NZ emerging as key nearshoring location for Australia

By Dylan Bushell-Embling
Monday, 07 July, 2014

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New Zealand is emerging as a key contact centre nearshore outsourcing location for Australian organisations, due in part to a cost discount of up to 30%, according to Ovum.

In a new report, Ovum argues that the concept of nearshoring is least mature in Asia-Pacific, due to the region’s historically small number of demand markets for offshored contact centre services.

But the research firm expects it to become increasingly important for APAC enterprises to be able to deliver contact centre services from locations closer to home.

Australia offers the ‘lowest-hanging fruit’ for nearshore outsourcing vendors in the region, because of the presence of offshore contact centre delivery in the market.

Due to to the potential cost savings and the linguistic, cultural and commercial alignments, New Zealand is well placed to serve as a nearshoring destination for Australia.

But according to Peter Ryan, Ovum principal analyst for global IT services, outsourcers looking to take advantage of the emerging demand for nearshoring services in APAC could face an uphill battle.

“The challenge will be to navigate a very disparate selection of locations in order to choose the right supply markets based on language, cultural affinity and capability,” he said.

Sourcing nearshore delivery for Northeast Asia is a particular challenge, Ryan said. Cultural issues including the introversion of Japanese consumers mean it is unlikely to become a significant demand market for nearshoring, but there is optimism that South Korea could emerge as one.

Image courtesy of NASA Goddard Space Flight Center under CC

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