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BPO an Opportunity or a Threat for CIOs? IDC Reveals All!

  • 17 October, 2005 15:12

<p>NORTH SYDNEY, 17th October, 2005 – The Business Process Outsourcing (BPO) wave is rapidly rising in Australia and New Zealand. According to IDC, BPO spending in Australia is expected to grow at a CAGR of 11.4%. Australia and New Zealand had a combined BPO spending of $2.38 billion last year and were two of the biggest contributors of the total Asia Pacific(excluding Japan) BPO spending.</p>
<p>However for organisations looking at riding this BPO wave, it is important for CIOs to understand the impact this would have on their internal IT divisions. According to the latest IDC ITEyewitness report titled "Who Let the Processes Out?" CIOs need to take charge from the very beginning if their organisation is looking to outsource its business processes. They need to understand the intricacies involved and ensure that IT is considered as a key stakeholder in the BPO arrangement.</p>
<p>As business processes become increasingly reliant on technology, the IT component of BPO is set to increase. IDC expects that by 2008, 23% of BPO spending will consist of IT-related services, an increase of nearly 100%. As a result, outsourcing these business processes will have an increasing impact on information technology departments.</p>
<p>The report highlights how CIOs can use BPO to change the perception of IT from merely a support function to an effective business enabler. As IT executives typically work across different departments, they are probably in the best position to understand the different business processes and the underlying interdependencies. This results in IT executives playing a critical role in the outsourcing arrangement and an increasing possibility of IT being seen as a source of competitive advantage.</p>
<p>"There is little doubt that BPO has an increasing impact on IT. To gain maximum efficiency, CIO's need to ensure they maintain control over strategic areas whilst adapting to these changes," said Vipul Bhargava, Analyst, I.T. Management Programme for IDC Australia and New Zealand.</p>
<p>Improved business continuity/disaster recovery and assistance with regulatory compliance are some of the other benefits that IT executives can derive from BPO depending on the model chosen. Whilst maximising the benefits, IT executives need to be careful with some of the challenges such as increased complexity of information management that BPO can bring along with it.</p>
<p>IDC concludes that IT executives will have a greater than ever role in facilitating a BPO decision and/or the implementation. But in order to ensure that they are not dealing with terms they cannot abide by, IT executives need to take the lead in BPO discussions.</p>
<p>To purchase the IDC IT Eyewitness report titled, "Who Let the Processes Out?" please contact Catherin Bennett on phone 02-9925-2259 or email</p>
<p>About IDC's ITEyewitness Reports:
ITEyewitness is one component of IDC's Management Portfolio for IT. Designed as a "How-to-do-it" report series for IT managers and practitioners, ITEyewitness focuses on topic areas that are proving challenging for IT Executives and rank in their top priorities. Each report in the series examines recent statistics from IDC surveys, actions for success, real-life success stories and case studies with clear and concise proven practices.</p>
<p>Additional information can be found at</p>
<p>For press enquiries please contact:</p>
<p>Vipul Bhargava
IT Analyst, IT Management Programme
Phone: 61 2 9925 2254</p>
<p>Click here to view the press release online:</p>
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