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Outsourcing trends in Asia

The Asia-Pacific region is poised to outperform the rest of the world, says Lim Kok Hin, Vice President and Head of Domestic Business Operations, Canon Singapore, in this exclusive interview. He outlines three main outsourcing trends in this growing region.

Is it true that companies are moving away from business outsourcing?

On the contrary, as the economy stabilises, businesses are starting to look at outsourcing as a way of reducing costs, taking advantage of skilled workforces, and improving their business processes.

In our experience, we see the trend of business outsourcing gaining momentum both regionally and locally. We are observing increasingly more organisations in Singapore being plagued with issues of labour shortages and productivity, and experiencing the pressure to increase productivity and drive innovation. This observation led us to launch Canon Business Services, our first outsourcing arm in Asia that allows companies to outsource their day-to-day operations such as print operations and document management, to enable them to focus on their core operations for growth and innovation.

As companies look to expand beyond their borders to create global brands, there is a growing need to focus on what really matters. Coupled with labour shortages in the region, and the focus on growth and innovation, we believe that increasingly more companies are turning to business outsourcing as one of the ways to maintain their competitive edge.

Can you point out some of the main outsourcing trends in the region?

The Asia-Pacific region is poised to outperform the rest of the world bolstered by multinational corporations expanding into the region and positive economic conditions. As a result of this growth, the IT outsourcing services sector is expected to grow in tandem.

With an increased focus on business outcome in the region, here are the three main outsourcing trends in the region that we've observed through our customer interactions.

One of the things we're constantly hearing from our customers is the importance of tighter governance to find more efficient ways to handle compliance, legal, and financial risk. Tighter governance is one of the trends that will continue to be enforced that companies will need to adapt to. Earlier this year, we launched Canon Business Services and we understand that each vertical have different certified requirements. For example, the healthcare industry has different certificate requirements compared to the financial industry.

Second, the tight economy has resulted in shifts in outsourcing pricing models. As the uncertain business landscape continues to evolve, outsourcing businesses will be refining with their pricing structures and contract terms. Overseas companies, in particular, will find this particularly challenging as they have to determine if they should streamline on a single service or continue to branch out into a variety of other areas. We are starting to see signs of this trend becoming more common place in 2013.

Lastly, shared services outsourcing will increase as businesses start to see the value in reaping economies of scale throughout their organisation. But more importantly, I believe that business objectives should determine not just outsourcing strategy but IT as well.

Can you share with us your company's perspectives on the outsourcing impact on IT departments? How does it help IT become more efficient as a function?

Drawing from our experience with Canon Business Services, it was created to help organisations better focus on their core business. This stimulates innovation in both core and non-core areas. By focusing on core business, IT departments through outsourcing non-core functions will be able to avail resources. Service providers will also be able to provide innovation in non-core processes. The service intends to address current needs of businesses by enabling them to outsource information intensive processes, communications and administrative functions.

When we first launched the service in Singapore, we received significant interest in the service from businesses in the finance and advertising industries. Through outsourcing, employees can also benefit in terms of gaining skills and knowledge of managing these day-to-day functions. As a result, we see outsourcing as one of the ways for businesses to become more efficient through allocating their resources in a way that drives business value while ensuring cost efficiencies.

What are Canon's plans for the next one to two years for the region?

One of our plans over the next one to two years would be to ensure the successful rollout of Canon Business Services that was first launched in Singapore with launch plans for India, Hong Kong, and Malaysia within this year and the same services in Vietnam next year.

We decided to adopt this phased approach for Canon Business Services to better understand local operations in the region and what they need. We want to focus on areas with the biggest market potential and where we can deliver.

If you have a message for IT managers, what will it be?

IT managers need to cut through the technology hype and not be pressured into adopting any particular technology and trend. At Canon, we believe that each business is unique and that these decisions need to be drive by the overall business objectives.

While today's business landscape constantly changes and businesses are under increasing pressure to maintain their competitive edge, it is more important to take a phased approach when considering new implementations to ensure that they reap the full benefits promised.

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