Western Australia – Can it drive BPO to maturity in Australia?


BPO maturity in Australia. The mere phrase is enough to inspire fear and loathing for any seasoned outsourcing pro.

As anyone who has listened to me since I started as an analyst late last century I have lamented reasons for, and implications of, the at best modest uptake of Business Process Outsourcing in Australia. Uptake of BPO away from the commoditised end of the market (Payroll, Contact Centre) is distinctly poor in comparison with both other geographies, (US, Canada and UK) as well as by comparison to IT outsourcing within Australia.

There are many reasons for this:

  • Outsourcing fatigue from mixed ITO experiences
  • Lack of vendor competition in the transformational BPO space
  • (Typically unfounded) concerns over offshore outsourcing.

The banks have definitely had interest, as have some Telco’s (e.g. Procurement by IBM at Telstra, F&A in the Financial Services sector) but the shift has not accelerated in a way that anyone had expected or hoped.

For a couple of years I have been watching Western Australia as a potential accelerant for the BPO market in Australia. I am getting confident in the likelihood of a translation from intent to action. This applies to both the public and private sectors. The key factor linking both the public and private sector demand for BPO is the cost and comparative availability of human resources in Perth let alone regional locations. (The capioIT report on identifying delivery locations in Australia completed in 2012 found no Western Australian locations in the top 15 across Australia http://wp.me/p15cZf-4K  )

From a public sector point of view, the ideology of the Western Australian government is clearly more aligned to a goal of smaller, not larger government. Technology wise, the government in WA has is typically considered to have under invested in technology and taken a very parochial approach to vendor engagement. This will perhaps paradoxically be both a constraint and a driver in the market.

Clearly from a private sector point of view, the Mining and Oil and Gas industries are key. Labour is difficult, expensive and often globally dispersed. The engineering firms are in a similar position. This labour challenge aligns well to a BPO (or captive) program with both onshore and offshore delivery. There is no real nearshore alternative in Western Australia, the geography does not allow it, but the typical alternative offshore locations exist, in addition to potential for some locations in Queensland, and Adelaide that may have domain experience.  This geographic factor is a challenge of course for public sector BPO in the state.

I anticipate that the investment in the initial stages will align to HR and F&A BPO. If a number of anchor organisations or agencies are able to pull together a deal then it will with some fortune and great execution from vendors lead to a prolonged growth in Western Australian BPO. It may well be the magic to kick start the industry shift from potential to reality across the rest of Australia.

If you require further information, please contact Phil Hassey,  Founder capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology in emerging markets. Phil may be contacted by email below,

phil@capioit.com

About capioIT - Phil Hassey

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world. phil@capioit.com +61422231793
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2 Responses to Western Australia – Can it drive BPO to maturity in Australia?

  1. Pingback: Down And Out In Down Under | sambhalkezabaan

  2. Pingback: Western Australia – Can it drive BPO to maturity in Australia?  | The Sauce | Bringing you the BPO news that matters | BPO News, Business and Services Australia | Outsourcing Asia | Information on Outsourcing and Offshoring | Outsourcing Issue

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