Anyone on the analyst circuit knows the larger-than-life antipodean, Phil Hassey, who’s spent countless hours on soul-destroying coach-class slogs from Sydney to the US to expound the virtues and opportunities in the Asia/Pacific region.
I personally got to know Phil when I was working in Singapore for analyst firm IDC (before I became a cynical blogger), when Phil led the Australian / New Zealand coverage for the firm’s IT/BPO research. I learned quickly that Aussies always make good “whinging” analysts – how many cultures do you know complain all bluddy day long, before hopping off to catch a few waves on Bondi beach at 4.30pm in the afternoon?
Anyhow, Phil’s no-nonsense style led him to establish the Asia/Pacific services research for Springboard Research, before branching out on his lonesome to start his own research venture, “CapioIT”. Well, we couldn’t let a good Aussie slip our gaping need to cover the Asia/Pacific markets, and we’re thrilled that Phil’s thrown hit hat in the horse’s ring to pony up a couple of BPO appraisals of the region for us in 2011. Let’s hear more straight from the Hassey’s mouth…
Phil Hassey muses over the Asia/Pacific BPO market landscape
I am very excited to have the opportunity to work with HfS and the team that Phil has successfully pulled together. As mentioned, I have known Phil for a long time now and have admired the work he has undertaken to drive research innovation in the BPO marketplace.
My first BPO research was undertaken in 2000, when I wrote one of the first reports on the Asia Pacific BPO market focused on CRM BPO. The future was bright at that time as the big offshore providers of CRM services such as Teletech and Sitel increasing investments in offshore centres, particularly in the Philippines with a plan for focus on delivery of services to local Asia Pacific clients. At the same time in late 2000, IBM stated at an AP analyst briefing that they would not be interested in the BPO marketplace.
Whilst a lot has changed in the 11 or years since, embracing of BPO has not been as strong as anticipated. BPO across the Asia Pacific is still a market with clearly unfulfilled potential both in terms of market demand and service provider capability. Obviously the two are linked. IBM, driven by CRM outsourcing through the Daksh acquisition is now a leader in non transactional BPO in the Asia Pacific region alongside Accenture. The call centre/CRM outsourcing market did not mature nearly as quickly as expected.
In Australia, the AP BPO market is at its most mature, however by US standards, unlike IT Outsourcing, it still clearly lags in terms of customer uptake. The last five years have seen a lot of interest in BPO, but ultimately limited commitment from enterprise. I like to joke that 2-3 years ago, there were more BPO pilots in Australia than at Heathrow or JFK airports. The reasons for the lack of enterprise commitment are varied, they include more organised labour forces in Finance and HR and customer care, and outsourcing fatigue through publicised IT Outsourcing problems. Highlighting the opportunity that exists in the market, the lack of providers means that supply side issues are just as important as buy side issues. Accenture and IBM aside, there are very limited services providers that have the requisite scale to successfully provide capabilities in markets in Asia Pacific. This is of course a chicken and egg situation. The deals need to be there to get the investment and I believe the deals will not happen until the investment is made. Some bold calls will be successful if researched well enough.
Across Asia more broadly, strategic BPO is even further from Australia in terms of maturity. The same issues as Australia remain, in a positive note increasing numbers of enterprises are becoming more familiar with the benefits of BPO. Many of the individual country markets do take their lead from a targeted number and type of companies, vendors should firstly identify these enterprises, then focus on them in order to drive BPO adoption more broadly.
Naturally enough, It must be repeated regularly that Asia Pacific is a large and incredibly diverse market that does not take kindly to being generalised in sweeping statements. We have half the world’s population and workforce. A strategy that works in Singapore may not work in neighbouring Malaysia; something that works in India will definitely not work in China. Understanding these subtleties is critical and without practical experience, my experience has highlighted that it takes time and several false steps before success can be enjoyed.