NEW ZEALAND Law and Practice Contributed by: Liz Blythe, Troy Pilkington, Emma Peterson and Craig Shrive, Russell McVeagh
Russell McVeagh Vero Centre 48 Shortland Street PO Box 8 Auckland 1140 New Zealand
Tel: +64 9367 8326 Fax: +64 9367 8163 Email: contactus@russellmcveagh.com Web: www.russellmcveagh.com
1. Market Conditions 1.1 IT Outsourcing
Increasingly, organisations that have IT at the core of their service offering are also demonstrating a desire to outsource both back-end and customer-facing IT functions to third-party IT outsource service providers. 1.2 Business Process Outsourcing (BPO) Business process outsourcing has grown in line with IT outsourcing developments. However, solutions being procured are increasingly digitalised and a gen - eral convergence of BPO and IT outsourcing has been seen in many areas, including HR, ERP and finance functions. 1.3 New Technology Emerging technologies (eg, AI, blockchain, IoT and next-generation robotics) are not new to the New Zealand market. It is also well understood that such technologies provide opportunities to solve business issues, improve efficiency and increase profitability. The adoption of these technologies had previously not been as widespread in New Zealand as was perhaps initially expected, but particularly in the GenAI space, we have seen significant adoption activity in the last 12 months. As is the case in many jurisdictions, emerging technologies have suffered the effects of regulatory lag, which has caused uncertainty in terms of how regulators and legislators will react to novel or perceived high-risk applications. As such, it seems that many organisations have been wary of invest - ing significant resources in new technologies early on – given that potentially costly re-engineering may be required as a result of subsequent changes in the law.
New Zealand organisations continue to outsource in-house IT capability to local and global IT service providers and to consolidate previously multi-sourced environments with strategic partners. Key drivers tend to be: • reducing cost and complexity; • taking advantage of specialist capabilities and modernising ageing estates; • increasing efficiency; and • improving the security, performance and user experience associated with IT systems. There has been a continued shift towards cloud com - puting, with organisations now moving away from owning or contracting for physical IT assets in favour of leveraging third-party cloud environments (IaaS) and utilising software (SaaS) and platform (PaaS) solutions. Among other things, this allows organisa - tions to enjoy the cost efficiencies and other benefits associated with a fully scalable model. Further areas of development include: • solutions that increasingly offer value-added ser - vices powered by AI and machine learning; • core systems and functions (eg, payroll/HR, enterprise resource planning (ERP), finance, and – increasingly – security) commonly being out - sourced to third parties on an end-to-end “as-a- service” basis; and • internet of things (IoT) capability.
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