US FIRMS PREFER THE PHILIPPINES FOR FINANCE AND OTHER BPO SERVICES

This is hardly surprising for some of us in the outsourcing industry. For quite sometime now, there are big American companies that has been using the Philippines as their base for their finance and other outsourcing requirements.

One big difference is that most of the finance and other BPO work were being done by their own employees. This is something that some US companies may try to keep confidential but some of them house their finance departments in the country. Furthermore, I was informed that some US accounting firms have also established working relationships with their Filipino counterparts and had the locals work on some of their processes.

Here are some selected quotes from a related article posted in a provincial news source:

Mr. Gary Reddick, Senior Vice President of AIG Worldwide Life Insurance, shared why his company selected, and is now running a business process operation in, the Philippines, stating “By locating in the Philippines, we are able to leverage AIG’s strong local presence in an environment that is highly conducive to US-focused outsourcing operations.”

AIG American General is the second largest life insurer in the United States. In 2002, it formed AIG-BPSI as a joint venture between AIG General and Philamlife, the largest and most diversified insurance company in the Philippines. AIG-BPSI was to provide outsourced backroom processing as well as contact center services to AIG and its various customers worldwide. AIG-BPSI launched full operations in January 2003. In April 2006, AIG American General completely bought out Philamlife interests in AIG-BPSI.

Mr. Reddick also noted that AIG selected the Philippines because of the country’s advantages over alternative Asian sites: Labor costs equivalent to China; lower and more stable than India; prevalence of spoken American English; cultural and social affinity with the US; modern and stable infrastructure such as water, power, roads, telecommunications; large pool of qualified college graduates seeking white-collar employment; access to specialized skills aligned with US professional standards; government support and tax breaks for the industry; and more familiar environment for expatriate trainers and managers than other Asian alternatives. He added that having a local partner like Philamlife helped a great deal.

More Newspaper Jobs being Outsourced, Commentaries and Other News.

An Indian paper claims; “American inefficiency is India’s outsourcing gain”. I beg to disagree. Outsourcing leads to higher productivity for the companies that sent the jobs elsewhere. The end result will undoubtedly be a stronger and bigger enterprise. Please read my related discourse through this link.

The beneficiaries of outsourcing, instead of angering their clients, should be thankful for the inflow of new employment and business opportunities. Instead of namecalling, why not focus on doing the job well? Geesh, is that the way to treat clients? Call them inefficient? I wonder why the paper stopped itself from calling them stupid.

A day after a New Zealand newspaper announced the outsourcing of 70 sub-editing jobs to Australia (details here); an American newspaper declared plans to outsource jobs to another country. In the news, the Star Tribune (Minneapolis) will be sending 25 graphic design jobs to India (details in this page). Of course, the union is mad. Again, this site’s contention in regard to this topic remains.

This site preaches the gospel of outsourcing but is constantly aware of the follies of a few employees of outsourcing companies specifically, call center agents. Of course, most people know that absurd replies to customer questions are heard everywhere. Furthermore, it is also known that offshore contact centers are delivering better services at lesser cost. It is indeed very true, that the benefits of outsourcing far outweigh the costs. As an example, PC manufacturer DELL has thousands of customer service representatives in the Philippines and in a television advertisement in Manila, a ranking Dell executive declares that their BPO facility in the country is the best so far. Here is another testimony to outsourcing’s exemplary benefits.

OTHER DEVELOPMENTS:

- As the US turns to India and other Asian countries for their outsourcing needs, Western Europe is sending jobs to its former adversaries-Eastern Europe. Please read the complete news here.

- Infosys BPO is expanding to Manila. Please read it here.

- While call centers are rapidly being outsourced to Asian countries, some US call centers continue to expand (onshore). Please read it here.

FILIPINO FIRM ACQUIRES US BPO FIRM AS OFFSHORE OUTSOURCING CONTINUE BOOM

While sending jobs overseas has become the trend, a foreign firm purchased a US outsourcing giant.

SPi Technologies, A subsidiary of the Philippine Long Distance Telephone company (PLDT) has acquired Springfield Service Corporation (SSC). SSC is a top player in the US medical billing industry with an employee base of more than 300. It stands to make US$30 million within the next 12 months. Read the entire article here.

Meanwhile, offshore businesses continue to boom. Some refer to it as offshoring, global sourcing and strategic sourcing. Whatever it may be called, sending certain processes to be done offshore is continuing to grow.

An article reports that outsourcing jobs to offshore providers has reached to a level wherein clients have stopped worrying where the outsourcing company is located. Read the entire article here.

Well, the basic premise continuous. Jobs are sent offshore in order to find the best talents that will get it done, lessen cost and free internal resources that can be devoted to the main strategic goals of the company.

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

IF YOU BUILD IT, WILL THEY COME? -- Continued

What made me select the previous post for publication (in this blog) is my disbelief at the consultant's brazen attempt, whether intentionally or unintentionally, to increase her inventory (of properties to offer), at the investor's peril.

Some liars are difficult to spot. However, there are those who can be smelled from miles away.

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"A consultant's role is to present the best possible options to the clients. In the BPO industry, making property owners spend while awaiting possible locators is never an option. The money invested sleeps, the facilities become outdated therefore reducing the possibility of it being used. Furthermore, the equiments can burn to the ground or get stolen. There is no real guarantee that money will ever be recovered."
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First of all, her example is fallacious. Among the things that I didn't mention to her, is the fact that I was a part of that particular building's construction. Seven years ago, when the country was going through a period of economic difficulty, that infrastructure was built with the intention of making it an Information Technology (I.T.) hub. The building is supposed to house IT developers. For quite sometime after construction, the building had a low occupancy. It was only later, when the call cnter industry boomed, was the building fully occupied. I can hardly consider cantact centers as IT developement companies.

During our meeting, the "Consultant" also noted an operational call center (near my client's property) which was built without any client in mind. She added that they offered that facility to their long term client, only that, the decision was to locate elsewhere. Why did her client locate far from that facility? I know the reason. That particular building is far from the present popular call center locations. The company probably did not want to risk being the first to locate in that area and have a hard time recruiting employees. That is actually my main hesitation. My client's property hardly has a call center nearby. Though my assessment (based on experiences) showed that it is a good spot, I am not sure if the prospective locators sees it the way I do.

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"No consultant worth his salt, will ever lead anybody in a
road to perdition

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I didn't bother pinpointing the lies that I heard so that others will recognize her, as easily as I did. Had I told her, she would have modified her story before talking to the next potential client (victim?).

In my opinion, a consultant's role is to present the best possible options to the clients. In the BPO industry, making property owners spend while awaiting possible locators is never an option. The money invested sleeps, the facilities become outdated. thus reducing the possibility of it being used. Furthermore, it can possibly burn or get stolen. There is no real guarantee that money will ever be recovered.

That property consultant, in my opinion, was simply out to make money out of her retension fees. In so doing, she is also increasing her inventory of properties that can be offered to her clients. That is not the way to honestly live. If clients make money out of the options presented, the consultant's presence becomes indispensable. Otherwise, there is no reason why any investor should hire one. No consultant worth his salt, will ever lead anybody in a road to perdition.

IF YOU BUILD IT, WILL THEY COME?

One client chairs a group of companies that successfully developed several real properties during the past few decades. Not long ago, he consulted me regarding the BPO prospects of his company. He mentioned having noticed the boom in the office leasing business due to the upsurge of BPO firms. Call Centers have taken over a number of previously empty office buildings and numerous projects that are yet to break ground have already been fully committed.

I was given a preview of their inventory that can possibly be converted into BPO facilities and asked of my opinion and help, being an industry insider. The following day, I wrote a few Call Centers and made a preliminary presentation of my client. Several replies came but I find a particular response worth sharing in this space.


A consultant to a giant call center company, called and asked to meet with me in their office. I agreed while asking if their client has a requirement that matches our inventory. The reply was positive. Arriving on time for my meeting, I was made to wait for half an hour while the person I was to meet, rummaged through her things. During the meeting, I described the properties available for BPO use and asked for its prospects (with her client). She then enumerated a number of projects that my client should put into effect. In summary, my client was being asked to build an expensive BPO facility, with a minimum size of 5,000 square meters, among other things.

Very politely, I asked if their call center will lease our building, should my client spend for the infrastructure that they ask for. The reply blunt was "First, build your facility, then we will offer it (to clients)." A bit surprised, I explained that my client is willing to invest, but no businessman will spend (that much) without any indication that money will be made from it.

The reply was "You have to show to your prospective lessee/s that you have the confidence in your company and the capability to spend & maintain the facility, before you even talk to them."

She added; “Look at this particular building at _ _ _ _ _ _. It was built without any lessee on the list, but now it is filled to capacity.”

Geesh!!!! TO BE CONTINUED....

New jobs posted

The other blog posted a couple of new job opportunities.

Please click the BPO Job Opportunities at the sidebar of this page.

You may also opt to go direct by clicking here.

Online BPO and Work at Home Opportunities

Browsing through the internet, several work at home ads can be found. A few require do not require a membership fee in order to gain access to (online jobs) but a big majority does. Some membership fees may be as low as US$5.00 but there are those that can go to as much as US$199.00 or even more.

Through the years, a lot of news articles claim that fraudulent advertisments are all over and that unsuspecting viewers have easily fallen victims of unscrupulous sites.

I created a new site that will publish vacancies that are personally known to the author/s to be in actual existence. The blog will also post advertisements found through the net but all of it will be accompanied with short notes/ reviews. The authors of this site will also browse through, but not limited to Google advertisements and will try conduct verifications and authenticate some ads.

Ads that are personally found to be truly reliable and those that were verified and authenticated by reliable sources, will be accompanied by this site's "Seal of Approval".

Check the site regularly and tell your friends about it.

7th E-Services Expo: KPO

The Businessworld reports regarding the recently concluded E-Services Expo, wherein the Philippine government asked the local BPO industry to "Upgrade" in order to keep up and overtake the competition. The local industry was also urged to move into the KPO (Knowledge Process Outsourcing) business in order to bring in higher revenues and eliminate the need to compete in the cut throat BPO sector.

"According to BPO advisory and equity manager Tholons, Inc. the KPO market is poised to grow to $17 billion by 2010 from last year’s $3.7 billion. India is expected to capture around 70% of the total market, while Philippines — along with China, Russia and the Czech Republic — are described as the emerging players next to India. Tholons chairman and chief executive Avinash Vashistha said the Philippines can compete well in the areas of animation, content, health care, as well as financial and legal services. "India will definitely be the dominant player, but Philippines will be distant but clear second," Mr. Vashistha said.

Mr. Vashistha and Harry van Geijn, the BPO consultant of the government of the Netherlands, both agreed that Europe is a lucrative market for the Philippines to tap in the area of KPO.

One of the biggest drivers of demand for Philippine-sourced KPO services is that continent’s declining population.

"Population [growth] has already reached its peak and is estimated to decrease 10% year on year. But, we still remain a growing economy and offshoring is the only way to deal with this," Mr. Geijn said.

"The European Union is a very high potential market. This year, you will see more KPO activities because the labor force problem is not going to be better. The same is true with the US," Mr. Vashistha said."

Everybody, take heed! The leader speaks!

This is very much worthy of commendation. Let's hope that all other players will immediately follow.

Despite a 31% growth in revenues (US$ 31B), Indian BPO companies are getting their acts together in order to maintain their leadership.

In the annual meeting of the country's industry group, experts emphasized the need to innovate and not simply rely on the low labor cost and large talent pool of their country. The inventory of qualified talents is diminishing, wages are increasing and other low cost BPO centers like Eastern Europe, China, the Philippines and Vietnam are also fighting for their share of contracts from their biggest client-- The United States.

Please click here for the rest of the story.

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.

New Submarine Cable system for RP

Good News for Asian BPO!

The Philippine Daily Inquirer reports that the Hongkong based company- Asia Netcom will be installing a 23,500 kilometer submarine cable system that will augment the existing telecoms infrastructure connecting the Philippines with the rest of the world. The project which is estimated to cost $636 Million, is expected to be completed by July 2008 .

The Competitive Advantage of the Philippines II

Despite being a newcomer in the global BPO industry, the Philippines have steadily increased its foothold as a top outsourcing destination.

Rest of Asia ready to grab BPO jobs from India, RP--study
INQ7.net, Agence France-Presse
Last updated 08:44pm (Mla time) 11/05/2006

THE PHILIPPINES and India have to boost their overall competitiveness, as Asian countries gear up to get their share of the global offshore outsourcing pie, a recent global study showed.

These top two outsourcing destinations will eventually compete with China, and other Asia Pacific countries that have similarly positioned themselves as outsourcing destinations, the latest Offshore City Competitiveness Report of market research firm neoIT showed.

The study noted that companies have "moved beyond India" and the Philippines into not so well-known cities in the world since companies want to create a "global footprint."

China and Eastern European countries are starting to attract offshore outsourcing deals because of specific language skills required.

China is particularly keen on toppling India in the "services globalization arena," the study added.

Meanwhile, Malaysia, Thailand, Vietnam, Sri Lanka, and Pakistan are emerging as alternative outsourcing destinations in the Asia Pacific region.

Companies outsourcing their non-core business processes are now looking for multiple locations that cater to specific requirements, the study said.

Manila is currently known for its strengths in English voice-based customer care services, which mainly caters to North American-based companies. It is also an ideal destination for back-office processing activities, such as payroll and accounting, the study said.

Manila has been a global services hub of many multinational companies, and has a "good talent supply" from universities, the study added.

The neoIT study identified two categories used to identify outsourcing destinations: generic and enterprise-specific factors. The generic factors include cost, human capital, infrastructure, risks, and environment. The enterprise-specific factors, on the other hand, include language compatibility, physical proximity (of offshore facility to the company), socio-economic affinity, and the availability of sector-specific expertise. The supply of middle managers and attrition rates are also considered.

Taking into account these categories, the study concluded that the National Capital Region of Delhi is the "most suitable location." This was, the study noted, despite the eroding cost advantage and supply constraints of these cities.

"A lot has been said about India's eroding cost advantage and supply constraints," senior neoIT consultant Sabyasachi Satyaprasad said Saturday.

"But the fact remains that in terms of talent supply and cost arbitrage, India is still the leader," said Satyaprasad, whose company is headquartered in San Ramon, California, with offices in India and the Philippines.

Industry analysts closely watch profit-margin trends of Indian outsourcing companies for signs their competitive edge is eroding.

But Satyaprasad said in an interview with Agence France-Presse that there was no sign of that happening and Indian outsourcing giants like Infosys, Wipro and Tata Consultancy Services routinely report profits that beat market expectations.

New Delhi, Bangalore, Hyderabad, Mumbai, Pune, Chennai and Kolkata were the seven most favored sites worldwide to locate offshore, said the report, assembled from feedback from over 60 clients.

The study also included Manila as among the top 10 cities in the world for offshore outsourcing jobs. Other cities identified were Ho Chi Minh and Shanghai.