Singapore, BPO, Market, Growth
Singapore's BPO market to grow 13%
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'Singapore's market for BPO services will grow 13 per cent a year between 2004 and 2009,' Conrad Chang, IDC's senior market analyst for BPO research for the Asia-Pacific, told BizIT.
As for the Asia-Pacific outside of Japan, the BPO market will grow 15 per cent a year between 2005 and 2009 to cross US$12 billion - from US$5.4 billion last year.
'This growth will occur despite the challenges presented by the size and complexity of the region's BPO services market,' he said.
IDC defines BPO as outsourcing activities that are more aligned to corporate strategies and objectives.
'We do not include processing services under BPO,' Mr Chang said. 'Processing services are more administrative, volume based and less strategic. Hence the popular phrase 'your mess for less'. It is high volume, low value type of work and different from BPO.'
Much of the BPO today is done primarily by large organisations and refers to outsourcing business processes and functions such as online payroll, order management, transaction processing, and benefits administration.
'Singapore should not try and compete with India for low value outsourcing work but position itself for high level, high value BPO type work because of cost disadvantages and the smaller number of workers available here,' he said.
'The BPO market in Singapore is considered semi-mature and more geared towards finance and accounting, human resources and logistics.'
Comparatively, Asia's BPO market is more complex because it contains a mix of opposites - semi-mature BPO markets such as Australia and New Zealand, and those in their infancy such as Malaysia and Thailand, as well as major outsourcing and offshoring exporters, such as India.
In Singapore, the financial, manufacturing and high-tech sectors are the more favourable adopters of BPO and processing services. That's because cost and process efficiencies are critical to these businesses.
'BPO allows companies in these sectors to focus on their core and farm out the none-core activities that could otherwise not be done cheaper in-house,' Mr Chang said. 'For example, with the onset of Sarbannes Oxley, companies are turning to accounting firms for finance-related BPO services on processes and regulations to ensure compliance.'
Manufacturing companies are turning to vendors who can help in quality improvement BPO services such as ISO-9000 and ISO-14000, Six Sigma, and others so as to boost productivity and efficiencies.
'It also helps that Singapore has a well set up judiciary and law enforcement system which makes security and compliance issues more easy to manage,' he added.
Source: IT AsiaOne
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