Anz Offshoring Strategy
ANZ | OFFSHORING
Background
This strategic report of ANZ’s offshoring strategy examines the effectiveness and drivers of ANZ’s decision to move towards outsourcing internationally, analyses the impact of ANZ’s offshore programs on stakeholders, explores key risks and opportunities and evaluates the success of ANZ’s offshore system.
A | Strategy Analysis
February 2012 saw ANZ confirm job cuts to 492 permanent employees, 100 of these positions to be moved overseas. In early 2013, ANZ again advised 70 “back office” employees in their wealth division that their jobs were being relocated to Bangalore in India. More recently, in the June quarter of 2013 ANZ have announced that due to the low credit growth environment and the need to look for more effective and cost reducing strategies, they are considering moving close to 600 call centre jobs from their South Melbourne office to New Zealand and the Philippines. According to the Financial Sector Union 3,134 ANZ jobs have been shipped overseas since 2007.
Moving Offshore | Driving Forces
The current Australian economic climate and cost savings derived from labour arbitrage have resulted in ANZ pursuing an offshore strategy to maintain profitability levels.
Internally the offshoring strategy was put in place to enable the bank to improve productivity, access skills and processes unavailable locally and assist in developing an overseas presence. It also believes that adopting the strategy will allow ANZ provide superior service to its regional customers. However, the fundamental decision to pursue moving certain roles overseas was cost & margin management. As aforementioned, external factors such as low credit growth and the soft economic environment faced by Australia has tightened profit margins and slowed growth for ANZ, this led the Bank to look elsewhere to deliver dividend growth and returns to its shareholders. Labour cost saving opportunities were identified as an ideal approach to achieving
Background
This strategic report of ANZ’s offshoring strategy examines the effectiveness and drivers of ANZ’s decision to move towards outsourcing internationally, analyses the impact of ANZ’s offshore programs on stakeholders, explores key risks and opportunities and evaluates the success of ANZ’s offshore system.
A | Strategy Analysis
February 2012 saw ANZ confirm job cuts to 492 permanent employees, 100 of these positions to be moved overseas. In early 2013, ANZ again advised 70 “back office” employees in their wealth division that their jobs were being relocated to Bangalore in India. More recently, in the June quarter of 2013 ANZ have announced that due to the low credit growth environment and the need to look for more effective and cost reducing strategies, they are considering moving close to 600 call centre jobs from their South Melbourne office to New Zealand and the Philippines. According to the Financial Sector Union 3,134 ANZ jobs have been shipped overseas since 2007.
Moving Offshore | Driving Forces
The current Australian economic climate and cost savings derived from labour arbitrage have resulted in ANZ pursuing an offshore strategy to maintain profitability levels.
Internally the offshoring strategy was put in place to enable the bank to improve productivity, access skills and processes unavailable locally and assist in developing an overseas presence. It also believes that adopting the strategy will allow ANZ provide superior service to its regional customers. However, the fundamental decision to pursue moving certain roles overseas was cost & margin management. As aforementioned, external factors such as low credit growth and the soft economic environment faced by Australia has tightened profit margins and slowed growth for ANZ, this led the Bank to look elsewhere to deliver dividend growth and returns to its shareholders. Labour cost saving opportunities were identified as an ideal approach to achieving