A rising number of large Australian companies such as Telstra, ANZ, Vodafone and
Macquarie Bank are utilising business-process outsourcing companies that are typically
located in either India or the Philippines. The lower cost base has enabled companies to
increase their operational efficiencies while strengthening margins. Typical activities include
inbound and outbound calls, but also an increasing range of more complex services that
include accounting, debt collection, software development and media campaigns.

Call centres in the Philippines have sustained considerable growth as Filipinos typically have
more of a neutral accent than Indians, partly due to it being a former American colony. This
is further boosted a ready-educated workforce in a country of approximately 100 million. The
Philippine government has also afforded tax breaks for companies setting up shop to a span
of eight years. The outsourcing industry is transitioning beyond call centres into more high
value work such as business procurement, information systems and healthcare such as virtual
nursing.

Offshoring trend

Offshoring to low cost countries has spiked among American and Australian firms during the
peak of the global financial crisis, as firms aim to reduce costs in light of weak demand.
Australian banks and telecommunication companies have spearheaded the offshoring trend
around half a decade ago. Small and medium-sized enterprises are closely following suit, as
they offshore back-office functions such as bookkeeping, customer service, graphic design
and select information systems functions. Although the impact of offshoring translates to
redundancies in local shore, it benefits local firms and employees by enabling them to focus
on more value-add activities and increase efficiency. Where the internet has enabled a
borderless market spanning several continents characterised by fierce competition, the move
to increase efficiency and boost competitiveness remain crucial.

Similar to the prominence of social media and the rise of cloud technology, the prevalence of
offshoring will increasingly go commonplace to the point that neglecting its presence can leave companies behind. As firms increasingly go global, commercial success is partly
contingent on forging collaborative relationships with other regions in the region. For
instance, Sydney-based start-up Posse has increased its development capabilities by
offshoring select positions. It is similar to Yelp in that it that it links recommendations for
food establishments using smartphone geophysical capabilities. Offshoring has enabled the
company to operate more efficiently and allow its onshore employees to focus on more value
added work. Without question, Australian companies need to continuously evaluate business
models and adapt mindsets to boost their competitiveness in the region.