HR BPO growth

An article from Workforce.com about the trend in the US towards BPO of HR, including the associated technology. I find this interesting from all sorts of angles.

Firstly working for a software vendor, does it mean we need to jump into bed with every BPO provider in Australia to stay in business? We already do business with several payroll providers and outsourcers (NPS, Datacom, APS) but will it be enough?

Secondly from a trend point of view, will it work and become mainstream in Australia or remain a US focus activity? We see so many trends come out of the US and not make it big in Australia. I question if Australia has the economies of scale to support large scale BPO. However we have been outsourcing payroll and superannuation for a long time, so maybe it is just an extension.

Personally while I see the potential benefits I am not sold on the success of BPO, this could just be because of my experiences at Nortel Networks with PwC, which at the time was the largest deal ever and has since been dispanded, the official word was not due to failures from either parties but due to changes in the marketplace. Essentially Nortel went from a 100,000 person company to 35,000 and the business case just did not hold up. Although news from internal people at the time told a different story, which is always the way. Some of the press from the deal can be found :-
AMR Reasearch (You must sign up to read)
IT Week UK

PwC has since sold their BPO business to Exult for US$17 millon.

Outsourcing has failed in some organisations and hopefully many of these new deals have learnt from the past. Issues such as savings not realised, lose of key employees in the transfer (read HR issues), failure to achieve service deliverables, and even reduction in service from pre BPO days, all need to be addressed for it to be a success.

I guess this is just another thing for us all to keep an eye on.