Feb 2016

What is the future for Offshoring?

By: Odyssey Publication
Tags: Offshoring, Outsourced Services

In December 2015 the CA’s future[inc] released a report on the future of offshoring.

Globalisation, technology, reduction in barriers to services trade and pressure on fees have impacted outsourcing and offshoring. Labour is no longer tethered to fixed capital and tasks can now easily be outsourced offshore or even automated via the cloud.

With the demographic tide turning, Australia will have challenges in maintaining growth in living standards over time. Sharp improvements in productivity gains are needed. Offshoring can play a key role in this.

Offshoring can enable organisations to operate more effectively and flexibly. Indeed Australian organisations can offshore lower-value services and specialise in higher-value services that can then be exported to other countries. Within emerging economies, particularly in high-growth regions like South East Asia, rapid economic development has brought with it a new generation of highly educated, young employees.

Offshoring is likely to have an increasingly significant impact on Australian and New Zealand services organisations in the future. Although offshoring is already widespread in the services sector, there are areas for expansion as organisations consider more complex functions as part of the offshoring decision. With higher rates of education overseas, and higher levels of attainment, the scope and complexity of tasks that may be outsourced increases.

Continued growth in wages and employment in business services suggests that Offshoring has not had a substantially adverse effect on on jobs and growth in the domestic services sector.

While it was traditionally about cost cutting of distinct back-office functions, offshoring has become far more complex and its use continues to evolve.

More information available from CA’s Future[inc] website.