INDIAN IT OUTSOURCING COMPANIES MOVING TO THE PHILIPPINES

In the past year, 12 Indian Tier 1 companies in the IT Outsourcing sector moved to the Philippines.

Some of the firms identified are Wipro Technologies, HTMT, ICICI Firstsource, 24/7, Genpact, GE Money, Sutherland, Aditya Birla Minacs (Transworks) and Infosys. In addition, firms like HCL, EXL Services,WNS and Evalueserve have also plans to move to the country.

For more information, come over to this link.

OUTSOURCING NEWS: To outsource or keep it in the house & some recent developments

Car giants NISSAN and RENAULT SA intend to realize their goal of producing a budget car that will be sold at $3,000 by outsourcing its production to India. The launch of the new model is estimated to be with the year 2010.

Meanwhile, a school union is opposing the proposed outsourcing of transportation and food service by saying that it WOULD PROBABLY result in unreliable bus service, empty promises of savings and more than 140 district employees without jobs, according to a union leader.

In another article, the merits of outsourcing vs. keeping it on the house are tackled. For the meantime, the surge in outsourcing continues with SIEMENS IT being awarded a $42 M contract and NOVARTIS awarding the handling of IT infrastructure to British Telecom in a deal worth $500 million.

At this point, the surge of outsourcing seems not to have slowed.

LATEST IN OUTSOURCING: PREMIERE OUTSOURCING DESTINATION TO OUTSOURCE OFFSHORE

A bit unbelievable but true.

Faced with brain drain, Indian CIO's will now look at offshore outsourcing companies for their IT needs. The current situation is that the demand for IT skills far outweighs its supply.

"Local service providers lack adequate focus on the Indian domestic market, widening the demand-supply gap by not allocating enough quality resources for Indian customers," said Linda Cohen, vice president of Gartner's IT sourcing group."

In my opinion, the Indians are way to classy to become a victim of their own success. If the trend continues, I can see a lot of Indian businessmen setting IT businesses in the Philippines and its neighboring countries. Foreign IT developers will surely benefit from the new employment opportunity. However, Indian companies can be seen as the largest profit takers in this situation.

Are outsourcing fears misplaced?

More articles supporting this site’s several pronouncements are coming out. In the linked article, the CEO of Infosys talks about the need to cope with the times. Details Here

With the upcoming US presidential elections, people paranoid with offshore outsourcing are increasing their call for the candidates to go against the trend. This is despite proofs supporting the argument that outsourcing actually brings about an increased demand for higher value jobs (onshore), resulting to higher productivity and stronger American companies.

The IT industry shows that more than 147,000 new US jobs were created. The problem with the American manpower pool is that it cannot fulfill the quantity of demand. Please read the complete article here.

I’ve read a few years ago, that despite the growing need for IT graduates and the increasing salaries of IT professionals, the number of Americans enrolling in IT courses continues to go down.

This scenario is very similar to the transcription sector where the supply of onshore transcribers is a lot less than the actual demand. A relative in the US tells me that daily newspapers always include advertisements of companies “Looking for transcriptionists”.

“But there is so much global demand for employees proficient in programming languages, engineering, and other skills demanding higher level technology knowledge that outsourcing can't meet all U.S. needs. "There would have been a lot more than 147,000 jobs created here, but our companies are having difficulty finding Americans with the background," says William Archey, president and chief executive of the AeA.

One culprit is the dearth of U.S. engineering and computer science college graduates. Second, immigration caps have made it difficult for highly skilled foreign-born employees to obtain work visas. Congress has been debating whether to increase the numbers of foreign skilled workers allowed into the country under the H-1B visa program (see BusinessWeek.com, 3/27/07, "Immigration Reform: Americans First?").

PRICING ONE'S SELF OUT OF THE MARKET

Yesterday's article in PE.com illustrated what most of the BPO insiders know but are not talking about. Read the article here.

Technology has made it possible for some tasks to be done from distant locations. As a result, offshore companies who are into customer services, information technology, transcription, animation, architectural & engineering design, medical research, etc. has successfully penetrated the US and European markets.

As the demand for outsourced work continuous to grow, the existing service providers are observed to be increasing their prices. This is mostly due to sharp increases in their factors of production (loss of government incentives and rising cost of wages, office spaces, etc.).

Unfortunately for them, customers are not complacent. After a while, the same creative minds that made them resort to outsourcing will tell them to continue and look for new places to send their outsourcing requirements. For example, the garments industry which left the US years ago, has started departing from the Philippines towards China. In addition, the call center and transcription businesses which used to be synonymous with India are now known to be successfully being hosted by other Asian countries like the Philippines, China, Pakistan and Indonesia.

In the Philippines, BPO firms which used to be predominantly located within Metro Manila have started to expand to the provinces in order to lower their costs (land, labor, taxes, electricity, etc.). At this point, the call centers can still afford the cost of doing business in the country. However, the industry should take heed.

Be careful not price yourselves out of the market. When you keep on increasing the cost of servicing a client, the customer will be forced to move on to the next provider.

Apartheid in the BPO Industry? + Other BPO Updates

A US Congressman filed a bill requiring foreign call center workers to disclose their location. Read the complete news this page:

"The congressman, a Democrat, has filed legislation called the Call Center Consumer's Right to Know Act that would require call center employees to state their physical location when called by consumers. supporters believe location disclosure would inform consumers that many of their calls have been redirected to foreign countries and will focus attention on the degree to which U.S. call center jobs have moved overseas."

Hmmn.. Does the congressman want to encourage the practice discrimination based on location, race and color? Isn't this bill leading to a new variant of Apartheid and Racial Profiling? Let's see what the American Civil Liberties Union have to say regarding this.

Andolini, an economist, will probably have a different take on this. Let's wait for his comments.

Cops Outsource the maintenance of their crime database. Click here.

"Police officers are entering crime incident reports, arrest records and other important data into the CrimeCog integrated criminal justice system using personal computers and a common Internet browser. The information is encrypted as it is sent to a secure data center, where it can be accessed by other authorized users, including other police departments."

In Jerusalem, large tourists arrivals are forcing hotel owners to do what others may think as "Unthinkable". Hotels are currently outsourcing rooms to competitors. I hope Asian hotels will have a way of transporting the tourists to their hotels for the evening and return them to the streets of Jerusalem in the morning. Hmmn.. "Beam me up, Scottie!" Read the news here

How is BPO in the Philippines?

A newspaper article recently wrote about the BPO potentials of the country and the fact that it is not getting enough of the Japanese IT market.

The newspaper interviewed a number of Japanese execs who explained the following:

1. Despite the potential, most Japanese perceive the country as politically unstable and "Scary" in terms of peace and order;
2. Most of the Japanese firms engaged in BPO business in the Philippines are the big firms who's been in the country for a long time; and
3. Successful Japanese businessmen do not want to share their secrets.

A Japanese businessman even said something like "Initially, the Japanese are afraid to come to the Philippines. But when they do, they realize that this place is very good. However, when fellow Japanese ask them how they find the business climate in the country, they say; Ahh, It's very hard!"

Really Funny! ...... BAKERO!!!! -- joke!! :D

Philippines hosts the 7th e-services expo

Foreign companies thinking of outsourcing some of their business processes will be attending the e-Services Expo: 7th global conference on outsourcing and exhibition at the Shangri-La Plaza, along the Ortigas Business District, Philippines. Most of the conference exhibitors are companies specializing in Contact Centers, Transcription, Software Development, Animation, Back Office Operations, and various IT solutions.