Between the lines: Big is always better when location doesn't matter

The globalisation made possible through e-commerce brings wonderful opportunities for Kiwi businesses ... but it also has its downside.

One example is AMP Banking's decision to move most of its operations to Sydney.

On the face of it, the direct banker's decision isn't surprising.

Founded here five years ago as Ergo, it has struggled to make money.

And with parent company AMP's problems digesting the recently acquired GIO, the economies of scale offered by centralising operations in Sydney have finally proved irresistible to AMP management.

But even without those company-specific pressures, the temptation to service New Zealand from Australia must have been great.

Businesses such as direct banking, which are based on telephone contact between company and customer, can easily be based away from their markets.

Back-office operations can be centralised, leaving only a local sales and marketing force.

There are pitfalls.

Hearing Aussie accents on the end of the line is usually a big turnoff for Kiwis.

AMP Banking believes it can solve that problem by ensuring calls from New Zealand are answered by Sydney-based Kiwis.

Another pitfall is that the greater the geographical area call centres have to service, the greater the potential for requests to be unsatisfied.

But the local financial services sector has been losing its Kiwi identity for the best part of a decade.

Aussie firms have been doing most of the buying, and the bigger economy will always be an odds-on favourite when it comes to deciding where the headquarters will be.

AMP Banking managing director Stephen Balme says Australia is the region's financial centre, and has the best technology available.

That's a worry. How many more location-independent businesses are going to leave New Zealand?

The good news is that while New Zealand may be losing phone-based businesses to Australia, e-commerce also opens up greater opportunities beyond the arid continent.

One example is the increasing number of high-tech local companies making money by using the internet and solving problems passed on to them by American customers at the end of their working day - the start of ours.

So long as we remain a time zone ahead of the Aussies, that's an advantage we'll continue to enjoy.