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IT Security must improve

Global Increase in Outsourcing Forces Organizations to Improve their Information Security Posture to Prevent Devastating Breaches

“If an organization is looking to do a large infrastructure outsourcing engagement, the best way to ensure that security is a priority is to build a comprehensive list of security requirements into outsourcing contracts, develop appropriate service level agreements and reporting mechanisms to evaluate security and budget for a review by an independent assessment organization. This will ensure that security always stays top of mind,” said panel speaker Chris Oglesby. “If, however, the decision is to outsource infrastructure and security separately, then the security operations should drive the direction and outcomes and create independence between the organizations to meet the client needs.”

In the future, companies need to employ executive IS leaders who will develop methods to adequately protect the IT infrastructure when outsourcing in-house responsibilities. Platforms, such as EC-Council’s CISO Executive Summit Series, provide a means for top-level IS executives to gather and discuss the latest industry challenges. Continuous education and knowledge sharing will provide solutions to the quandaries top-executives face on a daily basis. For more information on upcoming EC-Council CISO Executive Summits, please visit: www.eccouncil.org/cisosummit.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/02/13/prweb9183078.DTL&ao=2#ixzz1mxxEQyZU

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The future of work

By Martin Conboy, President – Australian BPO Association (ABPOA)

Last week I attended a symposium, which was hosted by Fuji Xerox called ‘Nextwork’. It was all about exploring the workplace of tomorrow. At the outset, I must say that it was one of the most stimulating and thought-provoking events that I have ever been to. Fuji Xerox had done their homework as they brought together some of the finest minds to share their views about tomorrow. I was amazed by the technology and trends that were presented. Suffice it to say it’s all about the Cloud, Mobility and Location, and there is some exciting new language evolving like, ‘Business colonies’, ‘Anticipatory Analytics’, ‘Cohort Theory’, ‘Disruptive Innovation’ and ‘Continuous Partial Attention’.

At the end of this report I have included some material from the Institute of the Future, which is essential for those interested in further reading.

Breakfast Panel

The Fuji Xerox NextWork symposium started with a scene-setting breakfast panel that included Peter Ulm, Desktop & Productivity Lead – (Microsoft), Steve Godbee, A/NZ Integration Leader & CIO- (IBM), Scott Mason, Director of Products – (Optus), Kevin Bloch CTO – (Cisco) and Beth Winchester Exec. GM HR – (Fuji Xerox), during the breakfast we were treated to a glimpse of the future of work.

There was a lot of discussion around the physical work space and what would that look like in the future and how we would not necessarily ‘own’ the space that we occupied in a concrete sense as there would be a lot more ‘Hot Desking’ that would cater for disparate work groups that would only come together for special events and projects. There was talk about using new technologies like Skype to video conference and people bringing their own internet connecting device to work, (smart phone/tablet/ laptop etc.) as companies of the future would not impose restrictions on the tools one needs to do one’s job – think converging technologies, cloud and thin clients, yet using your own internet access device.

Looking forward, the panel agreed that a lot more people would work remotely away from their employer’s physical location and that has implications for how real estate features into the mix: this will give metropolitan building owners and managers heart palpitations as in the future people will not go to where the work is, as we do now, in the future the work will go to where the people are. In Australia with the roll out of the National Broadband network (NBN) we will see the resurgence of rural and regional Australia as people opt for a work life balance and do away with the long commute and congested living.

Of course, if mobility is going to be one of the underlying trends then loss of the gateway devices (who has not accidently left a smart phone or laptop in a taxi?) will have to be a consideration and it was suggested by the panel that these devices would not actually hold data on them per se as all data would be housed in the cloud so that it can be accessed anywhere, anyhow, anytime by anything so long as one has the relevant access codes. In other words, data will be the most important asset in the future and being able to access it, not the devices that the data is on.

In order to make sure that we are offering services that our customers want and need, we will use tools like ‘crowd sourcing’ to engage with customers to solve business and marketing problems. We will have to get used to collaborating outside of the standard business framework and work with our own communities of interest, workgroups, and social networks to test our ideas.

If data is the key, the future will allow us to extract unprecedented analytical information. Therefore, there is the potential to get bogged down with data overload. The business issues will be around making sense of it all: how do we manage data; what business intelligence tools will we need; how will we extract data and use it in a meaningful way.

Presentation one

The first bespoke presentation was given by Mike Walsh, CEO of the innovation research agency, “Tomorrow”. Walsh determined that with new and different ways to interact with customers and more flexible ways for employees to work, there would need to be a rethink about how we create frameworks that bring out the best in people. “Unless you understand the underlying culture of what drives your employees, you cannot build the office of the future”, he said. He went on to say, “even though employees will work from remote locations like their home, they still crave social contact”. Walsh gave an example of a hotel in New York that offered Wi-Fi and an environment where freelancers would come together with others to have a sense of community and a collegiate atmosphere that would not be possible if they were working in isolation from home.

Walsh gave some other great examples that are already being used today in Japan, where people use their mobile phones to scan bar codes on posters in railway stations to buy their groceries. Perhaps his most important point was that the companies of the future would be built around a core of data. He also brought into the discussion some concepts around social anthropology as a prism to make sense of the future. He said that 56% of students nearing graduation would not work for a company that blocked FaceBook and Twitter.
Walsh also pushed ‘Cohort Theory’. Generational cohort theory argues that events, social change and even pop culture affects the values, beliefs, attitudes and ultimately behaviour of individuals. According to this perspective, a generation is less about the age of a group but more about their shared experience in their youth.

Another subject that he touched on was ‘Disruptive Innovation’. The term disruptive innovation as we know it today first appeared in the 1997 bestseller, ‘The Innovator’s Dilemma’. In the book, Harvard Business School Professor Clayton Christensen investigated why some innovations that were radical in nature reinforced the incumbent’s position in a certain industry. Christensen analysed extensively the disk drive industry because it represented the most dynamic, technologically discontinuous and complex industry one could find in our economy. Just consider that the memory capacity packed into a square inch of disk increased by 35% per year, from 50 kilobytes in 1967 to 1.7 megabytes in 1973, 12 megabytes in 1981 and 1100 megabytes in 1995.

Disruptive innovation will often have characteristics that traditional customer segments may not want, at least initially. Such innovations will appear as cheaper, simpler and even with inferior quality if compared to existing products, but some marginal or new segment will value it.

Operating under such a value network might lead a company to “listen too much” to its main customers. As a result, it will not recognise potentially disruptive innovations that serve only marginal customers. Secondly, large companies will not be interested in small markets; they hardly offer significant growth opportunities. Again this will lead companies to completely ignore the disruptive innovation or to wait until the market is “large enough to be attractive”. That is exactly when new entrants attack incumbent’s turf, and by that time it is usually too late.

The physical and digital worlds are converging at a speed predicted by very few. According to IDC, the world’s information is doubling every two years.

Walsh spoke about Continuous Partial Attention (CPA), which is the process of paying simultaneous attention to a number of sources of incoming information, i.e. customer feedback, warehouse withdrawals, and website hits, but at a superficial level.

The term was coined by Linda Stone in 1998. Author, Steven Berlin Johnson, describes this as a kind of multitasking: “It usually involves skimming the surface of the incoming data; picking out the relevant details and moving on to the next stream. You’re paying attention, but only partially. CPA lets you cast a wider net but it also runs the risk of keeping you from really studying the fish”.

Presentation two

Dr. Thomas Frey, a futurist and Executive Director at the DaVinci Institute and Google’s top rated futurist speaker, a man with a seriously bright mind gave a brilliant presentation around the secret language of the future. He presented his theory about how the future gets created. He explained how we could influence the future by using social media and other unusual techniques for both understanding and gaining control of our own futures.

Frey put forward a proposition that in the future, workgroups would come together in much the same way that Hollywood comes together to make a movie and then break up after the project is over. “The future gets created in the minds of everyone around us. Virtually everyone has a hand in it, but not all contributions are equal. As you might imagine, a small group of people armed with powerful ideas can make a disproportionately large impact.”

“But creating the future needs to involve much more than just ideas. The ideas create a starting point but need to be put into a visual context, massaged, enhanced, and somehow made to spring to life.”
Frey spoke about ‘Business Colonies’. Business colonies are an evolving, new kind of organisational structure designed around matching talent with pending work projects. The operation will revolve around some combination of resident people based in a physical facility and a non-resident virtual workforce. Some will forego the cost of the physical facility completely, opting instead to form around an entirely virtual communications structure.

Most will be organised around a topical area best suited for the talent base of the core team. As an example, a team of photonics engineers will attract projects best suited for that kind of talent. Likewise, a working group of programmers specialising in computer gaming applications will serve as a magnet for new gaming projects.

In some instances, large corporations will launch their own business colonies as a way to expand capability without adding to their headcount. Staffed with a few project managers, the company will use the colony as a proving ground for experimental assignments best performed outside of the cultural bounds of existing workflow.

Xerox Presentations

The next two presentations were given by ‘holograms’ (very cool) of the presenters, the first ‘hologram’ was Francois Ragnet from Xerox’s Technology Innovation, French-based Think Tank, and he spoke about a ‘less paper’ office. As Xerox is a ‘green’ company, he chose not to enlarge his carbon footprint by not actually coming to Australia in person, so he came as a ‘hologram’. Ragnet presented some scary statistics such as 20% of all documents that printed are not actually picked up and 40% are discarded the next day – imagine the impact on our forests if we eliminated such waste from our business processes!

Dr. Larry Rowe of Xerox’s Palo Alto, California Research Labs also beamed in as a hologram. Rowe laid out a presentation around the importance of fostering teamwork in a disparate mobile workforce and that collaboration was the key. He argued that combining low cost computing, storage, and communication with powerful mobile devices is changing the nature of work and everyday life today. Rowe also spoke about how organisations need to think about how to use the physical place itself as a part of the information toolkit along with laptops, mobile phones, and printers. The need to manage large volumes of complex visual information will lead to workplace design needs that expand the size and scope of digital displays.

In summary, the future is looming up very quickly, and the old command and control way of running our businesses is passing. For most of us, it’s a work in progress; some will still want to hang on to the old ways and resist change.

There is only one constant in business and that is change, as my first boss told me, “if you are not going forward, then you are gong backwards.”

To support your thinking, I found this – Institute of the Future – www.iftf.org

For every forecast there exists a litany of potential implications. By drawing out the most crucial implications from each of our six main themes, we attempt to address the complexity of the future with a set of pointers that will help organisations better prepare for what’s to come.

The following implications are a result of that work, and we thank the participants for their insight. Even though they are embedded within the narratives of The Future of Work Perspectives (SR-1092A) and are part of each story we tell in this set of forecasts, we’ve included the implications here as well, because recognising them is instrumental to getting there early. These are by no means the only implications. So take some time to reflect on them, and add to them as you plan your action steps to prepare for the future of work.

1. ORGANISATIONAL CULTURE AND DESIGN: PLAN FOR TRANSPARENCY

The evolution of technologies for ubiquitous, detailed, real-time reporting on everything means that almost every aspect of organisational life can be exquisitely documented and tracked. Organisations should plan for transparency from the outset in order to stay ahead; concealing anything will become increasingly difficult. Avoiding accountability will also get harder, and moving operations somewhere else in order to avoid accountability will not be a viable long-term solution. Companies that have tried to hide pollution by “outsourcing” polluting activities to subcontractors are likely to have to account for them. Organisations should err on the side of transparency, resorting to secrecy only when absolutely necessary and as a last resort. Now is the time to examine all aspects of your operations—from human resources to manufacturing and distribution—through the transparency lens.

2. TOOLS: PHYSICAL PLACE IS A PART OF THE TOOLKIT

An important outcome of the visible world will be the convergence of computational tools and the physical workplace. Organisations need to think about how to use the physical place itself as a part of the information toolkit along with laptops, mobile phones, and printers. The need to manage large volumes of complex visual information will lead to workplace design needs that expand the size and scope of digital displays, while also spreading access to “windows” on data into non-traditional spaces for computing hallways, social spaces like water coolers, and outdoors. Plan for workplaces that enable “progressive disclosure,” i.e., the ability to reveal higher-level functionality, as users are ready for them.

3. PHYSICAL SPACE: DESIGNING FOR HEALTH

Healthy workplaces are no longer just about a lack of harmful toxins, fluorescent lights and cubicles are giving way to green spaces and sunlight. Bio-Citizens will expect workplaces that reflect their understanding of health as a value. Successful future workplace design will bring together large-scale architectural understanding of the workplace community, healthy spaces, anthropological understanding of small group dynamics, and information science. Ergonomic consultations will go from optional to mandatory as employers strive to ensure that their employees are healthy and, as a result, productive. Sensors and other advanced technologies will help to make the “healthiness” of the work environment visible. Offering incentives for healthy behaviour could prove a good way to attract Bio-Citizens, but watch out for making such incentives coercive and, thus, perceived as paternalistic and intrusive.

4. RECRUITMENT: ATTRACTING – BUT NOT NECESSARILY HIRING – THE BEST

Achieving the diversity required to amplify organisations means tapping into multiple intelligences, work styles, skills, media choices, and geographies. The products of collective intelligence are successful because each person makes contributions in the area she chooses and in the manner that suits her best. For an organisation to amplify itself, it must tap the external network of non-employees and entice them to contribute in the areas of their expertise. Beyond hiring, the goal must be to attract, engage, and connect amplified individuals to the organisation so that they view it as the most important and powerful node in their highly networked and distributed career paths. Organisations need to think in ways that suit these individuals rather than traditional promotions and compensation packages—increased freedom, ability to choose particular projects, ability to publish outside, etc.

5. SKILLS: TRAINING IN VISUAL LITERACY

Organisations and individuals will have to use new types of highly sensory- rich interfaces—artistic visualisations, simulations, and ambient and other interfaces utilising sound, movement, colours, etc.—to take advantage of massive amounts of data flooding the workplace. The next generations of workers will need to possess visual literacy and have the ability to present, analyse, and interact with visual information. Visual acumen is a survival skill in the future workplace. Younger workers who have grown up in the world of video games and virtual reality will naturally be more adept at this, but just because someone is younger doesn’t mean they will automatically possess such skills. Think about how to promote visual literacy standards for your organisation, how to identify those with the best visual skills, and how to train employees to become proficient in dynamic, image-moderated collaborative explorations of data.

6. HUMAN RESOURCES: MATHEMATICIANS AND NEUROSCIENTISTS?

Hiring practices, training, and management will draw from a deeper understanding of neuroscience and complex behavioural algorithms. Already, start-ups have emerged that promise to train individuals to increase their mental acuity, focus, and efficiency based on brain science. Company- specific algorithms will be developed for software that vets new applicants based on detailed questionnaires. As science comes to work, human resource managers will need to become versed in these new sciences. While most HR personnel will likely not be scientists, they will need to be able to understand the language of these disciplines and collaborate with scientists in order to assess and implement some of the new tools. A manager may not know how to design Monte Carlo simulations to optimise workflow, but he must be able to speak the language of mathematicians to understand the theory behind suggested methods.

7. LEADERSHIP: GIVING VOICE TO THE COMMONS

The world of amplified individuals calls for a different type of leader—not ones who dictate and make pronouncements, and not necessarily those with the most charisma and unitary vision. Rather than assuming absolute authority, effective leaders in amplified organisations must work to understand the values and opinions of their employees to enable a productive dialogue about what the group embodies, what it stands for, and, thus, how it should act.

Good leaders will increasingly need to see themselves as “speakers for the commons”—those who are able to give voice to what the commons members, including non-employees, want, and to provide the infrastructure and resources for accomplishing this. It doesn’t mean the end of vision; the vision of amplified organisations is not enforced from the top but emerges in dialogue and conversations from the bottom up, dependent upon cooperation and support of constituents.

Institute for the Future www.iftf.org

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BPAP eyes stronger industry-government collaboration to sustain IT-BPO talent supply

The Business Processing Association of the Philippines (BPAP) aims to strengthen collaboration with government and the education sector to help sustain the development of the information technology and business process outsourcing (IT-BPO) industry and address the skills-jobs mismatch in the country.

A threefold increase in IT-BPO employment within five years was set as the benchmark to attain the US$25 billion revenue target by 2016, according to BPAP. Talent management, including certification and outreach initiatives, has become a top priority, says Raymond Lacdao, BPAP industry affairs executive director.

“After experiencing rapid growth over the past few years, the industry is looking for ways to sustaining its talent supply. We need a robust pool of skillful and motivated workers to spur further growth,” Lacdao said. Top skills needed in the industry include leadership, English language skills, strategic thinking, comprehension, and teamwork, among others.

Lacdao said that talent is among the key issues that will be discussed during the Third International Outsourcing Summit (IOS), a high-level meeting of global outsourcing leaders and experts. The IOS will be held October 11 and 12, 2011 at the Sofitel Philippine Plaza, Manila.

BPAP has spearheaded the Global Competitiveness Assessment Tool to allow firms to assess the skills of graduating students and improve hiring rates. The IT-BPO industry also expressed its support for the K+12 education reform program, which will help create a more flexible and training ground that will complement the industry’s talent and skill requirements.

“Support from the government is a big step towards meeting the industry’s US$25-billion expansion by 2016. If we reach this goal, the industry could employ up to 1.3 million Filipinos and generate 12.5% of the gross domestic product,” Lacdao said.

Visit www.internationaloutsourcingsummit.com to learn more about the Third Annual IOS. For inquiries, contact the IOS Conference Secretariat at +632 757 3500 ext. 311 or send an email to ios2011@teamasia.com.

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3rd International Outsourcing Summit to focus on non-voice, complex IT-BPO services

In just under two months, The Philippines will host its third Annual International Outsourcing Summit (IOS), a landmark event for the burgeoning IT-BPO industry. Sessions led by over 70 expert speakers and panelists will focus on the profound shift in the IT-BPO landscape from process-based services such as managing customer relationships, to knowledge-based services including project engineering and management and risk assessment.

The Philippines will host the Third Annual International Outsourcing Summit (IOS), a landmark event for IT-BPO industry, with sessions led by over 70 expert speakers and panelists speaking to over 300 international delegates.

According to organizers, the summit provides a platform to assess progress towards development goals provided in the IT-BPO Road Map 2011-2016, which projects potential annual growth of up to 20% over the next five years, generating 1.3 million direct jobs, 3.2 million indirect jobs, and US$25 billion in revenues. The event is organized by the Business Processing Association of the Philippines (BPAP).

While traditional voice-based BPO will contribute substantially to that growth, non-voice, complex services are expected to be the principal engine of growth for the industry, according to Raymond Lacdao, Industry Affairs Executive Director of BPAP.

“We anticipate growth in non-voice, complex IT-BPO services of 20-25% over the next five years,” Lacdao said. “Voice-based services will grow at a rate of 15-20%,” he said. “IOS 2011 was designed to focus attention of the industry on the potential of non-voice, complex IT-BPO services, and to increase the global visibility of the Philippines’ capability for delivering these services.”

This year’s summit also includes a session on how the industry can extend its leadership in the industry through innovating new services, including research and development. “Last year, we became the global leader in voice BPO,” Lacdao said. “But we are rapidly transitioning to non-voice, complex services delivery. We want to demonstrate that the Philippines has a very high capability in this area, including emerging complex services.”

Session speakers and panelists represent a variety of industry stakeholders. They include Ralph Guggenheim, founding member of Pixar Animation Studios and CEO of Alligator Planet; Paul Robinson, vice president for Finance Process – Expenditure, Shell Shared Services Asia BV; Jackie O’Leary, vice president of Customer Operations, Everything Everywhere.

Also speaking are John Wheeler, vice president for Strategy and Emergent Technologies, SPi Global Content Solutions; Kush Kamra, vice president for Global Service Delivery, Global Capability Sourcing, MetLife; and Jim Cross, MD, Head-National Medical Policy and Operations, Aetna.

Influential industry executives representing other country industry associations will attend IOS to pitch their own capabilities. They include Martin Conboy President of the Australian BPO Association, Armand Angeli, co-founder and president of the European Outsourcing Association; Sergio Pessoa, director of marketing and international markets of the Brazil Association of Software and Services; and Valentin Makarov, president of the RUSSOFT Association.

Alfredo Ayala, president and CEO of LiveIt Investments Ltd. and BPAP chairman, will moderate an “Emerging Markets” panel on the first day of the summit. Philippine President Benigno S. Aquino III will deliver the keynote address.

Visit http://www.internationaloutsourcingsummit.com for details and to register and evaluate sponsorship opportunities.

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Shared Services and Outsourcing in HR

By IQPC

The Shared Services and Outsourcing Network has recruited some of the top HR Shared Services Professionals from around Europe to deliver a highly focused and topical event. Following months of industry research, the HR Directors Summit event will be running in London on the 11th and 12th of October this year.

The event will explore key objectives and challenges specific to utilising shared services to address pressing issues including Attrition and Retention, Change Management, Effective HR Governance Models and Talent Management Strategies.

Innovative case studies and interactive discussions aim to highlight strategic transformation gaps in strategies that can be addressed using the latest technological advances.

Companies including Rolls-Royce, Sainsburys, Electrolux, GSK, DHL and UBS are among those looking at a range of issues affecting organisations at different stages of their Shared Services journey. These companies are meeting to discuss what will in the coming months keep them at the cutting edge of Shared Services, helping them retain their competitive advantage.

For more information about the upcoming HR Directors Summit visit:

http://www.europeanhrsummit.com

http://europeanhrsummit.com/Event.aspx?id=517446&utm_campaign=Paidpressrelease&utm_medium=&utm_source=&utm_content=&utm

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4th Asia Pacific Service Outsourcing International Conference

The 4th Asia Pacific Service Outsourcing International Conference will be
held in Wuxi on 3rd-5th September.

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“Veni, Vidi, Vici” – “I came, I saw, I conquered.”

By Martin Conboy, President – Australian BPO Association

Last week, we met our colleagues from the Business Process Outsourcing Association of the Philippines (BPAP) as they launched a charm offensive on Australia. Like Julius Ceasar they came, they saw and they conquered and made a lot of friends on the way through. There is no doubt that the best thing coming out of the Philippines is the people and they are perfectly suited to the delivery of outstanding customer services.

The Philippines economy weathered the 2008-09 global recession better than its regional peers due to minimal exposure to troubled international securities, lower dependence on exports, relatively resilient domestic consumption, large remittances from five million overseas Filipino workers (OFW), and a growing business process outsourcing industry. During the financial crisis alone, the Philippines bucked the negative global trend and demonstrated a 19% growth rate in IT / BPO revenues. Overall economic growth slowed down in the first quarter of 2011 due to lower government spending and a slowdown in global trade.

55 percent of the $350 Billion economy is in services and 500,000 plus English-speaking university educated young professionals are employed in the BPO sector and it’s valued at US$10 Billion, representing about 3.5 percent of Philippines GDP. The global share of the Philippines offshore services market is 8% and 93% of the 101 million population are literate.

The Philippines has emerged as the Manny Pacquiao of the BPO world, in that they are punching well above their weight, that has confidently taken advantage of the global outsourcing trends over the past decade. Savvy business leaders know that the Philippines, with its 600 IT and BPO companies, is a world-class delivery-centre destination and rightly deserves its no.2 position behind India. Like all market players in any service market who aspire to the top spot, they always have to try harder to get there.

The Business Processing Association of the Philippines (BPAP) clearly plays a leading role in supporting the local BPO industry and has, together with relevant stakeholders, developed and acted on an across-the-board action plan designed to grow and improve the Philippines’ value proposition and competitive position. This “blueprint” plan was first conceived in 2006 and was eventually named “Road Map 2010” as it incorporated goals and specific action items that needed to be executed in order to obtain success. Areas of focus within this plan included talent management and development, “Next Wave Cities,” and the business environment. Over the past four years, BPAP has aggressively worked with stakeholders to obtain outstanding results that have improved the Philippines’ market position as a leading offshore location. Going forward, and released early in 2011, BPAP presented the “Philippine IT-BPO Road Map 2016: Driving to Global Leadership”, that emphasizes the importance of talent development programs, strategy for marketing, needed regulatory changes, and additional priorities for next wave cities.

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ABPOA Welcomes BPAP to Australia

By Martin Conboy – President, Australian BPO Association

As we have the Business Processing Association of the Philippines (BPAP) coming to town next week, I was reflecting on not only how far our industry has come but also how much it has changed.
Back in 1999 when I started and owned callcentres.net, a company that we had just only breathed life into, and we had started researching call centres in Asia, most people in the Australian business community were not familiar with what a call centre was or what its purpose was. Offshoring from an Australian perspective was still largely in the future.

When we had conducted the Asia Pacific call centre report in 1999, we refused to believe the data as it was showing call centres in India and the Philippines with seat numbers in excess of 2,000 seats, so we double checked the data and called some of the centres back and confirmed that the numbers were in fact real. At that point in time the Americans had cottoned on to the idea of what we now call BPO 1.0 (Lift and Shift) and the whole labour arbitrage discussion was still evolving.
Fast forward to today and now comfortably on the other side of the global financial crisis, and the business community is a lot more relaxed about outsourcing and more hard-nosed about maintaining a healthy bottom line, the drivers are more evident. Be that as it may the environment has changed dramatically and irrevocably.

Shareholders demand more

The number of Australians who own shares has recently hit 7.3 million or 43 percent of the adult population, and that’s a solid indication that Australians are becoming more financially literate and the days of being disengaged delegators are well behind us. Shareholders are a lot more engaged with the companies that they have invested in and they are forcing the board and the management of the companies to continually focus on the bottom line as the shareholders not only want their annual dividend payments, they also want the value of their shares to accumulate in value.

Needless to say that management is always considering ways to take layers of cost out of their operating budgets and the opportunities to do that are now better understood as they start to better understand the value proposition being put forward by the fast growing BPO providers in Asia.

Australian dollar makes offshoring cheaper

Offshoring from Australia has always been a precarious play with naysayers wrapping themselves in the Australian flag and calling foul and major banks, Telco’s and airlines always being sensitive to PR scrutiny. Apart from the fact that we live in a multi-cultural country whose citizens speak over 160 languages, it must be remembered that we live in a global market that we are totally connected into. The whole labour arbitrage argument is now being brought back to the table, driven by the ever increasing gap between the Australian dollar and other currencies still recovering from the GFC hangover.

The Australian dollar is currently trading at unprecedented levels, marking a 30 per cent increase since June 2010. A strong dollar gives Australian businesses a lot of buying power and amplifies the difference in the cost of labour in Australia compared to the Philippines, Malaysia, India and China.

Australia is a full employment economy

On another front, the biggest challenge for growth for Australian companies is the war for talent. Across a wide range of industries, it is not the ability to get contracts that is keeping executives up at night, but finding workers to complete those contracts. It is no secret that great employees have become scarcer than customers. We need only look at the Australian mining industry as it acts like a giant vacuum cleaner sucking up the entire available workforce. This is starting to have an impact on wages and feeding into inflation, which is giving the reserve bank indigestion.

With the recruitment market expected to remain buoyant, skills shortage relief is unlikely to occur. A major component of business success in the future will be the ability to source suitably qualified and experienced staff, particularly in areas where demand is strongest.

In a skills-short market, offshoring becomes an attractive option for companies unable to find people to do non-core activities.  In BPO 1.0, all of the lower level non-core activities were considered for outsourcing. As the market moves towards BPO 2.0, we are seeing organisations move beyond outsourcing transactional processes to outsourcing complex, high-end processes that have a higher impact and thus positively impact the bottom-line and create shareholder value faster. We are also seeing global companies adopt a ‘hub-and-spoke’ delivery model, with locations such as Eastern Europe constituting ‘spokes’ to address regional nuances of certain processes as well as non-English languages.

This requires access to highly skilled and highly educated workforces. There is a short supply of these people even at the best of times but in the current environment they are impossible to source. So one of the principal drivers for Australian companies is access to talent and motivated workforces, and this can only be achieved by tapping into the available English speaking work forces in places like the Philippines.

BPO is bundled with IT

Finally, the bundling of IT and BPO is rapidly being adopted. Workforces supported by technology now enable business processes to be performed seamlessly across geographic and corporate boundaries. I.e. The shared services sector.

Here in Australia, we have seen businesses rapidly moving up the maturity curve in outsourcing and even leap-frogging other regions in adoption of transformational business solutions. The sort of areas we are seeing a lot of interest is in financial and accounting outsourcing not only transactional processes such as accounts payable and receivable but also higher-end processes such as general ledger and tax. Another hot area is Payroll and HR outsourcing, with global organisations finally embarking on multi-country payroll outsourcing deals.

So, in conclusion as we anticipate the historic visit from our colleagues from the Philippines, the very first meeting between our two associations, we look forward to the collaboration and partnerships that will be formed on so many fronts. This meeting can only be looked at as pro-growth and will act as a spur to make outsourcing a legitimate and authentic part of the Australian business landscape.

We wish all of the Filipino delegates good luck and every success during their visit to Australia.

Posted in ABPOA, BPO, Conferences, Events, featured, News Archive, OutsourcingComments (2)

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