NZ 'primed for process work'

By ADAM GIFFORD

New Zealand should become a major world centre of business process outsourcing.

That is the word from John McCarthy, research group director for Forrester Research of Cambridge, Massachusetts, one of the leading think-tanks on where technology is heading.

"The exchange rate is right, the time difference is not so much, and you have the bandwidth and collaborative technologies to do it."

McCarthy said the collapse of the dotcom bubble and the United States recession were changing the way technology was treated.

"We are looking at massive deflation in high technology."

No one was replacing hardware and application vendors were being forced to do modular software because large projects had been cancelled.

"It's all six-month projects, and what's making a big impact in the US is the coming online of Indian, Australian and even South African companies to do the system integration work."

McCarthy said the trend to outsourcing business processes and management of large applications such as ERP (enterprise resource planning) would accelerate.

"We see the really smart companies creating these process teams where there are people from different business units and from IT, and that's where a lot of IT will be absorbed into."

He said the internet was changing the way companies used technology.

"Now we have this communications structure virtually for free, companies are focusing not on automating the transaction but on automating the processes around the transaction: what leads you to make a decision; what flow of information tells you that you need to order more inventory from that supplier."

McCarthy said companies that had learned how to share information with suppliers and customers were recording huge productivity gains.

"The people who were both reworking and collaborating had on average 40 per cent cost savings."

He said a new set of vendors was emerging with electronic collaboration and internet-based businesses.

"The interesting thing is they are all subscription-based - people want to collaborate through an unbiased third party."