India, Philippines to get larger share of outsourcing pie

IANS Mumbai March 16: India and the Philippines are set to corner a larger share of the global offshoring business with 127,000 new call centre jobs likely to be added in the two countries over the next five years, says a study.
Whilst India continues to dominate the global call centre outsourcing landscape, the Philippines threatens to poach some activity as its own market grows in strength, said the survey conducted by London-based research firm Datamonitor.
“Several outsource providers are seeing their order books filling up once again with offshore projects destined for India and the Philippines,” said the report made available to IANS.
According to the report entitled, ‘The future of contact centre outsourcing in India and the Philippines’, the United States continues to represent the vast majority of overseas demand followed by Britain.
“Both India and the Philippines will see substantial growth in call centres now that US presidential elections are out of the way allowing US and Britain businesses to ramp up their offshore operations,” it said.
“Besides the attractions that India and the Philippines offer western firms in terms of low cost access to highly skilled staff, the two markets will also demonstrate substantial growth in their domestic call centre markets.”
By 2009, close to 100,000 agent positions — seats from which call centre agents make and receive telephone calls to internal or external customers — will be serving the Indian domestic market, while the Philippines will have 21,600.
Datamonitor predicts that more firms are set to follow the likes of British Airways, Citibank, General Electric and HSBC, all firms that have spun off a part or all of their captive operations in India.
“Outsource providers are competing to run entire customer processes for their clients, rather than merely the voice-based call centre part,” said Mr Ryan Powell, call centre analyst with Datamonitor and author of the study.
“The fact that they are able to win this kind of work is testament to the efforts that have been placed on assuring quality control and improving call resolution rates in order to improve customer satisfaction.”
According to Datamonitor, outsource providers are looking to increase their operational footprints around the globe while seeking to provide customers with a broader range of end-to-end solutions.
The MphasiS BFL Group, one of India’s leading mid-size IT services firms, said on Monday it had acquired a US-based business process outsourcing company for $ 16.5 million to expand presence overseas.
The study, however, warned that the Philippines might emerge as a competitor to India in the offshoring business with the former unveiling new initiatives to boost its presence in the global market.
India’s educational system and training programmes have helped transform the country into a global outsourcing superpower.
The nearly $ 3 billion business process outsourcing industry in Asia’s fourth largest economy has now become one of the top money-spinning ventures for the country and is set to grow at a dazzling clip in the years ahead.

Outsourcing IT/ Management Strategies

Business leaders eye external providers to cut costs, but there are ways to take command of the process while helping achieve corporate goals.

By Marc FerrantiNetwork World,

In an ongoing drive to reduce capital expenditures, corporate executives continue to consider outsourcing as a way to pare IT costs and focus on projects that are most directly linked to business goals.
Experienced executives agree that outsourcing almost always sows uncertainty in internal personnel. It can result in layoffs and budget reductions among IT middle managers. The silver lining for IT managers is that there are opportunities for those who are prepared to embrace change and help their companies face the challenges of dealing with outsourcers - whether those external providers are in Bangalore or Boston.
"Take charge of decision making, and take the fear out of the process of using external service providers," says Reynaldo Gil, CEO and founder of Commendo Software in Fremont, Calif.
Capitalize on the fact that outsourcing is notoriously hard to do, Gil says. In a career that includes stints at Bank of America, Charles Schwab and IBM, Gil has pulled the plug on what he calls "nightmare scenarios." He once advised a CEO to walk away from an intellectual property dispute with an external provider, at a loss of close to $1 million dollars.
Other technology and business leaders agree that when it comes to outsourcing, companies need all the talent they can muster to do it right.
"The management of outsourcing partners does create certain positions to ensure that the deliverables expected from your partners are actually done," says Cecilia Claudio, CIO and vice president of engineering for Align Technology, a Santa Clara maker of orthodontic products, and a board member of RampRate, an IT outsourcing advisor in Santa Monica, Calif.
"You need a team to manage the outsourcers, a program management office or an offshore development management center," says Claudio, who has worked at Zurich Financial Services, Farmers Insurance Group and Xerox over her 30-year career. In the 1990s, Claudio helped engineer Xerox's bellwether $3.2 billion outsourcing deal with Electronic Data Systems.
Claudio says outsourcing program management involves a variety of tasks and skills, which include the writing of service-level agreements; analysis of contracts; documentation for how processes should be managed; and creation of liaison roles to ensure effective communication among IT, the business side of the company and outsourcers.

At Align, Claudio started to bring in program managers from offshore providers skilled in these areas. She assigned some of her IT staff to work with the managers on different cross-functional projects."People willing to move out of a fire-fighting role can work at a higher level, on projects that can transform the way a company does business," Claudio says.
Of course, not all IT managers have access to mentoring programs such as Claudio's. However, IT middle managers in any company can develop their project management chops, according to experienced executives.

"Be process-oriented, focusing on managing resources," Commendo's Gil says. "Analyze what you do, apply metrics to what you do, break out costs and inventory skills. See how you can do things faster, better."
Process management is regarded as a crucial factor in coordinating work and communications among dispersed offices and personnel. "Errors get compounded and magnified in a distributed environment, which is the world of outsourcing," says Marc Hebert, a vice president at Sierra Atlantic, a provider of ERP implementation services in Fremont.
Process management is essentially a way of breaking down work into tasks that can be benchmarked and replicated. By formalizing and measuring what they do, IT managers can more readily show their business counterparts what they accomplish.
Hebert, Gil, Claudio and others make a key point: Cost-containment is not the only, or even the best, reason to use outside providers. Benchmarking IT processes can help managers lead to where a company can best use outsourcers, and where internal staff should be focused.
"There are many reasons to outsource: to get 24-hour support, to take on specialized skills that you might need for only a short time, to bring in more mature partners," Gil says.
Take initiative by suggesting small pilot projects to be outsourced, starting with lower-level jobs like infrastructure maintenance. Claudio took this approach at Farmers and forged solid working relationships with business leaders throughout the company.
Creating benchmarks for what your staff does and proposing outsourcing pilot programs to accomplish goals more efficiently gives you a shot to expand the total budget you control or your overall responsibility.
Middle managers in IT who learn to measure and communicate what they do to business managers will be seen as a valuable resource, says Tony Greenberg, CEO of RampRate.
IT managers who have strong soft skills are sought after as companies transition using outsourcers, Claudio stresses. "I look for people who are good communicators, good negotiators, people who really know how to get the most out of any particular situation, who can put themselves on the other side and have great empathy for the other side," she says.
"People involved with help desks and network management are in a good position to hone their communications and negotiating skills since they need to contract, for example, for services for bandwidth and deal with a complex network of relationships to have systems installed," Gil says.
Ultimately, outsourcing consultants and top executives advise IT managers to prepare to embrace change, and take the initiative to develop the skills required to deal with outsourcing.
As Gil put it: "You don't want to get run over by the train - you want to learn to drive it."


CHALLENGE
Company executives are looking at outsourcing to reduce IT costs and probably internal staff to focus on core competencies.

RESPONSE
Take the bull by the horns and help drive outsourcing. By being process-oriented, show where internal staff is efficient; suggest pilots to assure outsourcing is done right and in doing so reduce fear among personnel.