Category Archive: Outsourcing News

1. Staff Retention in Philippine BPO Industry is Improving – Survey

   February 9, 2017 12:17 pm 1 Comment

   

   Less employees working in the business processes outsourcing (BPO) sector in the Philippines are reportedly quitting their job due to improved conditions.

   It has been reported that from 70 percent attrition rate in the IT-BPM sector, the figure is now down to 50%, the Manila Bulletin reported in August 2016.

   Among companies seeking to outsource in the Philippine BPO sector, high staff turnover rate is a big letdown.

   But this improvement is seen as a continuation of previous surveys on the attrition rate in the outsourcing sector.

   A case in point is the 2015 survey by global professional services firm Towers Watson, which revealed that the 20 percent drop in the attrition rate in the Philippine BPO sector reflected the lowest ever since 2007.

   In 2011, the BPO sector registered 33 percent attrition rate while this reached 24 percent the following year.

   Sourcing Outside NCR

   Many experts claimed that the Philippine BPO industry are adopting strategies to keep their employees.

   According to Towers Watson (Philippines) global services practice head Vangie Daquilanea, companies are learning new strategies in talent acquisition.

   Daquilanea added BPO companies are expanding their local operations outside the National Capital Region (NCR).

   Today, it is not impossible to see BPO companies sourcing high-value talents from the provinces like Cebu, Davao, and Southern Luzon. In effect, this movement has affected the attrition activity in the Metropolitan Manila.

   Higher Salaries, Other Factors

   Another possible reason why outsourcing employees are staying with their companies – apart from training, government support and continuous education – is the increased salaries.

   According to Towers Watson, many BPO companies reward high performing employees while non-performers are given zero to less increases. For these companies, using Performance Matrix emphasize compensation principle of paying for performance.

   Unlike employees from other sectors, employees working in the BPO sector enjoy compensation mix which promises high guaranteed compensation.

   There are other Philippine BPO employees who receive a minimal annual performance bonus, which is equivalent to 1 to 1.5 months’ pay.

   BPO companies also allot budgets for the health and wellness of their employees. The Towers Watson survey revealed how employees in this industry are well-taken cared of by their employers.

   Employees in the outsourcing sector are usually offered as perks stress/risk assessment programs, health screening, counselling, fitness competitions, and smoking cessation programs.

   Another interesting observation has been how young people are exploring new career paths in the same sector.

   Beefing Up BPO Employees of the Future

   Benedict Hernandez, chairman and president of the Contact Center Association of the Philippines (CCAP), stressed the importance of continuous education to help upgrade skills and build capabilities of BPO employees.

   In the past, the business processes outsourcing (BPO) sector is only known for the following services it provide foreign companies: data entry, directory assistance, and call center outsourcing.

   A lot has changed in the country’s outsourcing sector over the years, especially on how services are offered to offshore companies.

   Today, Philippine outsourcing firms can confidently offer middle to higher-value services, including data analytics, infrastructure technology, social media marketing and more.

   Other developments include the expansion of what the voice segment of BPO entails in the late 1990s. Today, voice segment include email, chat, social media, multi-channel and omni-channel support.

   More recently, there has also been a bigger emphasis on giving improved lead generation, customer loyalty and retention, and increasing sales revenues through data analytics, and the likes.

   An IT-BPM Roadmap 2022 by Frost & Sullivan confirmed this development, as it predicted how voice tasks will continue to fall by 28 percent while mid-skilled tasks will see a dramatic surge by 7 percent.

   Companies offering complex services that require high-skilled tasks gets to enjoy the surge in demand for these category.

   Frost & Sullivan predicted a 48 percent rise in demand for high-skilled tasks.

   This roadmap showed that a mere 16.6 percent ($166 billion) of the $1-trillion sourceable work across the globe have been outsourced.

   Out of this outsourcing pie, the Philippine outsourcing providers account for $22 billion. Up this date, the Philippines remains the top global destination for outsourced voice services.

   Under the 2012-2016 roadmap, the country’s IT-BPM sector eyed for $25 billion in revenues and 1.3 million jobs. According to the roadmap, the voice sector accounts for 70 percent of the country’s IT-BPM industry.

   References:

   http://2016.mb.com.ph/2016/08/14/it-bpm-attrition-rate-dramatically-improves/

   Why staff turnover in Philippine BPO industry is falling

2. Outsourcing IT Services: Five Steps for Business Success

   May 27, 2013 11:03 am 1 Comment

   

   Outsourcing can bring tremendous benefits when properly used and understood fully well. Organizations outsourcing their business and IT processes shouldn’t expect the strategy to miraculously act as the ‘panacea’ but a bridge to help in their search for rare talent and access to innovation. This brings us to the bottomline of our story: outsourcing customers must pay attention to knowing the main principles of IT outsourcing.

   Organizations that outsource their information technology functions will continue to increase, according to The Computer Economics IT Outsourcing Statistics 2011/2012. From only 6.1% of total spending that went to service providers in 2009, the figures went up to 7.1% in 2010. The percentage of firms’ total IT spending to outsourcing is seen going up in 2012.

   Here are simple tips to make IT outsourcing a true success.

   Establish a clear goals. There is no shortcut to success. Make sure to share with your outsourcing partner the project goals and requirements. It will be of help for the service provider to understand your project goals if you provide all details of the project.

   Define scope and schedule of your project. What you want to reach with your project must be clearly articulated to your service provider. Normally, organizations set out a clear statement containing important information such as business and schedule requirements. Project cost can quickly spiral out of proportion if you do not provide a realistic and clear project scope and deadline.

   Choose provider which can offer value and quality. Some organizations rely too much on brand and price. High-price doesn’t always necessarily equate to quality nor low-price can yield more results. Most experienced mangers would tell you to research very carefully your provider and see if they can render both good value and quality output.

   Review portfolios and sample works. Sometime in the past, the outsourcing company may have already done a project similar to what you currently need. Look for these works and match them with your expectations for value and the approach of the provider in doing works. If you really want to make sure your prospective outsourcing provider knows or understands your needs, ask them to provide you with a draft of their work plan. But please respect that your contractor works for a living and their services are not given out free of charge so don’t request them to provide you with a completed work.

   Work with a compatible provider. As well as cultural compatibility, make sure your IT outsourcing’s employees are compatible with your organization’s culture, communications skills, experience and approach to work. Being compatible with your business partner is important because they will become part of your company.

   Of course all these five steps are not complete as there may still be more that you can use to gain from your outsourcing relationship with a contractor. Because as in other types of partnerships, your organization and your service provider will need to maintain mutual respect and respect.

   [Source]

3. Non-Voice Business Process Outsourcing: Is this the ‘Hidden Jewel’ for Philippines?

   May 24, 2013 10:53 am 2 Comments

   

   After earning a spot as the most sought after offshore destination in the voice-based outsourcing sector, the Philippines got another reason to rejoice. The country’s non-voice business process outsourcing (BPO) is seen as another gold mine for growth and opportunities.

   In the past years, the Philippine outsourcing space recorded impressive growth figures. Just last year, the whole industry generated revenues totalling to $13-Billion. According to the Business Processing Association of the Philippines (BPAP), it expects the country’s non-voice outsourcing space to add up to the total outsourcing revenues in the forthcoming years.

   An Everest Group report entitled, “Healthcare BPO Is a ‘Hidden Jewel’ For the Philippines’ Global Services Industry,” indicated the tremendous growth posted by the country’s health BPO.

   The healthcare BPO segment increased fourfold over the past two years. From the US$102-Million revenues generated in 2010, revenues of the healthcare BPO sector jumped to US$430-Million by the end-2012, suggesting this non-voice sector is one of the fastest-growing among the country’s IT-BPO industry.

   The report also indicates that the country now holds a large pool of US-licensed nurses. More than 6,000 nurses are being trained every year, which suggests that this figure makes the Philippines far ahead of the domestic demand.

   Non-voice BPO works wonder for the Philippines, mainly due to its huge talent pool. It also boasts of a high level of cultural compatibility with that of the United States. Plus, the Philippine educational system follows the US standards.

   Other than healthcare outsourcing, the Philippines command quite an impressive feat in the other areas of non-voice outsourcing. Tholons, one of the world-leading advisory firms today, sees the recent foray of outsourcing service providers in the country into non-voice areas like software development and IT outsourcing, animation and game development, and healthcare information management (HIM) outsourcing.

   Tholons expects the country to also penetrate other markets outside the US. Local outsourcing firms are offering their services to Australian small and medium-sized enterprises as well. Tholons identified Cebu as an attractive destination for both voice- and non-voice BPO operations. In its ranking, Cebu got 8^th place in Tholons’ top 100 global outsourcing destinations.

4. Is Outsourcing included in your corporate strategy?

   April 29, 2013 10:12 am Leave a Comment

   

   Short quiz! What are the advantages of adopting outsourcing model in your corporate strategy? a) cost reduction; b) improve process; c) access to innovation and; d) talent. If you answer all four choices, you got it all correct and you pretty understand how this strategy works.

   If outsourcing is not yet part of your organization’s shared services or you are soon considering signing a contract, it will not hurt to consider adding your outsourcing strategy to your next corporate strategy planning.

   Don’t discount that you are a startup and you don’t need a corporate strategy! Wrong! Even if you are a small or medium-sized startup, coming up with a corporate strategy should still come on top of your priority list. With a corporate strategy, you can get a full picture of what your company wants to achieve, how you plan to reach your targets and then grow. It can also serve as a blueprint to guide your overall internal and external business directions.

   Chances are high that a well-executed outsourcing strategy aligned with your corporate strategy could very much offer leveraged opportunities to your organization. Yet some challenges remain, particularly how you’ll do the alignment of  your outsourcing strategy with your corporate strategy.

   Here are some tips for you on getting it right about aligning your corporate strategy with your business process outsourcing goals, and vice versa.

   • Don’t focus on the problems. Dwelling too much on problems will hamper and cause strain in your motivation to move forward. Focus on solutions instead. Alignment of your business processes and IT strategies must be a top priority in your organization. Some organizations who tried managing business processes and IT strategies independently experienced lower quality results.

   • Plan your Future. If you still feel you only need to deal with what’s presently at hand, you are mistaken. Successful organizations plan. They develop comprehensive, multi-process, and multi-year plan to execute their target operating model. If you are a startup, don’t expect you can manage all the change overnight. Hence, your multi-phase plan will surely help in implementing by phases or stage your new initiatives, learn lessons, and then ramp-up capability.

   • Remember discipline. Whatever phase or stage your business is already at in your multi-process, multi-year plan, be prescriptive and disciplined to execute. Whether it is a program management, transition, or performance management, even governance activities that you are implementing, be patient and conscientious. There is no better endings for those who didn’t wait. Your investments may initially seem overly burdensome but it’s all worth the hard work and discipline because like all good endings, you too, will gain a lot from improved operational results, better customer relationships, and reduced operating.

   And there are still more lessons to derive out of how most successful companies have achieved significant reduction in operational costs while achieving agile scalability and improved control through strategy alignment. But we’ve only focused on the above three tips only because they are all what makes sense for us now.

    

   Source:

   Global Business Services: the secret sauce for successful strategic initiatives in 2013.

   The Three Tenets of Global Business Services Execution: Customer Alignment, Accountability, and Economies of Scale.

5. Relationship and Talent Acquisition: Keys to Future Sustainability of Outsourcing?

   April 25, 2013 10:01 am Leave a Comment

   

   With the much-praised bullish growth prospects cast over the Philippine Business Process Outsourcing (BPO) industry, it is hard not to get excited. It’s as if there’s nothing more that the Philippines must do to prove that it’s the best destination to outsource any kind of services.

   The business of outsourcing is still young in a country like ours. What we have achieved thus far speak only of few services that we can offer, particularly the ones which are non-strategic business functions like contact center, technical support, IT and back-office functions.

   Yet if there have been growth in higher-value works in the value chain local companies are getting, our share out of the bigger picture remain dismally marginal. And most obviously for outsourcing companies around the county, it’s not yet the right time to celebrate because there’s so much work to do.

   In the past years that we’re into the business of outsourcing as provider of high-value virtual talent and value chain-based services, we are deeply looking into the key challenges that would limit further growth to our business. We have seen a lot of risks, threats and many impediments to deliver a really satisfying outsourcing experience to a partner.

   Let us focus on two key challenges as well as how we could bring out the most out the resources at our disposal.

   Partner relationship. An outsourcing partnership does not stop the moment the buyer and provider signed the contract for engagement. It’s the starting point of busy times ahead any outsourcing partnership to ensure they maintain their cooperation, collaboration, and co-developments to achieve their goals. Competitive advantage that is sustainable is achieved when the partnership are mindful of their short- and long-term relationship. When trust and commitment is established, both parties will benefit from improved performance. Hence, as Alessio Ishizaka and Rebecca Blakiston posit in their article, Look After Your Outsourcing Relationship to Make It Successful, the partnership between an outsourcing buyer and the provider of outsourcing service to be successful lies in just how much they give serious and continuous attention to their relationship. One proven solution is maintaining and establishing personal contacts and open communications between both companies.

   Efficient talent acquisition

   Engaging the best talents boost your organization’s competitive advantage. Yet finding, attracting and finally hiring high-value talent will also need to be sustainable in the long-term. As volumes of jobs continue to increase, the demand for high-level, skilled and expert talents will surely surge. While there may be many candidates, but the key remains to be in quality not quantity. Talent acquisition processes must be efficient to bring out the better from the merely better. It will also be uniformly necessary that the engagement of new hires contribute to the overall value of the company. According to Ochre House director Paul Dalley, proactive sourcing must be ensured. The future demand for talent acquisition speaks of shifting the gears from being reactive to creating a proactive talent sourcing. This means in part partnering with specialist consultancies to deliver this capability.

   Conclusion

   While many literatures abound offering answers to questions around how to stay relevant, competitive and sustainable, for the time being, we can simplify our problems by focusing only to relationship and talent acquisition. There is no denying that the strength of the service buyer and provider’s relationship will propel their business from short to long-term growths. Talent acquisition is also a challenging new field that would create public conversations in the future.

   At Big Outsource, it is our motto to always go beyond delivering the most appropriate in order to satisfy our client partners. If outsourcing companies will commit, they will invest in making sure that partnership with clients last and that the processes in acquiring talents do not merely end at supplying the demand, it is the role of the provider to enterprises to engage them as well in sharing their goals that would encourage the development and deployment of strategic skills among their staff.

    

   Source:

   Look After Your Outsourcing Relationship To Make It Successful
   http://www.outsourcemagazine.co.uk/look-after-your-outsourcing-relationship-to-make-it-successful/

   Recruitment challenges in Asia Pacific: the sustainability of talent acquisition?

   http://outsourcemagazine.co.uk/recruitment-challenges-in-asia-pacific-the-sustainability-of-talent-acquisition/

6. More Investment in Talent is Key to Achieve High Performance in Outsourcing

   April 23, 2013 2:57 pm Leave a Comment

   

   Both the business process outsourcing firms and the buyers can get the full potential of the business strategy if they will increase investment on developing their talent pool. This was the result of a survey made by HfS research study about the emergence of a phenomenon called “talent paradox.”

   The report is 32 pages long, conducted among executives of 282 organizations, and I will try to squeeze in only the gist and the recommendations from HfS geared to provide the lessons learned that will be beneficial to the outsourcing industry in general.

   According to HfS, there is a marked failure from both the outsourcing providers and buyers in realizing the importance of investing in the key drive of value creation – people – which has created a “talent paradox.”

   What’s alarming is the neglect that’s supposed to be a priority “as outsourcing moves from the back office to the middle and front office, where value creation is paramount, and as buyers seek more sustainable business outcomes beyond merely cost reduction,” said HfS in the report sponsored by Accenture entitled “Is Good Enough Really Good Enough? The Great Talent Paradox in Outsourcing.”

   HfS cited many benefits that both outsourcing provider firms and client organizations can derive out of a well-invested talent resources of both the service provider and the buyer, such as improved productivity, efficiency and access to critical data.

   So what needs to be done to remedy the talent paradox? Here are the key recommendations given by the report –

   Invest on programs that will enhance talent’s core business skills. Focus your investment on experts whose skills go beyond merely leaned in operations management, procurement, and service-level skills. Doing so will produce a good number of operations manager in-house and will allow the companies to invest on skills that improve their core business.

   Access high-value strategic talent of service providers. For organizations who are keen in making the most out of the talent from service providers, it is high time the focus of your investment shift from operational capabilities to developing methodologies, analytics, and talent. And we are not only talking here of just anyone from the talent pool. These talent are the ones who are instrumental in creating value beyond lowering the costs. The learned buyers need to consider these capabilities parameter as gauge when evaluating a potential provider.

   Redesign skills expectations for the existing team.  The job competency models used in looking for individuals managing service providers in the past must be revamped to focus on strategic skills available or possessed by candidates.

   Establish shared ‘stretch’ goals. As well as the purpose to encourage skills development and usage, this solution will prevent outsourcing relationships from getting flat cold. Both enterprises and outsourcing providers must establish shared stretch goals together in reviewing goals, metrics, and objectives on a regular basis. If needed, solutions that need to be repositioned must be put in place to meet business goals.

   Source:

   “Talent Paradox of Outsourcing” Research Finds Lack of Investments in Talent Limiting High Performance in Outsourcing

   http://www.hfsresearch.com/Is-Good-Enough-Really-Good-Enough

7. Philippine Call Center Sector Reaches 20% Revenue Growth

   March 27, 2013 9:25 am Leave a Comment

   

   The year 2012 proved to be an upbeat year for the call center industry after the Contact Center Association of the Philippines (CCAP) reported that the sector grew about 20 percent against the growth target of 15 percent.

   Despite the appreciation of the peso, the strong performance was considered a big news to an industry that is highly dependent to currency fluctuations. According to CCAP executive director Jojo Uligan, should the peso currency and dollar exchange will fall below P40, the call center industry will be hurt the most.

   “We exceed our target last year. We’ve projected conservatively a 15-percent growth last year, [but] we did end 2012 [with] about 20 percent,” revealed Uligan, adding that CCAP will maintain its conservative forecast of 15-percent growth for the next three to four years.

   Last year, it was $8.4 billion in revenues and 500,000 jobs that the industry were aiming last year. Uligan expressed his satisfaction to the accomplishment thus far, including the opportunities that are coming from areas that the Philippines don’t presently have a strong presence like in Europe, United Kingdom and some Asian countries. The growth drivers last year include healthcare, gaming, banking and the financial sectors.

   For the overall business process outsourcing (BPO) sector, Uligan announced that the industry exceeded its growth target of $13 billion and jobs of 722,000 last year. Based on 2011 figures, the BPO industry posted more than $11 billion in revenues and employed almost 640,000 workforce.

   Under the medium-term roadmap for the BPO sector, it is projected that the industry will register up to $25 billion in revenues and employ 1.3 million by 2016. Out of this target, the call center industry is expecting to post $14.7 billion and 816,000 of the total jobs to be created by 2016.

   In recent years, many American and Australian companies are outsourcing their call center operations in Asia, particularly in India, China and the Philippines. Recently, Manila was named the call center capital in the world with the continued rise of this industry due to various factors that include low cost of embarking on call center outsourcing, English-speaking agents and the flexibility to adapt to Western country’s timezones.

   Source: (http://www.interaksyon.com/business/56941/call-center-industry-surpasses-2012-revenue-goal-despite-strong-peso)

    

8. PH Can Be Next Animation and Game Services Outsourcing Hub, Says Industry Groups

   March 26, 2013 9:08 am Leave a Comment

   

   Hopes are high that the Philippines can become the next prime destination for animation and gaming-related development services given the vast talent resources and competitive potential of the Filipino animators and game developers to excel.

   This was according to the industry groups, Animation Council of the Philippines Inc. (ACPI) and Game Developers Association of the Philippines (GDAP) who both have expressed faith about the large potential of the country’s animation and game services sector to bring sustained growth to the information technology and business process outsourcing sector.

   Philippine BPOs often cater to companies abroad who wants to outsource their non-core business functions so that they can focus on their non-voice and creative services. But that trend has changed already as the more experienced companies realize the vast potential and promise of outsourcing even their core services to countries like the Philippines.

   ACPI President Grace Dimaraanan said that the Philippines just need to step up in the area of providing proper training to this industry’s future leaders to lead the next generation of talentforces that can carry the country as the next animation and game development hub of the world.

   In less than a decade, the Philippines is regarded the new call center capital of the world, followed by India and China. Becoming an animation and game services development destination in the near future is not impossible, projected the experts.

   Key to marketing the Filipino talent domestically and internationally, according to Alvin Juban, the president of GDAP, rests in establishing partnership links between animation and game developers. Juban added, “We hope to have our game developers and animators penetrate the global market and take a bigger slice.”

   Juban noted further that animation and game developers will gain skills and training they need to be competitive when immersed in a successful and technologically-adept country like Korea, which holds 15 percent of the $1.5-billion global animation and games development market.

   India seizes the 40% of the total market share while the Philippines ranks at third place with 10%. Even more, an international research firm MarketsandMarkets report predicts that the global animation and gaming market will continue to grow from $122.2 billion in 2010 to $242.93 billion by 2016.

   The gaming and animation sector of both the Philippines and Korea are similar in some ways. Both employ the Western-style animation, having had decades of experience in Western production projects and also some pains. The Korean experience which grew at a staggering high level through the creation of original content, could teach the Philippines about carving out a niche in the global animation suppliers market.

   ACPI and GDAP are said to be working closely with the Information Technology and Business Process Assocation of the Philippines (IBPAP) to drive their respective sectors in penetrating and expanding to the global markets. One of the cited keys is the pursuit of public-private partnership initiatives in several locations to drive the growth of the country’s animation and gaming sector.

   To train Filipino animators and game developers, the IBPAP and the Technical Education and Skills Development Authority (TESDA) have forged an agreement with the Korean government. Such training programs got the Korean International Cooperation Agency (KOICA) and the Korean Chamber of Commerce and Industry (KCCI) tunder the International Cooperation Program of the Government of Korea o sponsor the initiative.

   Source: (http://www.malaya.com.ph/index.php/business/business-news/26316-prospects-bright-for-gaming-animation-ventures)

9. Philippines’ less dependence on foreign funds praised by Moody’s

   March 21, 2013 10:12 am Leave a Comment

   

   The Philippine government’s less reliance on foreign funds to support its operations reflects liquidity in its domestic economy and reduces exposure to foreign exchange risks, according to the latest report from Moody’s Investors Service.

   Among other emerging markets in Asia, the Philippines was praised by Moody’s for their “low dependence on foreign-currenty-denominated external financing.” In its “Emerging Asia 2013 Government Financing Needs: Funding to Remain Mainly Local Currency” report, Moody’s says this “imparts stability to government finances.”

   Factors that led to the declining reliance on foreign funds include the falling budget deficit of the country in the midst of growing economy. Moody’s explains the Philippine government now has the luxury to borrow more from domestic sources as a result of the enormous liquidity parked in the local banking industry.

   The Philippines has very strictly limited the share of foreign borrowings to very low level relative to domestic borrowings since the nation encountered fiscal problem in 2004. Domestic borrowings last year reached 80 percent of the government’s total financing requirements, compared to foreign borrowings that only accounts to about 20 percent.

   Moody’s predicts the total financing requirements of countries in the region will drop as a percentage of gross domestic product in 2013. This projection is based on expectations that the hike in their borrowing requirements will be slower when viewed against the growth in these nations’ respective economies.

   The country’s borrowing requirement is seen declining to 6.6 percent of GDP this year, compared to 7.6 percent last year. The Philippines’ current Moody’s rating is Ba1, just a notch below investment grade.

   Moody’s, among other capital market players, project an investment grade upgrade for the Philippines within the year.  The foreign credit agency is optimistic the country’s image among investors will improve if it will carry out on improving its debt metrics and regulatory reforms.

   “Additionally, sound government policies—most notably in Philippines, Indonesia, and Thailand—have helped bolster investor confidence as well,” Moody’s said.

    

   Source: (http://business.inquirer.net/110137/ph-other-countries-hailed-for-less-dependence-on-foreign-funds)