMA secretariat will provide support and resources to help in delivering their annual plan.

To ensure the BPO Expert Group has a strong core base, which can be involved in facilitating the future of Australian business process outsourcing, ADMA is looking for eight current corporate members of ABPOA to commit to joining the expert group this year.

Members interested in participating should contact: Annette Bova, ADMA Membership Director, on 9277 5407 or annette.bova@adma.com.au.

By Martin Conboy

Outsourcing (which includes the terms BPO, shared services and a host of other industry classifications) is still one of the fastest growing and most dynamic industries in the world today. This growth and dynamism, however, has created a complex and fragmented market place that’s difficult for potential buyers to navigate.

Providers are merging, diversifying and constantly adding new services to their portfolios. It’s a challenge for buyers to keep up to date of who’s who in the market, what’s their value proposition, where are they located, and how to evaluate their different service offerings.

Peter Springett, Project Leader for theOutsourcing-guide.com, a new online directory and media service for the outsourcing industry, comments, “It’s hard for people to keep up with what’s happening in the marketplace. Players that were there one day are gone or have joined forces with someone else the next.”

“And traditionally people think of India or maybe the Philippines when they think of outsourcing or offshoring. But the reality is that there are numerous countries and regional economies out there with extensive industries established, offering a range of benefits and incentives.”

It’s a big world out there!

There is a multitude of service providers, many with specialist domain expertise, who are fighting to be heard in what is becoming a very crowded and sometimes shambolic marketplace. Up until now there has been no level playing field.

Quite often it’s a lottery trying to nail down who is who in the zoo. The market is sometimes chaotic and unstructured, and because of this uncertainty, there is always a flight to quality, a sensible choice but usually the most expensive.

When outsourcing, BPO and shared services first emerged in the nineties, the focus was purely on cost. Western corporations adopted a ‘shift and lift’ approach, shifting a section of their non-core business operations to a low cost location.

Current trends in the Industry

Outsourcing has evolved into a very sophisticated and complex art form. Price is no longer the only driver for organisations looking to outsource their business processes. They expect their outsourcing relationships to add strategic value.

Across the globe, companies are being stretched to offer superior customer service.  For many industries, as competition turns products and services into commodities, the ability to offer superior service, cost effectively is seen as a key differentiator.

To meet these expectations, service providers in the major markets are trying to maximise their productivity by establishing bigger centres to attain the resulting economies of scale. They are offering something called a “Pan Global Delivery Model”, where work is routed to the most cost effective location and where the required skills are located.

Crucial to the successful delivery of this model is technology. Rapid technological advance has gone hand-in-hand with the evolution of outsourcing. The Internet, cloud computing, social media, and a host of other technologies have not only created new industries and established new customer communication channels, they have made most of the work done by an organisation placeless. And if the work can be done anywhere then it can be done by anyone.

In the developed economies of North America, Europe and Australia it is getting harder and harder to find people able and willing to work in front office call centres or in back office outsourcing facilities.

And as costs for doing business continue to rise in these locations, particularly places like Australia, the resistance to sending work offshore is diminishing. It is hard to argue against transaction costs of US$0.50 compared to over US$4 per transaction in the US, Europe and Australia.

The challenges

Despite the growth, continuing maturity and growing professionalism of the industry, there are still a number of risks associated with outsourcing and off shoring. These may fall under the general categories of:

• Inadequate service provider infrastructure
• Quality of outsourcer personnel
• Inability to culturally assimilate with end user customers
• The operational transitioning process
• Hidden inefficiencies in the outsourcer’s environment or lack of experience by the outsourcer in the principle’s core market.

Making sense of it all

Seeing the gap in the market The Sauce and Word Labs  decided to ‘curate’ the market. In much the same way as a curater in a museum curates the artifacts and puts them into the relavant sections so that they are properly organised, assembled and easy to find.

TheOutsourcing-Guide.com aims to be a definitive straightforward compendium to the vast range of solutions and services available in the Global Outsourcing, BPO and Shared Services marketplace.

“The Outsourcing Guide will rapidly become the logical place to connect with both sides of the buy/sell equation. From novices to veteran campaigners it is the one location where you will find everything you wanted to know but were afraid to ask about outsourcing and shared services”, said Mark Atterby,  Editor of The Sauce (www.thesauce.net.au) one of the Joint Venture partners.

“Already as we are just softly rolling the site out , it is getting immediate traction from all over the world ‘ Said Sritharan Vellasamy, CEO &Founder of  Wordlabs Global, an Asian based publishing house and the other JV partner. www.wordlabs.com.my “What the outsourcing guide does is put all of the service providers in an easy to use compendium organised by category and type of service offered,” he continued.

Reconising that many countries have highly skilled and educated work forces that can be easily accessed via the internet and modern online collaberation tools , and the rise and rise of online employment platforms like freelancer.com, the guide will also breaks out by information by geographic locations and the various benefits offered by each distinct geographical location be it The Philippines, India, Australia, New Zealand, Malaysia, Mauritius, South Africa etc

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage outsourcing service providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

If you are interested in promoting your business or if you want to find a quality outsourcing service provider you should visit www.theoutsourcing-guide.com

It’s been a busy couple of weeks since our last edition.

There has been quite a bit of movement in the Australian market with Sensis and giant insurer QBE both announcing plans to move some of their business units to Asia. Even at a smaller level we have noticed a considerable uptick in outsourcing activity. In addition to the above major announcements,  TeleTech  also announced that it had won a  500 seat deal which it is believed will be serviced from the Philippines.

The research conducted by The Sauce in conjunction with IBM and Fuji Xerox last year indicated that there will be a 20% growth in the Australian market and this is being borne out by what we are seeing currently by way of outsourcing activity.

You can read about the stories below.

Late last week I dashed to Malaysia to attend a workshop that was being conducted by the Malaysian Development Corporation in conjunction with our business partner, Outsource Magazine. (Word Labs Malaysia) I have to say I was impressed with the approach taken by the Malaysian Development Corporation to coalesce its BPO players behind a common and united front. The industry in Malaysia is growing nicely and I draw your attention to the story below by Bernard Sia.

Sritharan Vellasamy & Martin Conboy in Malaysia on 1st March 2013

With our Malaysian partners we have developed a much-needed platform to make the international outsourcing marketplace more efficient. We haven’t officially launched the site, although we are getting a lot of visitors as the market on both sides of the buy-sell equation looks for ways to connect with each other.

We will of course be detailing the site in the very near future and if you want a sneak peek please visit www.theoutsourcing-guide.com

One of the really exciting areas that we will develop for the platform is a country location corner that will allow specific geographies to showcase their offerings to a global market. If you would like to know more and find out how the Outsourcing Guide can help your business please do drop us a line at  mconboy@thesauce.net.au   or Sritharan Vellasamy sri@wordlabs.com.my

Stellar, announced that they have selected Maroochydore at the Sunshine Coast in Queensland to host their new operations for the Australian Taxation Office (ATO).

As the fourth largest local government in Australia, the Sunshine Coast region provides a large, diverse labour catchment area and a robust economy to support the large scale operation. “I am looking forward to Stellar achieving great things here on the Coast, and the company will have our support all the way,” said Mark Jamieson, Mayor and Economic Portfolio holder.

Melissa Hamilton, CEO Stellar (Asia Pacific) recently said, “We are really proud and excited to be bringing so many employment opportunities to the Sunshine Coast. We’ve always been a big supporter of Queensland, with approximately 35% of Australian employees based in Queensland. We are excited to immerse ourselves into this vibrant and growing community.”

The contract is estimated to be worth $68 million over 5 years, with services commencing in January 2013.

Serco has successfully renewed its contract with the Australian Taxation Office (ATO) to provide contact centre services to Australian taxpayers, businesses and tax professionals on a diverse range of taxation and superannuation related issues.

Serco has been in partnership with the ATO for four years (previously operating as Excelior until Serco’s acquisition in 2011), providing trusted, quality services from three contact centres in Burnie, the Gold Coast and Box Hill. Serco employs 450 people who provide advice on a wide range of issues including tax file numbers, tax refunds, business activity statements, debt management, lodgment of returns and information in tax packs.

On average, the teams handle over a quarter of a million customer engagements each month, consistently meeting their performance targets for quality of service. In the last two months, six members of staff have been awarded ‘Gold Call’ status, the ATO’s highest accolade for this work.

The new five-year contract, effective as of 1 December 2012, has a value to Serco of approximately AUD$140 million, with two one-year extension options.

This achievement is testament to the hard work of our staff that ensures the existing services we provide on behalf of the ATO is of a very high standard. It is a strategically important business for Serco Global Services, underlining its capability in delivering key business processes in the Australian and global BPO market for customers in a wide range of fields.

Serco Asia Pacific Chief Executive David Campbell welcomed the news and said ‘I am delighted that the ATO has chosen to continue to work with Serco to provide a high-quality, value for money service to Australian taxpayers’.

‘In our work to date, we have demonstrated what we can do through effective management, customer focus and the efforts of our staff.’

Serco Global Services – AMEAA Chief Executive, Bhupender Singh, congratulated staff on the contract extension.

‘This latest success is further proof of Serco’s growing strength in the business process outsourcing market, both in Australia and globally. It shows the confidence governments in Australia and around the world have in the quality of Serco’s work and its people’.

THE BUSINESS Processing Association of the Philippines (BPA/P) will propose to the Commission on Higher Education (CHEd) the inclusion of a service management core subject in college.

The proposal comes as BPA/P and CHEd signed a memorandum of cooperation yesterday at Eastwood City, Libis to start a five-year partnership to revise college curricula, develop a training program for teachers and an assessment tool to determine a graduate’s readiness to enter the information technology (IT) and business process outsourcing (BPO) industries.

Noting the difficulty in finding qualified individuals to fill job openings in the industry, the group underscored human resource development as key to achieving the IT-BPO medium-term road map goals of generating $25 billion in annual export sales and creating 4.5 million jobs — 1.3 million directly and 3.2 million indirectly — by 2016.

“We believe that our partnership with CHEd will give a big boost to our efforts to tackle our number one challenge of improving the quantity and quality of our talent supply,” BPA/P Chairman Alfredo I. Ayala said on the sidelines of the memorandum signing.

“We do need help in developing human capital in the Philippines. At first, I was uneasy about pushing our college graduates to work in the BPO industry. But when I was introduced by the association to the broad nature of the BPO industry, I began to learn about opportunities the industry presents to our graduates in various fields,” CHEd Chairperson Patricia B. Licuanan told reporters.

“CHEd is throwing its full support behind the IT-BPO industry because we see this as a key long-term solution toward job creation and poverty alleviation. We are expecting that, through this collaboration, we can now give significantly more options to our future graduates so that they do not have to leave the country in order to win high-paying jobs where they can learn world-class skills.”

Under BPA/P’s proposal, colleges can incorporate a “BPO 101” in their core curriculum for all students, regardless of their specialization.

On top of this introductory subject, students can also make service management their minor course, said Martin Antonio S. Crisostomo, BPA/P external affairs executive director. Such students will be schooled in BPO culture, problem solving and other analytical skills, he added.

Source: BWorld Online

The Innovation Group is pleased to report two important new contracts in Australia — Contracts involve both the Group’s Software and BPO capabilities -

The Innovation Group plc (LSE: TIG.L), is pleased to announce that it has signed two new contracts in Australia, utilising the Group’s Business Process Outsourcing (“BPO”) and Software capabilities.

The first contract is a three-year software license agreement with one of Australia’s best known mid tier Property and Casualty Insurers. Under the terms of the agreement, the insurer will utilise the Group’s Innovation Insurer Suite software to implement multiple new lines of business and will also migrate a number of existing legacy systems on to the Insurer platform. This contract is the Group’s first sale of its entire Insurer Suite offering, which includes Claims, Analytics and Policy, also making it the first sale of the new Insurer Policy product. The agreement is expected to generate approximately AU$7.0m (£4.4m) in revenue over its three year period.

The second contract is a three-year software license and BPO agreement with the Australian arm of a global insurance company headquartered in the United States. As part of its agreement with this insurer, the Group will provide its Innovation Insurer Policy software to the insurer’s Australian arm via Software as a Service (“SaaS”) model, as well as hosting the software and providing application support. The Group will also provide the insurer’s Australian arm with outsourced services to support the administration of certain policy types sold through the insurer’s Australian distribution network. This contract, the first to combine Innovation’s software and BPO capabilities, is expected to generate between AU$2.0m and AU$4.8m (£1.25m and £3.0m) in Group revenue over its term, dependent on the volume of policies sold.

Welcoming both deals Andy Roberts, Chief Executive Officer of The Innovation Group added:

“This is excellent progress for us in Australia and for our Group as a whole. These successes validate our investment in the Insurer software platform, which is winning over new customers with its flexibility, capacity and speed of implementation. I am also pleased to unveil further evidence of our ability to win business that involves both of our key service lines. It is this combination of sophisticated software and highly capable service teams which, I believe, sets The Innovation Group squarely apart from its peers.”

Source: 4-Traders.com

2,300 employees from the UK, the US, China, Finland and India transferring from Nokia to Accenture.

IT consulting company Accenture and Finnish mobile maker Nokia have closed the agreement for Nokia to outsource Symbian software development and support activities to Accenture.

The agreement was originally announced on 22 June 2011, after Nokia announced that it will outsource its Symbian OS development along with some emplyees to Accenture.

With the closure of the agreemet, Accenture will provide Symbian-based software development and support services to Nokia until 2016 and also become the preferred supplier for Nokia in its transition to Windows Phone, said Accenture.

Accenture said under the agreement, approximately 2,300 employees from China, Finland, India, the United Kingdom and the United States are transferring from Nokia to Accenture.

Accenture Communications, Media & Technology operating group chief executive Marty Cole said Accenture is focused on growing their business in mobility and embedded software.

“We look forward to supporting Nokia in the execution of its strategy,” said Cole.

Accenture said it works with Avanade, a technology service company and focuses on Microsoft technologies, to provide further services to Nokia.

Source: Outsourcing BPO

PRESS RELEASE: Logica extends contract with Victorian Cytology Service

Logica Australia has announced that it has signed an extension to its contract with the Victorian Cytology Service (VCS) and will continue to provide support and enhancement work for the National Human Papilloma Virus Vaccination Program Register (NHVPR) on behalf of the Department of Health and Ageing (DoHA).

This three year and sevenmonth extension continues the partnership between Logica and VCS thatstarted three years ago when VCS was awarded the contract to build and run the register on behalf of DoHA. Under the agreement, Logica will continue to provide application hosting and management services.

The NHVPR system facilitates the capturing of consumer, provider and associated immunisation data for an initiative managed by the DoHA. This initiative provides ongoing immunisation against the Human Papilloma Virus (HPV) for school aged females.

Optus will supply Sydney Water with a range of fixed, mobile and managed telecoms services

By Hafizah Osman

Telco service provider, Optus Business, has signed a four-year managed services contract worth nearly $30 million to deliver whole-of-business telecommunications services to Australia’s largest urban water utility, Sydney Water.

The contract merges the telecommunication services delivery to Sydney Water from a multi-supplier to single supplier model.

Under the agreement, Optus will supply Sydney Water with a range of fixed, mobile and managed services.

This includes fixed and mobile voice and data carriage, Optus Evolve network connectivity for 67 Sydney Water sites, local and wide area network management, in-bound voice services to support contact centres and service management and maintenance.

The preliminary contract term is four years, with a condition to lengthen it for a further four years.
Systems integrator, Dimension Data, will be partnering with the companies to provide certain service components.

Optus Business managing director, Rob Parcell, said the collaboration with Sydney Water adds to its track record of offering outsourced and managed telecommunications services to enterprise and government.

“This is a strategic partnership that leverages our Optus Evolve and mobile networks to help Sydney Water deliver operational efficiencies,” he said.

Source: Arnnet

By Katlene Cacho

THE Australian government wants to strengthen its partnership with local business chambers. Top officials are encouraging Cebuano exporters to take advantage of free trade agreements (FTA) to boost trade between the two countries.

Australian Ambassador Rod Smith said they have been considering Cebu as one of their potential business partners because of its thriving economy, which is buoyed by the growth of the city’s manufacturing and outsourcing sectors.

“Australia and the Philippines have a long-standing trade relationship. We want to strengthen it and we are capitalizing our efforts in Cebu and the rest of the Visayan region,” Smith said in a recent interview.

Smith said Australia’s interest in the country is mainly in mining, business process outsourcing, infrastructure and tourism.

Smith said there is “great promise” of an increased trade partnership with Australia and the Philippines with the Asean-Australia-New Zealand Free Trade Agreement (AANZFTA) going into effect last year.

Less than 3 percent

Smith reported that of the $90 billion in trade between Asean and Australia, the Philippines accounts for less than three percent or $2.5 billion.

Last year, two-way merchandise trade between Australia and the Philippines was valued at P60 billion. Major Australian merchandise exports to the country include copper ores and concentrate, medicine, copper and milk and cream.

Philippine exports were electrical machinery and parts, radio broadcast receivers, telecommunications equipment and parts.

The two-way trade in services between the two countries last year is valued at P35.28 billion, with the Philippines recording a surplus of P18.36 billion to an import of P17.12 billion from Australia.

Australia’s top service exports to the country are education-related and personal travel. The Philippines’ top exports were personal and business-related travel.

The AANZFTA is Australia’s largest FTA. It eliminates about 96 percent tariff on the country’s exports to Australia. “The importance of the agreement is that it gives Philippines the competitive position to do trade in our country,” Smith said.

He also advised exporters to look beyond traditional markets and consider Australia’s large economy as destination of the country’s exports. For Cebu, Smith said they are interested in the furniture and food processing sectors.

“We don’t only cater to finished products but we also export intermediary services.

The challenge for exporters is to make use of the Australian export-driven country, for them to get involved in the supply chain of the global market,” Smith said. “We really hope to bring more Cebu products to Australia.”

Seminars

Ross Bray, senior trade and investment commissioner for Philippines and Micronesia of the Australian Trade Commission said they have partnered with the Department of Trade and Industry in conducting trade and investment seminars for exporters.

He said that it is important for an investor to know Australian culture.
Apart from increasing trade, Australia is also promoting its country as an ideal destination for education.

Bray said Philippines is one of the country’s major recipients of scholarship grants.

He said studying in Australia would give Filipinos instant connection with other foreign students who could be future business partners.
Over 617,000 international students studied in Australia last year. The students came from China, India, Korea, Thailand and Vietnam.

Last year, over 4,800 Filipinos studied in Australia.

“Aside from the quality of education, Filipinos study there because of its proximity to the Philippines and both countries have similar time zones,” Bray said.

Published in the Sun.Star Cebu newspaper

Formation of consortium in the industry is not a new phenomenon. You often come across individuals, companies, organisations or governments (or any combination of these entities) making an association to participate in a common activity. In the process they pool their resources for achieving a common goal. That’s the idea of consortium. It seems to have now caught the fancy of the Indian Business process outsourcing (BPO) industry.

In the BPO industry, the era of simple solutions is over. Simple solutions means merely replicating inefficient business processes of an organisation by some other party at lower price points. There is no analytical, strategic and customised approach involved in those solutions. But now there is a growing demand for value added BPO services. Clients are moving away from their traditional focus on cost savings. They want to know the breadth and depth of the services a vendor has to offer. Also they look for the credibility, security certifications and service standards.

There are only a few large players like TCS , Infosys and Wipro which meet these criteria. This helps them win larger deals. But when it comes to small or mid-sized vendors, few make the cut. In fact sometimes even the larger players need to look expertise outside the organisation.

And there arises the idea of the formation of consortium in BPO industry. This brings in a larger geographical presence, credibility and a niche expertise all together. Also the arrangement serves well in case of larger projects where higher equity investments are required. As most of the times smaller firms specialise in a niche area they tend to remain undercapitalised. Hence the consortium structure suits them.

Big players in this business have already started joining hands with small niche players for their expertise. For example, Infosys BPO has formed a partnership with American insurance institutes to expand the company’s insurance vertical. According to Infosys BPO’s statement, the consortium between them and the American Institute for Chartered Property Casualty Underwriter and the Insurance Institute of America will enrich Infosys BPO’s domain expertise. Also that will help learning and development of Infosys BPO’s employees.

Other mid-sized and smaller players are also in the race. The consortium of HCL Infosystems, Accor Services and Virgo Softech has bagged a contract from the Government of Madhya Pradesh (MP) to set up food coupon-based targeted public distribution system (TPDS) in the state. Patni has made bids for some deals in a consortium to have a local language partner or a platform vendor to provide internet-based solutions. Aegis has been providing customer lifecycle management (CLM) services for a healthcare client with a help of a consortium of service providers in the Americas.

There is a definite advantage of forming consortium as it brings synergies in many ways. But this also throws up a lot of challenges. Who will lead and manage the synergies? Who will assume the risk, liabilities and service level agreement (SLA) commitments? These kinds of questions start arising. After all these, it becomes difficult to get synergy at operational level due to overlap of services, different approaches to the client delivery of different partners etc.

Despite all the problems, the idea of forming a consortium of small and mid-sized BPO companies is being considered for winning big orders. It is now the need of the hour. Just being a small niche player or sometimes even a larger player, who provides plain vanilla BPO services, does not help these days.

This kind of consortium formation also gives clients more options. Earlier clients used to choose different vendors themselves for their different requirements on the best of the breed basis. Now they can go for a big player or a consortium for their bigger projects.

Good days for big players seem to be getting over in BPO industry. Now big deals are not restricted to big players alone. Consortia of mid-sized & small BPO firms are going to give them a run for their money.

Source: EquityMaster.com