• The Australian BPO market is expected to grow by 20 % over the next year or two.
  Get your copy of the Australian BPO research study now.
  Go to – http://thesauce.net.au/sauce-research
• The Australian Business Process Outsourcing Association (ABPOA) is hosting a Cocktail Reception in honour of a trade delegation from the Business Processing Association of the Philippines (BPA/P) and the Australian-based Philippine Trade and Investment Commission.

  We would like to invite ABPOA members and guests to attend, meet, and network with our friends from the Philippines. 



  Where: Level 15, NSW Business Chamber, 140 Arthur Street, North Sydney NSW 2060
  When: Monday 21st May from 6:00 pm to 8:00 pm

  Tickets: To secure your place at this popular event, please register at
  Go To – http://abpoabpap2012.eventbrite.com

• Vocal Authenticity and Insightful Learning
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Use your voice to create more meaningful and trusting connections with others over the phone and face to face!

  Business Enterprise Centre

19/323 Castlereagh Street
Haymarket NSW
  Thursday 31 May 2012
  6:30 pm – 9:00 pm

Beverage and canapés provided
  Contact: admin@ccma.asn.au

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The number of businesses outsourcing traditional marketing functions is expected to jump over the next 12 to 24 months from 9% currently to 21%, according to IBM’s ‘Australian Business Process Outsourcing (BPO) Research 2012’.

The report, built from a survey of 216 businesses, rates traditional marketing as the fourth most outsourced business process, ahead of digital marketing, which is currently outsourced by a surprisingly low 6% of businesses. Intention to outsource online marketing over the next year or two is also lower than for traditional, with only 17% anticipating that they will seek external providers.

The greatest share of business for traditional marketing service providers came from the telecommunications and transport industries, with 33% and 31% of businesses in these sectors outsourcing at least one marketing process. In the future, suppliers should look to government and education sectors as their primary sources of outsource business in the future.

Adoption and future adoption of traditional marketing outsourcing across sectors

When it comes to online marketing, telecommunications and transport businesses are the highest current adopters of outsourcing, while, looking forward, telecommunications and banking, financial services and insurance (BFSI) will increase their outsourcing the most.

Adoption and future adoption of online marketing outsourcing across sectors

The BPO report goes on to break down a number of sub-processes for both traditional and online marketing. Market research is the most commonly outsourced traditional sub-process, with 74% outsourcing this function, and also ranks as the sub-process most likely to be outsourced in the future.

Currently 32% outsource content development and 16% outsource campaign management; both of which are expected to be outsourced by more than one in ten who are yet to do so. Customer service is outsourced by 11% of business currently, but a further 21% intend to in the next 12 to 24 months.

Adoption and future adoption of traditional marketing outsourcing by sub-process

Digital marketing is an area where businesses are looking for support due the volume, velocity and variety of data that comes with the territory according to BPO CRM Leader for Growth Markets at IBM Australia, Peter Monk. “The data complexities around it are not something that organisations can or want to get their head into,” Monk says. “They’re saying it’s simply not why they’re in business.”

Social media has been a great influence in driving usage outsourcing of online marketing according to the report. However, the online marketing sub-processes most commonly outsourced currently include multi-channel management at 50%, analytics at 29% and content management at 29%. In the future additional businesses are most likely to outsource content management (21%) and reporting (21%).

Adoption and future adoption of online marketing outsourcing by sub-process

The research also examined online marketing strategies, discovering that most organisations (59%) outsourcing the function have some sort of online marketing strategy. However, these still appear to be in their infancy, with only 7% of organisations that currently outsource online marketing having a constant engagement strategy, and 14% having an active use strategy. One in five do not have a strategy in place and a further 21% have a passive online presence.

Get your copy of the Australian BPO research study now.

Go to – http://thesauce.net.au/sauce-research

By Martin Conboy of The Sauce

Most Australian companies don’t want to send business functions offshore, but many intend to outsource a lot more roles in the next two years and the primary aim isn’t to reduce costs, according to our recent survey.
The survey found 83 per cent of companies would prefer not to send work offshore.

However, increases in outsourcing were expected across a range of areas including finance and accounting, HR, marketing, reporting and analytics and print and document management.

In Australia, there are many businesses both large & small that have outsourced or are about to outsource a number of business processes. There is no doubt that the outsourcing market has burst out of the shadows in the last two years.

Outsourcing has become a valuable tool for businesses to deploy in a hyper competitive market. The drivers of change, from a lift & shift approach to a more considered business expansion opportunity means that organisations are beginning to see that by outsourcing their non-core business processes, they have a lot more time to spend on a core competencies; the work they know best.

Up to now outsourcing has received a bad rap. As a result, most Australian businesses, possibly out of fear of the unknown, have not properly explored the opportunities that it presents. Often mistaken for ‘offshoring’ it is only now that outsourcing and offshoring are having their day in the Sun.

As Ken Henry (Australian Secretary of the Department of the Treasury) noted as far back 2006: “Australia has much to gain from off-shoring – most obviously through a lowing of costs to business and ultimately consumers. Opposition to ‘offshoring’ is based on the same protectionist nostrums that were once used to support the high tariff wall that a generation of Australian policy makers has been busy dismantling. It may be dressed in a different garb, but it is no more respectable.”

Being apposed to importing services through offshoring is like being opposed to imports. It would mean if we followed it to its logical conclusion that Australians would be unable to have iPhones (Heaven forbid) travel overseas (Say its isn’t so) or drive well made Japanese or sexy European cars. (Wouldn’t happen!)

Australians don’t bat an eyelid by taking advantage of our high foreign exchange rate and grabbing a bargain on line, so how is that any different from buying a service online (via the internet).

Asia’s surging growth – including high demand for our commodities – has placed us close to the engines of global wealth creation. Prices for the commodities Australia sells to the world have never been higher, providing an unprecedented opportunity. So apart from reaping the benefits of outsourcing be it locally (In Country) or off shoring we should be spreading the love around to our Pacific neighbours.

Having said that there are some challenges as well, a recent report conducted for Deloitte Consulting by the Economist magazine indicated that across the Asia-Pacific region one of the major risks facing corporations was staff attrition and lack of human capital .in fact on average 25% of companies across the Asia Pacific region indicate this is a major area of risk.

Its no secret that we have a skills shortage in Australia and many BPO service providers have perpetual ‘Want’ adverts on all of the job boards. It follows that many companies are being pushed down the path of outsourcing and off shoring just to access available staff with the right skill sets.

Our own recent BPO Research report (The Australian BPO Report 2012) http://thesauce.net.au/sauce-research supported by IBM and Fuji Xerox Australia has revealed some interesting insights from the buy side of major Australian organisations. “ The report reflects the rapid pace of change and maturity that the Australian 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, usually in a negative way, 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, signaling major opportunities for organisations offering these kinds of services.

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.

So in conclusion we believe that Australia has moved past BPO 1.0 (Lift & Shift) and is sitting somewhere between BPO 2.0 & BPO 3.0 with its foot on the accelerator.

Get your copy of the Australian BPO research study now.
Go to – http://thesauce.net.au/sauce-research

By Raffy Ayeng

The Philippines Department of Finance and the Asian Development Bank (ADB) recently signed a memorandum of understanding (MOU) to set up “Knowledge Hubs” in chosen colleges and universities nationwide in order to support the continued growth of the information technology-business process outsourcing (IT-BPO) industry in the country.

The MoU, which provides technical assistance worth $650,000 to the IT-BPO sector, was signed by Finance Secretary Cesar Purisima and the ADB Board of Governors, on the sidelines of the 45th ADB Annual Meeting of the Board of Governors in Manila.

“IT-BPO is the fastest-growing employment and one of the highest revenue generating sectors in the country. In 2010, the country surpassed India in terms of voice related outsourced work to become the global leader in this area. The industry is now moving up the value chain from voice-based services [call centers] toward knowledge-based activities,” the MOU stated.

It further states that an educated workforce equipped with skills that meet the demands of high-growth industries would be needed to improve national competitiveness, move into knowledge-based services, and achieve and maintain rapid economic progress.

The three-year program aims to align the curriculum of higher education institutions with the needs of the IT-BPO sector through “a replicable and sustainable model of ICT-enabled knowledge hub for improved teaching and learning of IT-BPO industry-based curriculum in HEIs.”

A total of $500,000 will be sourced from the Republic of Korea e-Asia and Knowledge Partnership Fund by the ADB, while the Philippine government will provide the remaining $150,000 “in kind contributions.”

At least three hubs will be established in the country with one each in Luzon, Visayas and Mindanao, the MoU stated. All hubs will be ICT-enabled and provide “online training” to teachers and “digitized learning modules and study guides” for students.

The MoU said that at least 900 faculty members and 3,000 college-level students, of which at least 50 percent are females, will benefit from the program.

A steering committee chaired by the Finance department with members from the Commission on Higher Education, National Economic and Development Authority, the Business Processing Association of the Philippines and other government agencies, will also be established to oversee the agreement’s implementation.
The government aims to make IT-BPO a $25-billion industry by 2016.

Source: Chicago Tribune

By Shaun Drummond

Most Australian companies don’t want to send business functions offshore, but many intend to outsource a lot more roles in the next two years and the primary aim isn’t to reduce costs, according to a recent survey.

The survey produced by The Sauce and endorsed by the Australian Business Process Outsourcing Association and two large outsource providers, IBM and Fuji-Xerox Australia , found 83 per cent of companies didn’t intend to send work offshore.

However, increases in outsourcing were expected across a range of areas including finance and accounting, HR, marketing, reporting and analytics and print and document management.

The smallest growth was in finance and accounting, with 13 per cent of organisations outsourcing now compared with 17 per cent within one to two years.

The biggest growth was in marketing, jumping to 24 per cent from 9 per cent, supply chain management going to 16 per cent from 6 per cent and reporting and analytics rising to 18 per cent from 6 per cent.

Seventy-one per cent said the main reason for outsourcing was global expansion, followed by “scalability” and “going green”, with 83 per cent of companies in manufacturing seeing it as a way to reduce their environmental impact. Reducing cost was one of the least cited to outsource at 21 per cent.

At a forum in Sydney on last week, participants from the ABPOA, KPMG, IBM and Fuji-Xerox said the increases were off a low base, turning around a slow uptake of outsourcing in Australia.

“One of the reasons Australia has been fairly slow moving is that most Australian companies sit in he middle of the bell curve, they are fairly comfortable,” said Peter Monk, the director of global process services at IBM Australia & NZ.

“I think we have seen a few companies who are laggards who have been forced to do something because business as usual won’t work.”

KPMG’s head of shared services and outsourcing, Michael Smart, said Australia was a long way behind the rest of the world in its uptake of BPO.

Part of the reason is that it is “inherently more difficult than IT because a business process has a lot more tentacles in an organisation – even finance and accounting, even though there are many providers that can deliver that more effectively and cheaply through global delivery models”.

Martin Conboy, president of the ABPOA, said there were four stages of outsourcing: 1.0, 2.0, 3.0 and 4.0.

The first stage is “lift and shift” of transactional functions which has been done over the past decade.

The next stage is “process re-engineering”, 3.0 is moving expenses from a capital expenditure model to an operational expenditure model, and cloud computing is part of that shift. 4.0 involves the outsourcing of data and analysis.

“From this research we have found [Australia] has just passed BPO 2.0, we are not quite at BPO 3.0,” he said.

Current and future trends in Business Process Outsourcing

Source: The Australian BPO Report 2012

The Australian Financial Review
Get your copy of the report HERE

Part I of III
By Mark Atterby – Senior Staff Writer

The large scale gathering of data from a variety of sources and the application of sophisticated analytical tools to make sense of that data is quickly becoming the new frontier for organisations seeking competitive differentiation. The BPO and outsourcing industry is playing a pivotal role in developing the processes that overcome many of the challenges associated with ‘big data’ analytics.

Organisations in a variety of industries, ranging from finance to retailing to telecommunications, have started to engage in big data strategies over the last year. The reasons for engaging in ‘big data’ and the analytical methodologies being deployed vary dramatically, but it is driven by the need to leverage data from a variety of sources to achieve an accurate and universal view of the business in real time.

Chris Luxford, president Aegis Services Australia, states, “These days most organisations struggle to maintain differentiation around product and pricing. It is about the customer experience and the moments of truth the customer has when interacting with your organissation whether face-to-face, over the phone, the web, email or via a social media channel”.

“Big data analytics looks at how the various channels, customers use to interact with an organsation, can be empowered so the ‘moment of truth’ can be differentiated for that customer”.

What is big data and big data analytics?

The term ‘big data’ refers to data sets of structured and unstructured data that become so large that they become unwieldy. Big data sizes are a constantly moving target currently ranging from a few dozen terabytes to many petabytes of data in a single data set.

Enterprises are generating huge amounts of transactional data about their customers from their internal ERP, CRM and BI systems. Annually the CBA handles over 120 terabytes in customer emails alone. Fuelled by social media, Gartner predicts that worldwide IP traffic will quadruple by 2015.

Luxford comments, “big data analytics is not so much about the amount of data being collected. It’s about collecting data from multiple systems from within and outside the organisation and making it available in a visual format that allows people to make decisions in real time.”

At the 2012 SSON conference held in Melbourne, recently Mok Choe, chief technology officer, from the Commwealth Bank Group, gave a presentation on the big data strategies being deployed at the bank. The CBA believes ‘big data’ will make their business smarter, better, faster, stronger, by delivering the following results:

• Facilitating targeted growth, enabling margin expansion and predicting future demand
• Analysing customer interactions and behaviours for retention, reaction and competitive advantage
• Identifying economic trends, detecting fraud and threats and future customer preferences
• Supporting capital allocation, salesforce deployment and risk management

From BPO 3.0 to BPO 4.0
‘Big data’ is seen by many as the next strategic value-add for BPO and outsourcing. As organisations struggle with the challenges and opportunities offered by cloud computing and social media, there is an information explosion creating vast quantities of data. According to Luxford, the analytical, BI and reporting tools are available to tackle big data. What’s lacking are the processes with clearly defined objectives and structures, where there is insufficient understanding from business leaders of what big data strategies can deliver to their organisation.

Dr. Harish Kotadia, highlights how most organisations will struggle to analyse vast amounts of ever changing structured and unstructured data . There’s a significant opportunity for service providers to offer their client value added services in the area of ‘big data’ analytics, without heavy investments in specialised hardware and software. And it’s the cloud that will allow big data to be accessed anywhere at anytime.

In the upcoming issues of the sauce we will be examining the risks and challenges when it comes to implementing big data strategies and analytics, as well the range of services that will become available.

Today, The Sauce published the landmark 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 500 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 was sponsored by IBM and Fuji Xerox Australia.

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

Heralds the creation of a formidable top-tier player with 2012 revenues that will reach in excess of USD 1 Billion KEY HIGHLIGHTS OF THE NEW BPO DIVISION: Successfully transitions acquisitions including Intelenet Global Services in India, The Listening Company in UK and Excelior in Australia to fold into a larger BPO capability Potentially amongst the top 10 BPO players globally, top 5 BPO players in Europe, top 4 India based BPO players and the largest supplier of services in the domestic India BPO market. Now has one of the strongest on-shore capabilities amongst Indian BPO players To engage new markets like Africa, China, Latin and South America.

Serco, the international service company, announced the launch of a new global BPO division that will improve the services Serco provides to its customers and enable it to target global opportunities both in the public and private sector. Also referred to as the Global Services division within Serco, it heralds the emergence of a formidable top-tier BPO player, both within the international and Indian markets, with revenues in excess of $1 billion by the end of this year. Serco’s new BPO division reflects scale, depth of capabilities and the creation of a larger global delivery platform.

Incorporated as one of four business divisions within Serco, it brings together a number of BPO related operations and capabilities currently reported and managed in different Serco divisions. Thus it is an amalgamation of the contracts and companies that deliver business process services globally within Serco including Intelenet Global Services in India – a leading provider of business process outsourcing (BPO) services to the private sector around the world and a predominant player in the domestic Indian market; The Listening Company in UK; and Excelior in Australia – all leading providers of outsourced contact centre services in their respective domestic BPO markets.

The Global Services division has a workforce of around 50,000, over 150 clients, and a diversified footprint with a presence in 10 countries, 98 locations. The business will focus on five vertical markets – namely Banking, Financial Services & Insurance; Travel, Hospitality & Transportation; Healthcare, Utility, Retail & Manufacturing; Telecom, Technology & Online Services; and Media, Education & Government.

Tom Riall, CEO Designate, Global Services, Serco, said, “The evolution of the Global Services division supports Serco’s vision to create a leading international Business Process Outsourcing Company. We will now be reckoned as an end to end service provider offering the complete spectrum of business services to customers in the public and private sector around the world, by combining Serco’s front end service capabilities along with world class middle and back-office capabilities. Furthermore, the Global Services division will work alongside other regional divisions in order for Serco to deliver fully integrated services for our customers, thereby making us a one-stop destination for existing & potential clients.”