Offshoring and cloud computing to dent demand growth
Melbourne, Australia (PRWEB) January 31, 2014
Over the past five years, the Business Process Outsourcing industry has grown steadily due to increasing demand from downstream businesses. As Australian industries and businesses continue to grow, competition and operational efficiency has become crucial elements of a successful business. As a result, to remain competitive and reduce overhead costs, many businesses have stepped up the outsourcing of non-core business processes. Over the five years through 2013-14, the industry is expected to grow at an annualised 3.3% to $23.9 billion. The industry is made up of multiple back and front office functions, which increase operational efficiencies when run by specialist service providers rather than being performed in-house. According to IBISWorld industry analyst Ryan Lin, “this has been the decisive factor in revenue sustainability and has helped the industry withstand tough economic times earlier in the period”. In 2013-14, industry revenue is expected to grow by a further 3.1% as a result.
Despite the consistency of the industry, offshoring remains a significant threat to growth. Over the past five years, many downstream businesses have decided to offshore multiple business processes. Countries such as India and, more recently, the Philippines have been key beneficiaries to the offshoring of business processes. IBISWorld expects that this trend has become increasingly prevalent over the past five years – especially as IT service-heavy nations like India increase in technological sophistication. “The industry also faces the threat of downstream firms shifting business processes in-house as cloud-enabled systems help businesses streamline processes,” says Lin.
Over the five years through 2018-19, the Business Process Outsourcing industry is expected to grow. Competition from offshoring, as well as in-house operations, is expected to intensify. Countries such as India and the Philippines are expected to benefit, as functions like call centre operations continue to be offshored. Previously high margins are also expected to come under threat as competition within the industry picks up. Heavy automation and the optimising of existing outsourced services are likely to leave more room for industry players to compete in securing longer contracts. The industry's four largest players are IBM A/NZ Holdings Pty Limited, Chandler Macleod Group, Salmat Limited and PricewaterhouseCoopers.
For more information, visit IBISWorld’s Business Process Outsourcing report in Australia industry page.
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IBISWorld Industry Report Key Topics
This industry provides a range of third-party outsourcing services on a contract basis. Clients outsource specific operations and business functions, including both back office and front office tasks, in which industry players would operate, administer and manage based on defined and measurable performance metrics.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.