By Riza T. Olchondra

Economists warned that the Philippines’ outsourcing sector should develop and market higher-value services to cope with the United States’ moves to “insource” more jobs, which could signal a long-term curb in demand for outsourcing services.

That is, unless Manila-based companies differentiate their services from those that can be obtained in the US and from other outsourcing destinations such as India.

About 70 percent of business process outsourcing (BPO) firms in the Philippines rely heavily on US clients, although demand for outsourcing jobs is growing in Europe and Australia.

Since BPO firms, knowledge process outsourcing companies, and similar entities contribute greatly to employment and foreign exchange earnings, US insourcing “could lead to a decline in both (jobs and dollar revenue),” Dr. Cid Terosa of the University of Asia and the Pacific said via text message.

To cope, the Philippines can venture into higher-value added outsourcing activities. “Cost competitiveness and higher efficiency will be key to maintaining current business,” Terosa said.

“There is no immediate threat in the short term but such inward-looking measures may affect the growth of BPOs in the future,” Dr. Benjamin Diokno of the UP School of Economics said via text message.

Diokno said that it is not clear whether the proposal in the US Congress to remove tax incentives to outsourcing companies apply to all or only to new BPO investments. “In any event, US firms have to figure out whether it is still worthwhile to outsource abroad should the tax incentives be withdrawn,” Diokno said. The National Economic and Development Authority has not issued a preliminary impact assessment as it continues to monitor developments on the proposed “insourcing” in the US.

Industry group Business Processing Association of the Philippines (BPAP) also said it was “vigilantly monitoring” developments on proposed US measures.

BPAP executive director Martin Crisostomo said in a phone interview that the group’s member-companies hope to continue to give US clients cost competitiveness so they can grow and create more jobs at home. “In a free and mature global market we believe that, as private enterprises assess best economic solutions to drive competitiveness and consumer value, global market forces will prevail,” Crisostomo added, “We are hopeful that those companies that have benefited from IT-BPO services can relay to the policy makers in the US that outsourcing will be more helpful to the economy.”

The US Bureau of Labor Statistics said in a report posted on its website that non-farm payroll employment rose by 200,000 in December, and the unemployment rate, at 8.5 percent, continued to trend down.

Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining. Over the 12 months of 2011, the bureau said, nonfarm payroll employment rose by 1.6 million.

Industry estimates that global demand for outsourcing services would triple to a range of about $250 billion to $256 billion by 2016 from the $125-billion-to-130-billion market in 2010.
http://business.inquirer.net/38961/us-‘insourcing’-trend-a-cause-for-philippine-concern

President Obama is working to bring outsourced jobs back to the U.S., he said in his weekly address.

President Obama — with the help of a few household items and a Republican-friendly idea — promised to make the federal government more pro-business.

The President displayed a padlock, a pair of boots, a candle and a pair of socks — items all made in the United States — and vowed to stem the tide of American business owners outsourcing their jobs.

“I’ll make sure you’ve got a government that does everything in its power to help you succeed,” Obama said in his weekly address.

The President pledged that he would soon unveil a new tax code that would give incentives for companies that bring jobs back from overseas — and eliminate breaks for those that do not.

Obama was vague on the details of the tax reform — saying they would be revealed in the coming weeks — but recent remarks from administration officials indicate that it could be a sweeping change of the nation’s tax code.

That move appears lifted from the Republican playbook, and could provide Obama with a winning election year issue, his advisors hope.

The swipe at businesses who sent jobs overseas has also been interpreted as a subtle jab at Obama’s would-be White House rival Mitt Romney, who oversaw the outsourcing of thousands of jobs during his time in the private sector.

Source: ABC News

By Mark Pesce

On a recent holiday to the northern rivers, I sat in a restaurant with some locals, extolling life in Sydney, and in particular the new freedom of using one of the car-sharing services popping up throughout the city. In my eight years here I’ve never owned a car; today there are three of them within 50 metres of my front door, for use as occasion demands – each with its own reserved parking space.

The eyes of one of the locals, a very successful retailer and entrepreneur, grew wide. “I had the idea to do that 30 years ago. But it was too hard.”

“It’s easy now,” I said. “You just log onto the website, look for an available car, and make a reservation. Takes all of 30 seconds.”

Scheduling a fleet of a few hundred cars across several thousand drivers once required vast and complicated record keeping, greased with plenty of labour. That same capability, computerised, networked and delivered into every home and onto every mobile, drops the bar low enough that the previously impossible becomes realisable.

The friction associated with this so-called ”collaborative consumption” has been removed. In Sydney we share cars, but the Berkeley Tool Lending Library allows a northern California community to share a broad variety of tools. You borrow what you need, when you need it, instead of spending yourself into poverty, building a collection of every tool under the sun.

Consider the number of lawnmowers sitting idle in sheds throughout Australia, trotted out every few weeks for a quick run over the lawn. Does any neighbourhood need more than a few lawnmowers? Probably not. But we’ve never had an infrastructure enabling neighbours to share with one another. We’ve always informally borrowed this and that – it’s part of being a good neighbour – but when we throw some software at the process, all of our material goods begin to move more quickly, flowing to where they can be put to best use.

What happens if a neighbour returns a broken lawnmower? Or if I have a smash in the share car? Who’s responsible? Technology allows us to share on an unprecedented scale; this will force us to develop customs and contracts to support our new capabilities. If you break borrowed items, your neighbours will shun your requests – and they’ll tell everyone in the community you’re a poor risk. Being a courteous borrower gives you access to better resources and a higher quality of life. Done wisely, sharing makes everyone richer.

These same techniques make businesses more efficient and profitable. Businesses can share resources – such as transportation and equipment – with one another, multiplying the value of their investments with higher rates of resource utilisation. A new class of businesses, specialising in the management and logistics of shared resources, allow firms to outsource their sharing. Partnering with these services in order to maximise returns on capital investment, businesses simultaneously gain access to a range of capital equipment previously beyond reach. Sharing is becoming a bedrock of 21st-century capitalism.

All of this means across the rest of this century our shared future will look more like our ancient, tribal past than our recent history. With less individual ownership, and more leasing and borrowing, businesses will manufacture less of any one thing. Yet as people free up resources they formerly poured into single-user cars, lawnmowers and goodness knows what else, people will still want to provide the best for their families, and will turn to businesses that can provide it. Sharing will not make us less materialistic, if only because it gives us more material to work with.

Sharing changes the way we work together. Politics has accelerated to light speed over the past year, as 7 billion people connected through 6 billion mobiles, share their frustrations, aspirations and strategies for dissent. Sharing is a two-edged sword: it makes everything more efficient by making people much more potent. It’s getting hard for any government to push its people around.

So when you borrow your neighbour’s mower this summer, remember it’s just the beginning. We live continuously connected lives, and our possessions are beginning to reflect that. In a few years we’ll have forgotten that there was a time, before tomorrow, when sharing was hard.

Mark Pesce is a futurist, author, educator and inventor. Read more about the future on his blog,
http://www.smh.com.au/opinion/society-and-culture/a-shared-future-will-connect-society-20120101-1ph64.html

The Living Away from Home Allowance (LAFHA), once a lucrative incentive for highly paid migrants to linger in the twilight zone of temporary rather than permanent residency, has been reformed in a controversial government move to prevent tax fraud. The Australian Treasurer, Wayne Swan, confirmed the changes to LAFHA on 29 November 2011. 

The allowance, claimed by many 457 holders, provides for cash payments to cover the costs of living away from home, interstate and overseas travel. After reports that some foreign workers were receiving up to 90 per cent of their salary tax-free, and as part of the budget-cut program, the government decided to reform LAFHA to specifically prevent overseas workers from claiming back tax.

From the proposed start date of 1 July 2012, in order to continue claiming the LAFHA one must maintain a home for their own use in Australia (rather than their home come country) from which they are living away from for work. For example if a 457 holder owned a home in Sydney and their company sent them to Melbourne for work. In addition individuals claiming the allowance need to demonstrate their actual expenditure on accommodation and food beyond a statutory amount rather then simply claiming “reasonable costs” as is currently the case. 

Some possible effects include:
- highly paid skilled overseas workers/senior executives may be deterred from working in Australia if there are better tax incentives from other countries; more 457 workers will now be attracted to become a permanent resident as there is no more tax incentives for them to remain a temporary resident.

If you are currently holding a 457 visa and claiming the LAFHA for tax reasons and wish to now apply for permanent residency contact your migration agent in order to set the ball rolling.

By Martin Conboy, President – Australian BPO Association (ABPOA)

Australia will have most of the big engineering infrastructure projects in the global oil and gas industry during the next ten years. This represents up to 75 per cent of all projects, and that is really going to stretch our capacity to attract the volume of people required.

Media reports suggest that there is a shortage of over 20,000 professional engineers, and that number will only grow as a result of the rampant demand from the Australian mining and resources boom.

Engineering companies in the oil and gas, mining, consultancy and infrastructure are the firms that most need to attract and retain skilled workers.

Even the fact that Australia’s universities are producing more mining engineering graduates each year, it is still only half of what the industry needs. First year salaries are $100,000 plus allowances and the employment rate is 100 per cent.

Because of the labour shortage, some mining companies are increasing automation and are having the processes monitored from other locations. It should not be long before some clever outsourcing companies spot this opportunity.

A whole new outsourcing market has sprung up with recruitment companies actively targeting skilled migrants in the UK, Ireland, South Africa and India, and some engineering companies are outsourcing or offshoring project management, design and fabrication projects to New Zealand in order to connect with skilled labour.

In a classic case of BPO 1.0, New Zealand has a good supply of engineering skills and lower labour costs amplified by the strong Australian dollar and flexible work packages. Apart from addressing the work that needs to be done, it also translates into 30 per cent savings on labour.

As a mechanism to fill the recruitment pipeline, savvy recruitment companies are using Philippine-based resume harvesters to target potential recruits efficiently and cost effectively.

Engineering companies moving to this type of back office delivery model and implementing proven, effective processes via progressive forward thinking, recruitment companies can expect business benefits beyond cost reduction. Recruitment-related business process outsourcing could help recruitment performance, lower operating costs, and increase the size of the available pool of talent.

With ultra competitive strategies required to identify talent quickly, using skilled and inexpensive Asian-based resume harvesters is an eloquent solution. This model can also help create competitive advantage for engineering companies by predicting and fulfilling labour force needs and aligning talent plans.

Not only can this reduce recruitment lead times and costs, but it can also ensure a broader reach and consistent service experience regardless of geography, as it provides a process outline for candidate identification and recruitment administration, which can then be used across all geographies.

By Mark Atterby – Senior Staff Writer

Traditionally RPO (Recruitment Process Outsourcing) has been used to improve quality and reduce costs in the recruitment of permanent staff. Recruitment of the contingent workforce was never given the same the level of attention. Today, according to research from the Everest Group, organisations need to adopt a total acquisition approach, where permanent and contingent recruitment are all part of a single integrated hiring program.

The Recruitment Process Outsourcer is a lot different from the other service providers such as contingency search firms, staffing agencies and retained search providers in dealing with the entire recruitment process. The RPO provider is entirely responsible for the methods utilised and conducting the entire recruitment process and the outcomes of the process.

The Recruitment Process Outsourcing Association defines RPO as follows: “When a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of new hires, including staff, technology, method and reporting. A properly managed RPO will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance”
Kimberley Hubble the Executive General Manager – RPO at Hudson Recruitment, comments,” At first cost reduction was the primary motivation for adopting an RPO solution. Though cost is still important, the key thing they want now though is flexibility and scalability. This was demonstrated during the economic recovery following the global financial crisis. As business started investing again and consumer demand was expanding, organisations needed to rapidly take on more staff. RPO solutions offer the flexibility to scale quickly without having to invest in the substantial recruitment resources. ”

According to the Everest research report, Rise of Blended RPO, the outsourcing and management of both contingent and permanent hiring requirements, has largely followed a silo-based approach. The report highlights however, that by adopting a blended approach, that combines both contingent and permanent hiring requirements into a single program, organisations can achieve significant benefits.

“The initial focus of RPO was on full time recruitement, particularly in areas where people with a higher skill or expertise level were required. But gradually RPO is moving more and more into other recruitment categories”, says Kimberley Hubble.

“Given the current state of the equity markets and the uncertainty because of the European contagion, we are seeing many publicly traded businesses across the region who are looking for a scalable/flexible RPO solution that lowers their operating costs in low periods of recruiting activity”, commented Andrew Grant, Global Managing Director of Talent2′s Recruitment Managed Services business. He went on to say, “having said that, we are seeing that the blended model for RPO combining the hiring of FTE and contingent workers is definitely on the rise in the UK and Australia. In Asia, only 12% of the workforce is contingent and mostly lowly paid.”

“As organisations are making greater use of contract, casual and part-time labour to meet the fluctuations in demand and general business conditions, a more disciplined approach to contingent recruitment is necessary”, comments Rajesh Ranjan, research director for the Everest Group. Many scarce and high end skills are increasingly likely to be found in contingent workers who are in strong demand.

RPO, over traditional recruitment, offers a range of benefits including economies of scale, economies of scope, cost and flexibility. The Everest report states the following benefits:

Lower costs – 10 – 15 % in savings can be me made on better workforce utilisation with another 7 – 10 % savings on demand management Lower service and vendor management cost.

Greater flexibility – Demand for contingent hire increases over permanent hire during recessions. A single provider for both provides the necessary flexibility to scale one up and the other down as demand requires it. Great accountability and compliance can be achieved by having one provider, where having multiple vendors for different hires hampers the accuracy and timeliness of reports and analytics.

Strategic Impact – Blended RPO results in better alignment of workforce planning to overall business strategy. The contingent workforce is an increasingly important part of the organisation. With human capital becoming the key competitive differentiator and an increasing part of this resident in the contingent labour pool, the companies that can successfully tap into it have a competitive advantage.

Regardless of the advantages and the increasing spread of blended RPO the report highlights that there a number of challenges limiting its adoption. HR normally handles permanent recruitment where procurement manages the contingent workforce. The different areas of recruitment are managed in silos within the organisation, requiring buy in from various stakeholders. Organisations may also be reluctant to concentrating everything into the hands of a single provider.

Each enterprise needs to evaluate its own requirements and understand how an integrated talent acquisition approach will benefit the business and how the challenges will be met.

By Hayden Walles
Photo by Chris Harrison

It’s not unusual these days to see virtual keyboards on the touch screens of portable devices like tablets and phones. These devices lack a physical keyboard but make up for it by displaying a picture of one on the screen and letting the user tap away on that.

But virtual keyboards are not just constrained to the screen. Today almost anything can become a keyboard – from a table top to the palm of your hand.

Korean company Celluon has been developing virtual keyboards for several years and their latest product is the Magic Cube, a small box that fits in your hand yet provides a full-size keyboard when needed.

Switch it on, sit it on a desk and it projects an image of a keyboard on to the surface in front of it. Tap the virtual keys and the corresponding characters are communicated wirelessly to any compatible device, from a laptop to a smartphone.

The principles involved are very simple. The projection of the keyboard is just that – made by a tiny projector at the top of the box. At the bottom of the box beams of infrared light are emitted just above the surface of the desk. As your fingers tap the surface they cut through these beams, which are reflected up to a camera in the middle of the box. The camera sees the reflection and works out from its position which key you have “pressed”.

Though the Magic Cube is clever it is essentially just a very portable replacement for a real keyboard.

More radical possibilities are on the horizon. Microsoft researchers Hrvoje Benko and Andrew Wilson, along with Chris Harrison of Carnegie Mellon University in the United States, recently showed off a system they call OmniTouch, which turns any surface into a touch screen.

OmniTouch is made up of a shoulder-mounted projector and depth-sensing camera combination. The projector displays interactive images on any nearby surface – a wall, a table, a pad or even parts of the user’s body.
The camera tracks the user’s fingers, working out where and when they touch other objects.

Putting it all together allows the user to, for example, dial a phone number on a keypad displayed on the palm of their hand, or draw projected pictures on an ordinary paper pad.

Pretty much anything, in fact, that you can do with an ordinary touch-sensitive display, except that the display itself can be any suitable surface.

We take it for granted that the size of portable devices is a compromise between compactness and usability. But if the display and controls need not be physically part of the device, all bets are off. It’s too early to tell whether systems like OmniTouch will take off. But in a few years they may virtually replace their physical counterparts in many situations, in more ways than one.

The Press, New Zealand

The 2011 Queensland Top 400 Business Awards officially honors NRG Global Solutions as a winner in the Rising Star category.

Held last November 25 at the Sofitel Brisbane, the Gala Awards Dinner drew in 400 of the top businesses, where a select 13 were given special honors. Besting hundreds of companies, NRG Global Solutions’ President Laurence Barlow accepted the Rising Star Award, proving NRG’s mark by leaping to 97th on this year’s list from the previous 382nd.

Barlow proudly recalls the night and how NRG climbed its way to success; “It was an exciting surprise to receive the Queensland Business Review Rising Star Award for the State’s top 400 companies. It would not have been possible without a great team both in Australia and the Philippines. I’d particularly like to thank our CEO Michele Bubke and our Asia Pacific Operations Manager, Scott Pollock. Their tireless leadership has ensured consistent growth over the last 3 years.

The Australian business community is developing a better understanding and acceptance of ‘Business Process Outsourcing’ (BPO). I think the Global Financial Crises has pushed businesses to look for more innovative ways to manage customer service delivery channels, and this is where we come in. The globally compliant Call Centre facilities we have in Australia and the Philippines handle customer service end-to-end, from ‘Welcome Calls’ to ‘Debt Collection’ for many of Australia’s largest Banks, Telecommunications and Utility companies.

As an indication of the growth in this sector, we opened our offshore facility in the last Quarter of 2008 with five people. In August this year, we moved into a new globally compliant facility that has the capacity to house 450 agents, implements modern security systems, and uses secure data protection measures.

Another contributor to the growth is our multi channel delivery technology. While it is true that most of the customer service work we take on is ‘voice based’, we are building out our service offerings using online chat support, text reminders, convenient payment gateways via iPhone, and an array of Cloud Computing applications that enhance and expedite the customer service experience.

We are looking forward to next year’s business awards. I’m sure you will see us even further up the list.

The use of cloud computing ranges from 75% of customers in the technology and life sciences sector to 25% for financial institutions and customers in the transport, energy and infrastructure sectors.

All customers consider a security breach to be the biggest risk in cloud computing.

Customers in different industries rate secondary risks differently, with financial services organisations rating compliance as the second biggest risk while other sectors rate loss of data and loss of control over data as theirs.

61% of suppliers, and 66% of customers, believe that due diligence procedures have tightened in the last three years.

Just 8% of suppliers thought that they themselves should manage political / jurisdiction risk, compared to 49% of customers who felt that suppliers should manage this risk.

78% of customers believe that managing the risk of data loss should be a joint effort, up from 13% in 2008.

According to a global survey by international legal practice Norton Rose Group on current outsourcing practices and trends, businesses and their suppliers see the same risks with cloud computing solutions.

Nick Abrahams, technology partner at Norton Rose Australia, commented:
“It seems that customers are still concerned about the risks of cloud computing transactions. Customers’ main concerns are security breaches, loss of control over data and loss of data. For financial institutions, compliance risks are also key.

“The cloud computing industry has grown significantly over the past three years, but suppliers still need to convince customers that their data is safe. Recent well-publicised data breaches have not helped.”

The survey also found that customers are using lengthy due diligence processes prior to entering agreements.

Michael Park, technology partner at Norton Rose Australia, commented:
“Due diligence is particularly relevant for cloud computing. The results show that data security is the key risk driver for all customers. Due diligence processes have improved in the past three years, but customers need to develop a due diligence process that tests and evaluates suppliers against key risks.

“The only way for customers to be sure that a potential supplier is appropriate is to visit the supplier, use their systems and carry out reference checks. The survey shows that the risks for customers in different sectors differ significantly. Customers need to ensure that suppliers have considered the risks that are important to them.”

While companies are increasingly taking on responsibility for risks, such as project delay and data loss, opinion is sharply divided on whether the customer or the supplier should take responsibility for political / jurisdiction risk.

“The survey indicates that customers do not perform due diligence on supplier’s staff, assuming that this has been done by the supplier. Recent security breaches, however, show that it takes only one person to cause a devastating reputational impact,” said Park.

“Where a company puts any element of its business into the cloud, it must ensure that due diligence has been undertaken on the supplier’s staff given that they may have access to data about the company and its clients.”

The survey also reveals a disconnect in the way suppliers and their customers view risk. Customers rate reputational damage as a primary risk but suppliers rank it as a secondary risk, and while service performance failure is seen as primary risk for suppliers, their customers view this as a secondary risk.

“Customers need to realise that not all risks can be outsourced to a cloud provider. The regulators are also very interested in cloud. APRA has informed the banks and financial institutions that they need to do the risk analysis of cloud the same way they analyse any outsourcing,” added Abrahams.

“Australia’s technology sector is as busy as it has ever been, and we expect this to continue for the foreseeable future. Cloud computing is a key element to growth. Customers are looking to the cloud to gain flexibility with their technology solutions.”

The report, entitled Outsourcing in a Brave New World, is the second outsourcing report released by Norton Rose Group and details the views of CIOs, General Counsel and Heads of Procurement from 74 businesses globally including technology and life sciences businesses, retail companies, financial institutions, transport, energy and infrastructure companies and the professional services sector, and suppliers themselves.

Please see the report at Outsourcing in a Brave New World.

Norton Rose Group is a leading international legal practice offering a full business law service to many of the world’s pre-eminent financial institutions and corporations from offices in Europe, Asia Pacific, Canada, Africa and the Middle East, and, from 1 January 2012, Latin America and Central Asia.