According to a new report from IDC Australia , most of the activities that are taking place offshore are lower value transaction and processing.
Activities requiring independent decision making are less likely to be offshored. The offshoring of back-office processing is driven largely by the fact that these activities do not require independent decision making or discretionary action on the part of the outsourcer. The customer is not relying on an offshore provider's discretion but paying the provider to carry out a set of discrete, rules-based activities.
The report titled “Australia Business Process Outsourcing 2008-2012 Market Forecast and Analysis” indicates that activities that require more strategic direction or discretionary decision making are either not outsourced at all or are sourced to an onshore provider. For example, finance and accounting is largely controlled by generally accepted accounting principles and government regulations. This rules-based approach makes finance and accounting a more attractive business process to offshore. End-to-end procurement, on the other hand, requires deep knowledge of local providers and the skill and independent discretion of the provider to negotiate on behalf of a customer, making it a less attractive target for offshoring.
Offshore business outsourcing providers are targeting the market with messages about partnering hand in hand with customers to create strategic vision that leads to business transformation. Vendors appear to realise that to move up the value chain, customers need to know that their offshore provider can do more than just back-office processing.