CEO's Message

With the fast-paced changes in the global marketplace today, organizations are continuously challenged to improve productivity and Efficiency while being burdened with increasing costs. Organizations are now searching for ways to increase revenues by securing access to cutting-edge technology and constantly innovating the way they do business. The time many executives spend on their organization's non-core competencies are seriously hindering growth. As a result of this, many organizations are now turning to a Business Process Outsourcing (BPO) solution to accomplish their objectives in order for executives to concentrate on more strategic functions, free up time and resources, and thus improve their business focus to concentrate on more competitive opportunities.

Today, organizations already engaged in a BPO strategy understand that the relationship with their offshore business partners is strategically critical to their own future success. BPO has recently seen increased debate on the inevitability of offshore outsourcing and the immediate socio-economic effects of change. Since BPO is still in the early stages of development, early adaptors are reaping significant strategic benefits and operational cost savings. While cost savings have been the most obvious benefit, increased efficiencies and domain expertise have become the primary growth drivers as well. BPO is no longer considered a standard back office business process, but is emerging as a flexible and powerful approach that business leaders can use to accomplish a wide range of tactical and strategic aims at a fraction of the cost.

Globally, Europe lags the United States in adopting outsourcing services. The United Kingdom is showing strong growth and penetration while Continental Europe is just now showing signs of acceptance of BPO. Language issues represent the greatest hurdles, but are being increasingly overcome with one-off business relationships. These highly successful early adoptions continue to fuel the BPO flames in the United Kingdom and Europe.

Outsourcing is not a new business practice. Offshore outsourcing has seen development since the early days of globalization in the form of low-cost manufacturing. Enabled by advances in Information Technology and telecommunications, Software Development and Call Center/Contact Center "offshoring" are now mature. More recently, we have seen BPO develop from a quiet business relationship to a full blown strategic necessity. Outsourcing has evolved from being solely cost driven to the development of subject-matter expertise and the leveraging of like business processes between unrelated industries. Over the next 5 to 10 years, offshore outsourcing will become a standard business function. It will become a competitive necessity, commoditized and readily available to smaller businesses.

All the significant research firms agree that BPO is a trend that is here to stay. Outsourcing will continue to gain momentum as the early adaptors today secure their position in the markets of tomorrow. Australia is currently a practitioner of end-to-end BPO, although offshoring as a sector only emerged within the last 5 years. Offshore BPO has largely remained untapped by Australian companies, with the exception of organizations with sufficient scale to utilize their captive offshore ITO and BPO units. Independent offshore BPO providers are only beginning to enter the Australian market, presenting an outstanding opportunity for early adopters to follow established trends in the United States and Europe. Today, the global BPO market is estimated at around US$140 billion and growing at a CAGR of 9.5%. Asia Pacific is growing at a faster rate of 11.8% but coming from a low base of US$10 billion. Human Resources Services leads as the most outsourced function.

Some specific reasons for outsourcing generally fall into the following main categories:

Reduce Costs. Offshore vendors have lower cost structures that leverage on cheaper labor. Vendors' pricing methodologies usually means that fixed costs become variable, thus reducing capital expenditure and cash requirements

Leverage Vendor's Expertise. Process and technology expertise accelerate re-engineering benefits and result in better quality and consistency. A large and competent labor pool translates to an ability to rapidly scale to high volume processes.

Improve Company Focus on Core Business. Free human resources for strategic functions and other purposes, and outsource functions that are difficult to manage and control. The application of metrics in vendor management free up management resources.

Competitive Capabilities. Low cost access to global capabilities through standardization, centralization and new technology.

Sincerely yours,

James M. Donovan
President & CEO
BPO Asia, Inc.


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