As we are coming to the end of yet another eventful year, I thought that it might be a good idea to ponder upon what next year will bring.
I believe that we will still see even more concentration on lower operating costs as companies try to survive in an ultra competitive environment, and we will see more ‘Green’ initiatives in the way that good companies go about their business.
Will we or won’t we have a US double dip recession?
We hope not. However, economists in the US doubt consumers can keep spending like they did in the northern summer without actually earning more. Consumers are already struggling with higher prices for basics like food and petrol. For spending gains to be longer lasting, employers will need to hire more people and that’s not looking very promising. In recent months, US job growth has stagnated and employers have only added about 75% of the number of jobs needed just to keep up with population growth. I believe that it will be hard for the US to justify sending jobs offshore with nearly 20 million people on the unemployment list. We have heard of a number of BPO projects being repatriated and companies using that as a marketing edge. That will cause a slow down in BPO activity in this part of the world as most large projects come from America.
This will in part be offset by the acceleration of Shared Services. Next year will be the year when Shared Services comes of age, especially in Australia. It has reached the tipping point and is just about there or there about. I believe that Shared Services will become a very important part of the BPO value chain and move offshore in an accelerated manner. The cost efficiencies will be too compelling for companies to ignore and will dictate the offshoring of non-core services.
We are going to hear a lot more about China next year. We believe that China will have little or no impact on BPO in the broader region, but it will all be about internal growth. There will be fantastic opportunities to sell consulting services into China as they gear up to service their own market. Just remember that over 60,000,000 people took an international holiday out of China last year and their middle class is growing very quickly.
The cloud finally seems to be getting traction and organisations are starting to get their heads around the cost savings, such as no infrastructure costs and the efficiencies of centralized and standardized databases. Converging technology and the further blurring of the lines between devices like smartphones, tablets and laptops and an emphasis by the cloud players to develop mobile computing applications so that people can access data anywhere, anytime anyhow will have a dramatic impact of its uptake.
Online shopping will offer cost savings to consumers of up to 50% and will drive competitive savvy companies to offer BPO customer support behind their shopping websites as a way of establishing competitive advantage.
We believe that with inflation set to stay around the target set by the Reserve Bank, Australian economic growth in line with the long-term trend and unemployment broadly steady, there will be no need to move interest rates upwards to put a break on the economy.
The Australian dollar will still stay at its record highs, which will only amplify the cost difference between Australia and less expensive BPO Asian destinations. The Australian call center outsourcing sector will really start to shake itself out next year, and we expect to see a lot more mergers and acquisition activity and maybe some players withdrawing from the market altogether.
Source: The Sauce
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