Tag Archive: Philippine Outsourcing

  1. 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.


  2. 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.

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

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    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.


    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.



    Look After Your Outsourcing Relationship To Make It Successful

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

  4. Philippine Outsourcing Sector Piles 18% Revenue Growth in 2012

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    An interesting data released recently showed once again the relentless growth of the Business Process Outsourcing (BPO) industry of the Philippines. Here’s the takeaways from the report:

    • The industry posted 18% revenue growth to $13 billion in 2012 from $11 billion in 2011.
    • There is a workforce growth of 21.8% to 780,000 in 2012 from 640,000 in 2011.
    • The fastest growing sector is Healthcare BPO, which generated $430 million by end-2012
    • There were 200,000 nurses employed to work in medical transcription, data management, medical coding and billing, and pharmaceutical benefit management
    • The voice sector employs two-thirds of the entire BPO industry
    • The voice sector is seen generating $14.7 billion in revenues

    Coming from the Information Technology and Business Process Association of the Philippines (IBPAP), this must be big news.

    The growth target of the government is $25 billion in revenues and 1.3 million workforce by 2016 and the latest figure shows the sector is well on its way to beating the target. Workforce is projected to rise to 926,000 this year where 816,000 jobs will come from the voice sector.

    Another key sector that’s eyeing revenue growth this year is the information technology and business process management (IT-BPM) sector. Its 2013 revenue target is $16 billion.

    The IBPAP conducted a survey among 154 IT-BPM executives cited as the bigger risk factors to the industry are the tight labor market, peso appreciation, and competition.

    The strong BPO industry growth last year is an indication of the positive outlook and stronger-than-ever investor confidence to the Philippines. Large enterprises and SMEs from North America, Europe and Australia proven time and again the benefits of outsourcing beyond cost-reduction.

    The ability to focus on core competencies and the higher-value functions, beside access to talent and innovation are often cited reasons companies outsource or send their back-office operational jobs to countries like the Philippines, China and India to achieve efficiency.



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

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    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.


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

  6. Philippine Call Center Sector Reaches 20% Revenue Growth

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    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: (


  7. Fortune 100 firm eyes Philippines for expansion plans

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    Safeway, one of the largest food and drug retailers based on sales in the United States is eyeing the Philippines as a strategic destination to expand its global operations, according to the Department of Trade and Industry.

    The opportunities in the business outsourcing industry sector that can add significant value to the global operation of Safeway was also cited as reason of the expansion plans.

    Safeway’s top-rank executives are said to be bullish about their investments in the country, following a due diligence conducted in February in connection to their plans of expanding its business and operatiosn in the Philippines.

    Safeway is a Fortune 100 company that operates 1,641 stores in North America and Canada. Part of its strategy is to provide a unique shopping experience with a wide selection of high quality products at low prices.

    The DTI statement added: “In support of its stores, Safeway maintains an extensive network of distribution, manufacturing, and food processing facilities. It also has business interests in the online internet grocer, prepaid gift cards, and financial services.”

    The company entered the country since 2003 through an affiliate, the Safeway Philtech, which serves as its captive technology center. Its affiliate provides services such as application support and maintenance, application development and enhancements, technology and infrastructure support.

    According to the Trade Department, Safeway Philtech has partnered with the Board of Investments and leaders of the BPO sector in organizing the visit of the top company executives to the Philippines.


  8. Philippine cities climb in offshore IT destination ranking

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    After being touted as the ‘next call center capital of the world’ by some high profile media establishments like Al Jazeera and The New York Times ,  there’s a new name that the Philippine’s being called lately – an alternative offshore IT hub.

    No wonder, the recent survey of IT and outsourcing consultancy Tholons rank Manila the third leading ITO destination in the world, replacing New Delhi and in effect break India’s monopoly of the three top spots. Bangalore and Mumbai are ranked first and second most favorite IT outsourcing destinations by companies.

    No wonder, the recent survey of IT and outsourcing consultancy Tholons rank Manila the third leading ITO destination in the world, replacing New Delhi. Breaking into the top three, behind Bangalore and Mumbai, in turn displaces India’s monopoly of the three spots.

    But Tholons believes that it is the people that remains to be a country’s best value proposition as an outsourcing hub.

    Tholons rank the 100 ITO hubs each year and Philippines’ ranking impresses the fast rate that the country’s making its ground well up high in the minds of foreign investors. Another city in the Philippines, Cebu was eight place, up one place from the previous year’s ranking. Five other ITO hubs in the country made it into the top 100.

    Two main factors brought the Philippines in the limelight – it’s ITO costs ranks among the lowest anywhere around the world while the third country with massive pool of IT works in the Asia Pacific, according to data issued by the Industry Development of the Information Technology and Communications Technology Office of the Department of Science and Technology.

    Based on the government’s IT-Business Process Outsourcing (BPO) roadmap 2011-2016 issued in November 2011, the combined sector is seen pouring in $25-billion to government in 2016. As a result, there will be a steady supply of jobs for up to 1.3-million Filipinos. Current earnings of the ITO sector may double to $2-billion by 2016, according to the same report.

    To achieve the growth projections and help provide investors with continued offshore IT support, the biggest challenge to the Philippine government remains to that of improving infrastructure and shifting more focus on to education.

    When spending to infrastructure is to be increased, analysts are prodding the government to look into power supplies and communication links. As regards the incentives to outsourcing providers, the government might consider giving lower income tax rates.

    According to Oxford Business Group, a business consulting firm, the key cities of Manila and Cebu can keep the pressure on the country’s rivals in the ITO sector in the medium term. Oxford added that ITO is fast-becoming a major contributor to the economy, next to business processing and other outsourcing segments.

  9. Manila Beats Delhi in New IT Outsourcing Ranking

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    Manila is now the third favorite outsourcing destination to send IT works, replacing New Delhi. Cebu, another Philippine city, went up one rank in the top ten.

    The Philippines has exceeded the 5.6 year-on-year growth targets to post 6.6 percent improvement in the economy. Meanwhile in the fourth quarter of last year, the country has recorded a 6.8 percent growth rate, fuelled by the strong services sector.

    Just what we thought, the miraculous feat of the Philippines proved our assumption that it is only a matter of time until today when the country finally edges India from its top rank as the IT destination darling the world over.

    In the annual survey conducted by global outsourcing advisory firm Tholons, the research thinktank accounted the new momentum of the Philippines to the following factors: 1) cultural and accent similarities with the Americans; 2) standard of living is low, which as a result makes doing business here more competitive than our foreign counterparts; and, 3) the generally-positive perception of the business process outsourcing careers.

    Tholons has also identified the strong support that the Philippine government is giving to foreign investors, particularly in making the country more attractive to outsourcing firms by way of grants and infrastructure developments.

    Manila was ranked the third best while Cebu City went up one rank in the top ten. While Bangalore holds the No. 1 rank and six of India’s outsourcing-oriented cities entered the top ten ranking, it was the Philippines who is showing significant progress through the years. Ankita Vashistha, Tholons managing director, underscored the rising costs of doing business in India: “Infrastructure and quality of life are also under pressure in Indian cities and these could impact growth in the future.”

    Times of India added in its report that US-based customer management solutions firm Convergys has already 18 call centers set up in the country. Another US-based company, UnitedHealth has back-office operations in Taguig City. In Cebu City, EXL is opening its third center while IBM has expressed plans to grow its BPO services in the country, which will be geared toward providing higher value analytics and high-value customer support services. Wells Fargo & Co has its business support center established in Taguig City while JP Morgan Chase has expanded in the country’s capital Manila through its 1,000-employee facility.

    The Tholons report also indicates the outsourcing growth in the major cities of countries like Malaysia, as well as Latin America.