Tag Archive: Business Outsourcing

  1. Hiring a Payroll Virtual Assistant

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    Are you a startup that outsource your payroll service? Are you planning of hiring a virtual payroll assistant? Using a payroll service company can ease you of compliance woes with global standards around financial, accounting and payroll matters.

    Ernst & Young auditor Stephen Dunn wrote in Forbes Magazine explains the categories of payroll service companies and what they do. All three payroll service categories perform the computation of employees’ withholdings and net pay, compilation of payroll accounting records for employer, and preparation of payroll tax returns for the employer.

    The first category is called the Payroll Service Providers (“PSPs”) and they prepare payroll tax returns using the employer identification number (“EIN”) of the employer. After proper documentation is made, employer then signs and files the tax returns.

    Reporting agents (“RAs”) comprise the second category and they prepare payroll tax returns and use the employer’s EIN. It is an RA who signs in behalf of the employer the payroll tax returns before filing them.

    The third category are the Section 3504 agents or simply professional employer organizations (“PEOs”). A PEO, who appear to take over as employer for designated employees, prepares a payroll tax returns using its EIN, and signs and files the returns.

    To more about the three categories of payroll service companies, you can go straight to an IRS table to check.

    Tips to Smart Payroll Service

    The next step for an employer to do is transfer to a PEO funds to cover their net pay and payroll tax withholdings. Other payroll withholdings, such as 401(k) plan contributions or health or dental insurance coverages must also be transferred to an PEO.

    The PEO holds the responsibility to pay the net pay to the employee, the payroll taxes to the taxing authorities, and the other withholdings to the persons entitled to them. An RA also receives employer funds while a PSP may receive employer payroll funds.

    According to Dunn, the risk is that an outside payroll service firm will receive employer payroll funds but fail to remit them to employees, taxing authorities, or others entitled to them.

    Even if an employer contracts the job with a payroll service outsourcing provider or contractor, they remain liable for filing its payroll tax returns and depositing its payroll taxes with the IRS. A contract signed between a payroll service provider and an employer is a create of state law. Under the U.S. Constitution, Federal law, including Federal tax law, is the supreme law of the land.

    It is the role of the IRS to prosecute payroll service company principals for failing to pay over to the IRS payroll tax funds that they have received from customers. For the employers, however, this is little consolation because they still must pay their payroll taxes a second time, or to all of us who work our entire careers paying into the Social Security trust fund only to have it compromised by such schemes.

    Dunn advises that the IRS wants employers to keep its address as the address of record with the IRS, and not change its adders of record to that of the payroll service company. This way, when issues with an account arise, the IRS can send correspondent to the employer at the address of record and not facilitate an embezzlement of the employer’s employment tax funds.

    Employers are urged to use Electronic Federal Tax Payment System (“EFTPS”), which enables them to confirm that Federal tax deposits are being made on their behalf. While Treasury regulations require employers incurring payroll over $200,000 in Federal payroll taxes in a calendar year to use EFTPS, all employers should still use this electronic system.

    EFTPS provides employers online access to their tax payment history for 16 months. The machine also enables an employer to make tax deposits which its payroll service company does not make on its behalf, such as estimated income tax payments.

    Where to outsource payroll service?

    Dunn explained the advantages of going to large payroll service companies. When a payroll service is big, the expectation is that they’re likely to have existed for quite a very long time and they have the capacity to cover a claim caused by their malfeasance. Their experience using effective systems to serve employers may be mature already.

    A smaller, local or offshore payroll service company can be approached to assist an employer with their payroll needs but Dunn has set out some guidelines before signing a contract. An employer must verify the company has commitment to fight employee dishonesty. When inquiring about the company in question, employer must check or conduct background check with attorneys, accountants, bankers, and other employers.


  2. Outsourcing IT Services: Five Steps for Business Success

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    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.


  3. Australian Firms Told Not to Hold Back Outsourcing Plans to Seize Benefits

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    Among large or small businesses, outsourcing carries a negative or scary connotation of foreign-based support, local jobs being migrated to a developing country, and an overall assault to the American economy.

    While it’s true outsourcing allows for companies to get better outcome at a cheaper rate than their local counterparts, the practice of business process outsourcing is generally not a bad idea. That simply is not the case with all outsourcing, especially not the kind Big Outsource provides to Australia’s large and small organisations.

    “Explaining what outsourcing is and what Big Outsource do is challenging because you have to prove that outsourcing is not at all that scary,” Ramon Lorico, CEO and Partner at Big Outsource, states. “We quickly remind them that outsourcing some part of their business does not necessarily require for them to replace their current employees with our staff. While we set up our office in Manila, we have set up an office in Australia.”

    Proper outsourcing of IT support lies not in removing existing employees of our client partners, Mr. Lorico explains, as a business process outsourcing vendor we encourage that those employees are supplemented with additional ones.

    “One of the main advantages in the way Big Outsource conducts its business is that while we are located in the Philippines, there are only two or three hours difference in our respective timezones,” states Mr. Lorico.

    He further adds, “And even though we technically exist as outsourced IT or back office support, language barrier is also not much of a big trouble because Filipino workforce are proficient not only in speaking but also writing using the English language because we’ll be conducting almost all our relations over phone, messaging and email communication systems. With our Australian office, there is also no way that we could not meet with our clients face-to-face.”

    For an even more successful IT outsourcing support, Big Outsource has introduced many outsourcing flexibility, especially to make outsourcing an attractive strategy for small and medium-sized enterprises. “Again to correct the misconceptions that outsourcing will migrate all the local jobs to an outsourcing provider, we are not such company. Although our pool of IT support can fully support your IT requirements, Big Outsource has solutions to assist your existing team depending on what your business can afford to obtain. For example, we can help you get one virtual assistant versus a dedicated team.”

    In other words, Big Outsource brings outsourcing to the next level, giving you smart solutions and options to sustain and meet your business requirements. As opposed to common misconceptions about outsourcing, Big Outsource believes it is about ensuring productivity through our flexibility that will ensure long-term success to your endeavors.

  4. Business Process Outsourcing Solutions to Watch by Year 2016

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    Australian companies wishing to control operational costs often resort to an offshore service providers who perform their administrative or non-strategic support functions. The modern business is evolving and business process outsourcing or BPO is quite the latest business practice darling known for giving businesses the strategic support they need to be competitive.

    Trends to watch in BPO

    According to Gartner, a world-leading information technology research and advisory thinktank, up to $9.5-Billion will be spent on business process outsourcing by the year 2016 in the Pacific and Asian regions. Australia was cited as the largest market for BPO in 2011, piling in $4.6-Billion, which technically made this commonwealth nation’s market share even bigger than that of India and China.

    Plunkett, another global market watchdog, issued in a report called Outsourcing and Offshoring Industry Trends and Statistics 2013, that the global outsourcing markets will exceed $480-Billion in the year 2013.

    Cost remains the biggest cited factor for outsourcing but there are also commanding boom in market industries like Information Technology, Banking and Finance, Retail, Travel, and Communications in Australia due to quality factors.

    Factors that Influence the Use of Offshoring BPO

    As a way to approach business, the use of BPO by small and big companies are driven by several key factors. They are:

    • BPO services are often scalable and offer flexible options to businesses
    • Diverse, reputable companies offering wide-scale BPO offerings and service levels
    • Assured quality goods and services due to improved processes and infrastructure
    • Improved productivity over reduced liability and less-pressure of business management
    • Competition and increasing call to expand globally which demands for more workers
    • Talent shortage

    Business Process Outsourcing Service Types to Consider

    What you need right now or in the next couple of years will be dependent on several factors. However, we would like to cite some of the ideal business process outsourcing solutions that you can seek from Australian BPO support providers like Big Outsource. Here are the following that will be highly in demand:

    Bookkeeping and FinancialCertain financial matters can be outsourced to an offshore provider from the preparation of the business payroll to simple to complex tax audits. Outsourcing to a BPO provider this aspect of business can help generate more revenues for your business and give you more edge in dealing with your financial matters.

    Virtual Management – Especially for startups, certain non-strategic business functions can be delegated or sent offshore as you grow your business, especially to meet customer and business demands. Hiring an executive management team member under a business process outsourcing provider contract can remove the pressure off business owners and allow them to focus on the important side of their business.

    Customer Service – As companies see the bigger picture of operating and maintaining their own in-house customer service department – time consuming and costly – outsourcing customer service continue to appeal as a viable option. In fact, it is one of the most popular BPO support side that companies are sending to offshore service providers.

    IT Support – As the search for the best IT professionals who are equipped with up-to-date skillsets and right qualifications become more and more challenging, some companies find success by hiring a virtual worker through a business process outsourcing provider. Programmers, mobile app developers, digital platform development professionals will be highly valuable and in demand and they will push for the growth of offshore BPO in the near future.

    The foreseeable future may be few years from now but the evidence are clear: companies globally searching for quality workforce from business process outsourcing providers will continue to rise. What’s best to do now is to have a regular progressive evaluation of business needs and requirements.

  5. Making Lean Culture Work in Talent Acquisition of Outsourcing Ventures

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    Lean culture is a management principle that’s often applied in the manufacturing sector. Its standout followers include Walmart, Southwest Airlines and GE Healthcare. But can Lean principle ever be applied in the business process of outsourcing, particularly for talent acquisition?

    This is an argument once popped by Zachary Misko and has even written an article at Outsource Magazine entitled “Embracing a Lean Culture in Recruitment.” The basic assumption may be around whether or not applying lean culture in HR recruitment processes will finally help find gems of talents and retain those who contribute to lifting the value of the outsourcing provider and buyer. Of course some theories are better only at staying as theories. Sometimes realities are harsher than initially thought.

    Bringing up the idea of Lean culture in resolving the shortage of high-value talent force could possibly help. Other than what’s already tested and tried by outsourcing companies in standardizing and streamlining their talent recruitment procedures, Lean principles could offer to yield more valuable talents.

    For the uninitiated, Lean manufacturing is one of the quality system principles that many multinational companies use to help identify value-creating activities, eliminate waste, and focus on continuous improvement.  So the next question is how adopting Lean principles will lift recruitment and other back-office functions to better heights of efficiency and quality. But one certain outcome is the insight that this disciplined initiative will provide business partners.

    Another valid question is, “Is Lean culture just fad?” Definitely not when this principle is taken as a lifestyle. With the practice, organizations are enabled to reduce development cycles so that higher quality services and products at a lower cost are produced. And let’s not forget, resources are efficiently utilized using the Lean principle.

    The next question is how to getting started in talent recruitment using Lean. Talent acquisition is a strategic service that can give real competitive advantage to any organization. How? The overall time to approve and fill staff positions will be reduced dramatically without the system adopted. This principle can also help HR to identify non-core, ancillary activities that occupied their time, which in the long run helps in simplifying and expediting the entire process.

    Misko cited the GE Healthcare experience in driving his point. The company sought the support of its external recruitment service provider to implement Lean culture. The result is an overhauled internal processes within GE Healthcare and its external recruitment service providers. With the success of the adoption, the global outsourcing service provider is bringing its Lean expertise to other organizations.

    It is also underscored that practitioners be able to train themselves to remain vigilant in identifying and solving breakdowns in their processes. Complacency is guarded throughout the course of the application of the principle.

    There must also be commitment within the organization to adopt Lean culture. This means executive champions, buy-in from the rank and file must be ensured along with the patience and resources to make this culture work. Finally, when executed well, the effort can significantly improve how you acquire talent.



    Embracing a Lean Culture in Recruitment

  6. How to Grow your Business with an Independent Contractor

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    The economic uncertainties coupled with rising competition in the marketplace create tremendous challenge for businesses – large and small – to cope. Some companies opt to delay hiring new staff while they wait for the “right time” for the market to stabilize. Remember that you have some existing projects and your clients are waiting for you to deliver. Plus, you obviously need to maintain certain service quality within your limited resources. Some opportunities might have already slipped past your hands if you will not act.

    Hiring or building a relationship with an independent contractor can save your days, months or years (figuratively and literally). Like your own in-house personnel, a virtual worker or independent contractor are your staff who perform duties and responsibilities albeit their own resources and could be working as part of the business process outsourcing (BPO) sector.

    Independent Contractors and Business Growth

    Why hiring an independent contractor or virtual worker good for your business? While they may work remotely for your business, generally the loyalty and hard work of your offshore staff are dedicated to you. In our experience though, some of our clients have placed some of their virtual workers with Big Outsource to an actual employee status at some point in their productive careers. Generally speaking, the BPO model offers a win-win solution both to businesses and service providers.

    The ideal uses of independent contractors and virtual workers are in the management of project fluctuations, addressing limited labour budgets, and scarce work facilities. Especially for startups, hiring a virtual worker or establishing a relationship with an independent contractor can meet the businesses’ needs for temporary contractors who can work on a limited time.

    You can grow your business operations together with an independent contractor or your virtual staff through their parent business process outsourcing company. Here are some tips for you:

    List the details in writing. While you may have tried with luck to enter into an agreement through purely verbal means, however, this time around, you have to be more careful. Together with the service provider, sit down and take the time to draft a comprehensive agreement for the service. List both you and the independent contractors’ details, including the extent of the service or work that will be performed, terms and schedules of the payments, and other terms. Make sure both of you signed the agreement and each have a respective hard and soft copy on file. When necessary, you and the service provider can agree to amend the contract.

    Identify project goals. Again, this is important that both you and your independent contractor site down to come up with a project list. Include realistic and measurable goals, milestone dates, etc. This document will serve as a fall back when all else fails, and you need to retrace or have an alternative set of options to manage the steps of your business process outsourcing strategy with your independent contractor.

    Provide access to resources. Paying your independent contractor doesn’t equate to success. There are certain project logistics that you must ensure to allow your independent contractor to work seamless with you or together for collaboration with your in-house personnel. Have you granted access to your central system to your independent contractor? Does your independent contractor already have access to your project collaboration tools to track projects and get relevant information?

    Open Communication Lines. It may be a cliché, but communication can really make or break your business. Always open your communication lines with your service providers using teleconferencing facilities. You will find this useful for quick setups for meetings to get updates and progress reports with current and future projects. You might also want to hold a regular daily or weekly meetings as well.

    The success of your business process outsourcing strategy will largely depend upon so many factors, but with the tips stated above, we are confident your business will be off to a great start.

  7. Growing your Outsourcing Business Using Brand Repositioning Tactics (Part 1)

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    Significant changes are shaping the outsourcing industry in recent years. The outsourcing boom has brought in new entrants and of course competition. Hence, Business Process Outsourcing and IT services companies must re-evaluate their branding to succeed and achieve greater profitability.


    Yes, there is growth. If there’s one industry where the sun is shining brightest, the ray of the sun is cast widest around the Business Process Outsourcing (BPO) sector. The BPO  and IT services industry appear all the most shielded as well from the economic slump. While other industries and markets wither as a direct result of the economic turmoil, the outsourcing industry continue to remain the single most vigorous in weathering the dampening situation.


    Fortunately, more and more new entrants are attracted to join an industry now seen as a growth market. And outsourcing companies will benefit from having a full grasp of the whole nature of what is changing, which will be of help to assist themselves in finding their niche and strong points when repositioning for their targeted market.


    Outsourcing sector’s many challenges are brought about by many converging dynamics. Staying competitive (yes, this could potentially be a burden for all of you providers out there!) is inevitable in the sea of other bigger challenges ahead. Thus, these issues are naturally shouting new brand thinking according to BrandTaxi’s John K. Grace.


    • Price War. This is one in the many issues that’ll surely arise and remain constantly so. Better deal and live with it. Nowadays, there is a heightened eemphasis on low cost and oh the buyers (you will always hear them beg) for the absolute lowest priced services. Unfortunately, the new competitors in the market are making the hurdle tougher. So for outsourcing companies, what does this mean relative to branding? It’s a challenge for brands to communicate their unique value in fresh and compelling way.


    • Greater Value. Aside from the cost that buyers will go looking for from a provider, they will surely look after their prospective outsourcing partner to offer greater value. This means offering new services and solutions that will bring greater and better value out of the outsourced process that buyers get. What for providers this mean? Outsourcing companies will need to understand their competitive edge in order to position themselves with clarity to buyers their unique attributes and to ensure understanding and secure engagement.


    • Shifting labour costs. Again, competition has brought in the phenomenon of shifting labour costs. India is the former darling of the call centre business until the Philippines emerged out of the shell. So what could earlier been an attractive source of labour may change in the future. Somehow, technology is helping enable other areas or regions to be competitive as well. With plenty of outsourcing options to go to, buyers are expecting highly of their provider. This means for outsourcing companies, however, to reassure their partners or clients about their quality and high-value service.


    • Skepticism and need for transparency. Skepticism will rise and it’s beginning to creep in now in what providers promise and actually deliver. So the plea for openness and increased transparency is louder than ever. As providers feel the pinch of this issue, they are also must learn to cope with the new set up to develop and sustain their relationships with clients in new ways. What providers can do is to use their brand assets to show how the company is committed to openness and transparency, especially in this challenging new environment.


    For the second part of this series, we’ll talk about key strategies that you can use in bringing out your brand’s unique voice and personality to grow your outsourcing business.


  8. Is Outsourcing included in your corporate strategy?

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    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.



    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.

  9. Australian SMEs Should Try Outsourcing

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    Outsourcing has received a bad rap in the past years among Australian businesses, including SMEs, due to the fear of the unknown. The good news is that we have seen massive changes in perception in recent years from negative to positive.

    While most of Australia’s large banking and telecommunication firms have jumped ship to follow the trend and have seen the light, the smaller organizations appear to be delaying to follow suit.

    Some reports point to SMEs to be comprising 99% of the Australian business sector, stressing just how extensive the country’s economic stability rests on their continued growth. And some steps must be taken to sustain the SME’s growth.

    SMEs need to learn from their Australian business peers who have already tried outsourcing and have successfully leveraged this offshoring solution the right and effective way. Even from their peers in the UK, Australian SMEs can learn a thing or two about outsourcing or sending job tasks offshore.

    Size zero’ businesses is one of the fast-emerging business trend in the UK. Like a Diet Coke where calories and sugar contents are reduced, only it’s the non-core functions that ‘size zero’ SMEs are shedding. This is undertaken by embracing outsourcing, exchanging services and sharing expertise to focus on their strengths and reduce costs [1].

    It’s also high time for Australian SMEs to start looking outside the countryside, such as Asia and consider the burgeoning BPO sector in the Philippines.  The country can offer plenty of opportunities in terms of high-value talent, logistics, technology and low cost of doing business.

    Business optimism in the Philippines is high, and higher than ever in recent years. An international survey about business optimism ranked the Philippines as the second most optimistic nation in terms of how Filipino businessmen sees the country’s economy for the next 12 months. Peru was ranked the most optimistic country in the world.

    This was the result of a survey by Grant Thornton International Business Report (IBR) for the first quarter, adding up to the already many positive forecasts for the Philippines, including stronger growth for the next couple of years. The report also showed strong signs of willingness to invest by other countries in the country like the U.S. and Japan [2].

    The Philippines has increasingly been noticed as an emerging and preferred outsourcing destination by many international companies to partner with BPO organizations in the country. BPOs is one of the country’s sunshine sectors.

    It is smarter to work when you are able to concentrate on core business processes that are critical to your achievement of business targets and goals. Outsourcing allows SMEs to become leaner and smarter. It is only a matter of time until Australian SMEs will become more open to outsourcing because this strategy does not only help in reducing cost. Outsourcing done right gives access to talented workforce, gives decision makers to focus on what’s important, and even minimize risks in the long-term.



    [1] PH businessmen among world’s most optimistic, survey says

    [2] New breed of ‘size zero’ SMEs emerge