(In photo: Benedict Hernandez, Executive Committee Chairman of the Information Technology and Business Process Association of the Philippines (IBPAP))

The Business Processing Association of the Philippines (BPAP) announced the formal change of its name to Information Technology and Business Process Association of the Philippines (IBPAP) to accurately reflect the range of information technology and business process management (IT-BPM) services provided from the Philippines.

“This move represents the association’s strong commitment to the entire outsourcing sector, where buyers are looking increasingly at bundled IT-BPM services options. We recognize that IT is an important component of these options,” said Benedict Hernandez, outgoing IBPAP president and CEO.

According to Hernandez, who will officially assume the role of IBPAP chairman of the Executive Committee this month, the name change aims to represent the association in the global IT market since members serve customers for both business process services and information technology. “Changing our name to IBPAP will help preserve as well as expand the Philippine industry’s brand. The new name also emphasizes the less-known fact that we provide the whole spectrum of world-class services from here including corporate and complex services, creative processes and products, customer relations and health care information management, and software product development,” he said.

IBPAP also elected a new board of trustees in its recent annual meeting. The newly elected IBPAP trustees representing industry players are Alfredo Ayala, president and CEO of LiveIt Investments Ltd; Rainerio Borja, president of Expert Global Solutions Philippines and lead operations at the NCO Group; Carlo José, president and head of GSC Operations-Philippines of the HSBC Global Resourcing; Danilo Reyes, country manager of Genpact; and Manolito Tayag, country managing director of Accenture Philippines. Trustees elected to represent the support industry were Gil Genio, head of Business and International Markets of Globe; Juan Victor Hernandez, vice president of PLDT and head of Alpha Enterprise; and David Leechiu, regional director and country manager of Jones Lang LaSalle.

“With approximately 300 industry and support industry members and five partner associations, IBPAP has played a pivotal role in sustaining rapid growth of the IT-BPM and GIC industry,” said Hernandez. “With a new board of trustees, IBPAP will continue to work to drive favorable outcomes across multiple areas to achieve the US$25 billion revenue goal by 2016.”

Hernandez also encouraged industry members and stakeholders to work together to ensure an enduring supply of high-quality labor, support service innovation, and country visibility.

“Guided by our industry road map, there were a lot of things we accomplished in 2012. We now have a breadth of IT-BPM voice and non-voice services that continue to grow year in, year out. For 2013, we must keep building our momentum and continue to provide the right business environment,” said Hernandez.

Alfredo Ayala, current IBPAP chairman and newly elected trustee, said that it has been a privilege to be part of the impressive growth of the industry. “The team has always done a commendable job in making sure that the industry is up to speed on securing more employment opportunities and in maintaining the lead in global voice and non-voice services,” said Ayala.

About the Information Technology and Business Process Association of the Philippines (IBPAP)

The Information Technology and Business Process Association of the Philippines (IBPAP) is the enabling association for the information technology and business process management (IT-BPM) and global in-house center (GIC) industry in the Philippines. IBPAP serves as the one-stop information and advocacy gateway for the industry. With approximately 300 industry and support-industry members, including five associations—the Animation Council of the Philippines, Inc., Contact Center Association of the Philippines, Game Developers Association of the Philippines, Healthcare Information Management Outsourcing Association of the Philippines, and Philippine Software Industry Association—IBPAP plays a pivotal role in sustaining rapid growth of the IT-BPM and GIC industry by working to ensure an enduring supply of high-quality labor, supporting service innovation, and providing country visibility.

IBPAP assists investors in setting up operations easily and quickly in the Philippines. Relevant research, introductions to key government and industry officials, and a series of briefings at each step of the investment process ensure a seamless development process. On-going support is provided through a wide variety of initiatives, including programs for HR development, business development, and on-going knowledge sharing and networking opportunities.

Mathematicians and neuroscientists!

BIG Data starting to come into mainstream

Big data. There’s no agreement on exactly what it is; yet companies are spending hundreds of millions of dollars on it and claiming good returns. And when it comes to spend, a handful of Australian companies are up there with the leaders.

Those are some of the conclusions from a study into big data by Tata Consulting Services for which it surveyed 1217 companies in eight countries in four regions of the world.

Big data loosely defines the collection and analysis of myriad unrelated data sources with the aim of drawing meaningful business insights.

TCS vice-president and chief technology officer K. Ananth Krishnan told IT Pro: ”Australia turns out to be the highest in terms of median spending per company, $50 million.” The median spending in the US was $9 million a company.

However, Krishnan said that, overall, Australia had one of the lowest rates of big data usage. ”The way I would interpret this is that those companies that have started have really dived in with both feet to the extent that they are way ahead of everybody else in the world.”

According to the report, only 32 per cent of Australian respondents said they had undertaken big data initiatives in 2012. The overall figure for the 1217 companies surveyed globally was 53 per cent. India led with 70 per cent, followed by Mexico and the US with 68 per cent. One US company alone, General Electric, has pledged $US1 billion to big data over the next four years.

Frost & Sullivan research analyst Vu Anh Tien agreed that a number of large companies in Australia were making substantial use of big data analytics but the relatively low uptake was the result of skepticism and uncertainty.

Hiring practices, training, and management will draw from a deeper understanding of neuroscience and complex behavioural algorithms. Already, start-ups have emerged that promise to train individuals to increase their mental acuity, focus, and efficiency based on brain science. Company- specific algorithms will be developed for software that vets new applicants based on detailed questionnaires. As science comes to work, human resource managers will need to become versed in these new sciences. While most HR personnel will likely not be scientists, they will need to be able to understand the language of these disciplines and collaborate with scientists in order to assess and implement some of the new tools. A manager may not know how to design Monte Carlo simulations to optimise workflow, but he must be able to speak the language of mathematicians to understand the theory behind suggested methods.

See next story about Big Data and BPO

Read more: http://www.theage.com.au/it-pro/spending-big-on-big-data-20130422-2iaho.html#ixzz2RhE1iRyd

By Martin Conboy

BPO has matured, evolving from industrialisation and process efficiency, to a focus on analytics, on demand service platforms and innovation. This creates a significant opportunity for organisations to ‘leap frog’ earlier generations of BPO and drive business outcomes previously not associated with outsourcing. This schism in the BPO journey sits in the space between BPO 3.0 and BPO 4.0 and it is all about greater functionality and process excellence delivered by the latest generation of BPO, including accelerated speed to market, enhanced innovation, stronger customer loyalty, savvier talent management and top-line growth.

Against a background where physical products are commoditising, customer service is seen to be a crucial differentiator of the service offering. It is essential that the service delivered supports the product promise. In the future, it is only those organisations that provide outstanding service that will thrive, since it will allow them to differentiate their products, charge a price premium and maintain their competitive edge in the marketplace.

In the evolution of the BPO journey the reader will recall from previous readings in the Sauce that BPO 1.0 describes the first step on the BPO journey, commonly known as Labour Arbitrage. The next stage is BPO 2.0, which addresses process reengineering and using technology and point solutions to improve processes and squeeze out value and efficiencies. BPO 3.0 starts to incorporate new channels like the cloud and social media. Needless to say BPO 3.0 starts to see a dramatic leap forward in data accumulation inside the enterprise. BPO 4.0 is all about big data and how one can make sense of it and not get overwhelmed by the voluminous amount of data that are generated by all of the information flowing through the new channels.

In parallel the growth of digital content continues unabated. The Internal Data Corporation (IDC) predicts that the digital universe, a measure of content, will have grown by a factor of 300 from 2005 to 2020. And Google’s own statistics show that its total number of indexed pages was one trillion in 2008 and is expected to reach 30 trillion in 2013. The average number of daily searches on Google, another measure of digital demand, has grown by a factor of four from 2007 to 2011, according to comScore.

Marketers have contributed significantly to this content growth. Based on a 2012 survey by Content Wise, marketers increased their total spending on content development by 45% from 2005 to 2012, when the percentage of marketers’ budgets allocated to content creation increased from 31% to 39%.

I caught up with Russell Ives Accenture Australia BPO Lead and he described how this hot new frontier is being constructed around the customer experience and using data analytics and building algorithms and crunching facts and numbers to look for opportunities to improve business outcomes.

Big data is the new business black. It’s a catchall phrase for the billions of transactions and other bits of information about their customers, suppliers and operations logged by businesses every day. Yesterday’s data storage problem has become today’s strategic asset.

The large-scale gathering of data from a variety of sources and the application of sophisticated analytical tools to make sense of that data is quickly becoming the new frontier for organisations seeking competitive differentiation. The BPO and outsourcing industry is playing a pivotal role in developing the processes that overcome many of the challenges associated with data analytics.

Organisations in a variety of industries, ranging from finance to retailing to telecommunications, have started to engage in big data strategies. The reasons for engaging analytical methodologies being deployed is driven by the need to leverage data from a variety of sources and channels to achieve an accurate and universal view of the business in real time. Pulling levers is all very well, but pull the wrong one without knowing all the facts and it can lead to disastrous outcomes. After all we don’t know what we don’t know.

Russell Ives states, “Many companies struggle to achieve visibility around the customer experience when interacting with an enterprise across all channels. We are seeing an increased demand for the use of analytic tools inside the outsourced process that are required to deliver improved outcomes for end clients.”

Mr. Ives argues that there has been a shift from the standard suite of business metrics built into service provider service level agreements to more of a focus on business outcomes  “We are being challenged by our clients to collaborate more as a strategic provider to understand how data analytics can identify in what manner end customers want to interact. We can now construct service metrics built around the real customer outcomes the client is seeking to achieve; channel, sales, service, satisfaction.”

Enterprises are generating large amounts of transactional data about their customers from their internal systems and this is growing at an exponential rate. ‘Big data’ is becoming a key basis of competition, underpinning new waves of productivity, growth, innovation, consumer services and competitive advantage. ‘Big data’ offers a range of opportunities for organisations, but there are also some significant challenges.

According to research from McKinsey Global Institute, organisations and their management teams, in every sector, will need to grapple with the implications of big data. Those who ignore it will be left behind.

Through various online activities, most consumers leave an easy-to-follow trail of digital footprints that reveal who they are, what they buy, where they go, and much more. Organisations want this information to be able to gain competitive advantage and be able to offer the most appropriate offer at the most appropriate time. Organisations not only need to put the right talent and technology in place but also the structure, workflows and incentives to optimise the use of big data

“To achieve and sustain superior outcomes on behalf of their clients, as custodians of their client’s brands, providers need to change their frame of reference from supplier to a broader more holistic perspective that encompasses on continuous improvement and focuses on benefits above and beyond cost reduction,” said Mr Ives.

Mr Ives explained that at a practical level, organisations must shift away from simple SLA metrics like average handling time (AHT) to outcome metrics that might include metrics such as sales delivered by a channel. He also noted that organisations in Australia, except for the very large ones, are in the early stages of developing sufficient expertise and knowledge to develop and make sense of data analytics and lack appropriate processes to leverage data from a range of sources.

KPMG and HfS Research reveal findings of new report on outsourcing of finance and accounting operations

Spending on finance and accounting business process outsourcing (F&A BPO) services will surpass $25 billion globally in 2013, and will rise at an annual compound growth rate of eight per cent through 2017, according to new research from U.S. audit, tax and advisory firm KPMG LLP and HfS Research, a leading analyst authority on global business operations strategies.

More than 100 enterprise-level F&A BPO engagements are expected to be signed this year alone, according to the research, which covers 399 major global enterprises and analyzed 745 current enterprise F&A engagements. The research also profiled 17 leading suppliers of F&A BPO services.

The report, “Finance and Accounting BPO Market Landscape, 2013: Market Evaluation, Forecast and Competitive Analysis,” found that key market dynamics fueling global growth include:

• Proven performance: 90 percent of F&A BPO engagements have been consistently meeting their cost-reduction targets and initial delivery performance, making it difficult for finance leaders to avoid evaluating its potential.
• Desire to reduce costs and standardize processes: Enterprises overwhelmingly want to look at new ways to take advantage of lower-cost operations and standardized financial processes, where there is little competitive differentiation to be achieved by operating in house.
• The lethargy of the 2008-10 recession has slowly lifted: More enterprise leaders are now looking at more radical strategies to increase productivity and global business effectiveness.  Recent activity shows an increasing number of enterprises getting more aggressive with globalizing their finance operating models to include outsourcing services.

Ron Walker, a partner with KPMG and the F&A service line leader for KPMG’s Shared Services and Outsourcing Advisory practice, said “F&A BPO needs to be viewed as an extension to an enterprise’s capabilities, not a substitute.  KPMG is helping clients evolve toward a global business services framework that optimizes the mix of human capital, service delivery models, process innovation and technology to deliver services on an enterprise-wide, cross-functional basis to support the business strategy.”

Phil Fersht, CEO of HfS Research and a co-author of the research report, said, “Too many enterprise leaders are approaching F&A BPO with a myopic vision to reduce costs and mitigate risks.  They are kicking the can down the road by failing to invest in better technology platforms, analytics capability and an innovation roadmap.  They should be approaching the F&A BPO as an opportunity to invest in their firms’ futures.”

Click here to request a copy of the report.

The Polish Business Process Outsourcing (BPO) and Shared Service Centre (SSC) industry was worth USD 3.4 billion in 2012 an increase of 20% from the previous year, according to ASPIRE, the (Polish) Association of IT & and Business Process Services Companies. Knowledge process outsourcing (KPO) constitutes about 6% of the Polish BPO market. This is negligible compared to countries like India and the Philippines, where the outsourcing market exceeds USD 10 billion annually. However, Poland has certain unique strengths which attracts investment to this sector:

• Language capabilities: Most professionals have a working knowledge of English, followed by German, French, Spanish, and Italian.
• Near-shore: The geographic proximity to Germany, France, Netherlands, and the United Kingdom (UK), which form a major portion of the client base.
• EU member: Since Poland became a member of the European Union in 2004, companies setting up centers can be assured of safeguarding their Intellectual Property (IP) rights.
• Investment support: Companies which setup outsourcing centers are eligible for cash grants from the EU Structural Funds and incentives under the annual budget, subject to certain criteria.
• Government support: At the national level, government support includes tax incentives to outsourcing firms. At the local level some cities, for instance Lublin, have earmarked special economic zones or parks to foster KPO sub-sectors such as LPO and Healthcare Process Outsourcing.

  These above factors have contributed to the growth of KPO in Poland, albeit little. In 2012, there were about 22 Decision Support & KPO centers in the country. Irevna and McKinsey established KPO centers in Poland in 2009. New KPO entrants in 2012 include Hewlett Packard which opened the largest KPO center in the country, and Capita opened a Legal Process Outsourcing (LPO) center to cater to clients in the UK.

  The Polish KPO industry can continue to grow by adopting measures to increase domain expertise, build a talent pool, and advertise its KPO potential.

• Move up the value chain: Existing outsourcing centers need to add more advanced horizontal processes, such as Analytics, to their service portfolio. These “high-performance” services command a higher price in the market, and build domain expertise in the fastest growing KPO sub-sector at the same time.
• Build relevant skill sets: The diverse KPO sub-sectors, from Analytics to LPO, require workers from different academic disciplines. Universities and colleges need to tailor their curricula so that graduating students are equipped to work in these sectors.
• Better marketing: Poland, and its main BPO association ASPIRE, needs to clarify the differentiator of the country’s KPO sectors from others in countries like India, the Philippines, and China. When speaking at international forums and conferences, highlighting the country’s KPO capabilities is a must.

As destinations get saturated, Poland has a great opportunity to tap into the global KPO market. With its unique strengths, it has the capability to become a leading provider of KPO services, as long as the industry leaders, associations, and stakeholders adopt certain measures.

- Deepti Krishnan, Analyst, Sourcing Practice

By Tam Noda

Posting strong revenue growth in 2012, the IT-BPM the Philippine information technology and business process management (IT-BPM) and global in-house center (GIC) industry is expected to generate US$16 billion in revenues by the end of this year.

This, as new service areas and opportunities emerge in the global outsourcing market, according to the Information Technology and Business Process Association of the Philippines (IBPAP).

Jomari Mercado, incoming president and CEO of IBPAP, said the IT-BPM and GIC industry is serious about maintaining its leadership in an environment in which competing global players are eyeing a larger stake in the expanding outsourcing market.

“Together with our stakeholders and partners, IBPAP will ensure that the Philippines will remain the preferred destination for voice and also for non-voice, complex BPM services,” Mercado said.

Emerging markets will continue to drive global growth, according to a survey of global executives, increasing demand for a wide range of outsourcing sectors.

The McKinsey economic conditions survey published in December 2012 found that “executives broadly believe that demand for their companies’ products or services—as well as their companies’ profits—will increase in the next six months, despite their concern about sluggish global and domestic demand. They also predict that emerging markets will continue to drive global growth.”

As the fastest-growing industry in the Philippines, the IT-BPM and GIC industry is forecast to generate revenues of US$25 billion by 2016, provide direct employment to 1.3 million Filipinos, and support 3.2 million indirect jobs.

Still, the industry continues to explore ways to capitalize on its vast economic potential and to bring the fruits of these opportunities to as many Filipinos as possible.

The industry continues to expand and is on track to achieving the goals in an industry road map. In 2012, for example, health care outsourcing generated US$430 million in revenues, a step closer to its target of US$1 billion for 2016. In the same way, KPO and game development are also expected to post high double-digit growth from 2011 levels of US$2 billion and US$12 million, respectively. Voice BPO likewise posted impressive 21 percent growth in 2012, hitting US$8.6 billion in revenues.

“IBPAP is undertaking necessary efforts to achieve our targets in Road Map 2016. Through this briefing, we hope to establish a more open and interactive discussion with the various stakeholders of the IT-BPM and GIC industry,” Mercado said.

Tam Noda (philstar.com)

From Outsourcing Center, by Patti Putnicki

Business Process Outsourcing (BPO). The concept is relatively simple: instead of hiring employees to handle the necessary but non-core, transaction-based business functions in your company, pass these on to someone else.

But, here’s the thing: BPO is not like dropping off your dirty clothes at the dry cleaner and having them magically transform into fresh-pressed garments the next day. The client has to play an active role to make the engagement successful. However, that doesn’t always happen.

So, what are the most common missteps that cause potentially great BPO relationships to start a downward spiral? We asked our experts to weigh in on the biggest pitfalls – the seven deadly sins of BPO – as well as the best ways to get on the road to redemption.

See the full article below:

http://www.outsourcing-center.com/2013-03-the-seven-deadly-sins-of-bpo-and-how-to-avoid-them-55146.html

By Mark Atterby – Senior Staff Writer

For nearly two decades organisations have used off-shoring as a strategy to reduce costs, mainly through labour arbitrage. ( BPO 1.0) For the most part the pros and cons have been well ventilated. The advantages gleaned from offshoring are becoming harder to obtain due to rising wages in traditional BPO and outsourcing locations (India and The Philippines), serious competition for quality talent, abating English language skills, volatile energy costs, global security concerns, and the worldwide economic crisis. In fact the whole process is now basically commoditised.

Organisations need to plan carefully when deciding to offshore, near-shore or onshore their outsourcing projects.  A variety of factors need to be considered when picking a location that will support and complement their business objectives. Are near shore locations such as New Zealand or Fiji more suited to our language and cultural needs? Or are onshore options such as regional cities (Ballarat or Launceston) or other towns better to ensure compliance to data privacy and security considerations. And if off-shoring, maybe Africa or Mauritius will offer better opportunities to service customers in Europe or the Middle-East, than setting up in say Malaysia?

In the last few years, according to the Everest Group, over 30 countries in Asia, the Pacific and Africa have opened up their economies, with their governments providing incentives and the regulatory framework to attract outsourcing and ICT- BPO investment. In evaluating which shoring option to adopt, organisations need to understand and calculate all the real costs associated with each choice.

A recent webinar held by The Everest Group[i] highlighted how many of the standard metrics and much of the common wisdom used for evaluating locations is flawed or provides an incomplete and accurate picture.

Quite a number off-shored outsourcing and ICT- BPO projects have turned out to be more expensive than anticipated, where time schedules were not met, cooperation proved difficult, cultural differences were amplified and many organisations were dissatisfied with results. The reason for these failures, or limited success, was the one-dimensional nature of the outsourcing procurement decisions made. The decisions were based primarily on cost, driven by labour arbitrage, which failed to account for other factors such as productivity, quality levels, operating risks, manpower availability and cultural and political issues.

The cost benefit analysis to decide which shoring option to adopt needs detailed consideration of all relevant and associated costs. Apart from wages, other factors to consider include the availability of qualified personnel, buffers for Murphy’s Law, client side project management  costs, quality cultural training, productivity issues, and possible wage increases. Many companies who shifted production processes to Eastern Europe underestimated the rate of subsequent pay increases, which in some regions were in the double-digits[ii].

As well as the obvious costs of labour, property, facilities, power and water, telecommunications etc., every country has hidden costs related to the legal, cultural, and infrastructure details that need to be negotiated when setting up operations. Costs in managing resources in a distant location as well as the efforts required in transitioning operations are frequently not fully calculated. After all having to jump on a plane and travel all day to fix a problem is no small thing.

A successful ‘right shoring’ strategy is based on understanding which region or country is best suited to produce a certain product or deliver a certain service as well as all of the costs associated with doing business in that location. And don’t get stuck in the quality versus cost argument. On-shoring doesn’t necessarily mean better quality just as much as offshoring doesn’t necessarily mean less expensive.

By Mark Atterby – Senior Staff Writer

Generally, large BPO and outsourcing contracts come up for renewal every three to five years or so. In today’s tight marketplace, where winning new BPO business is tough, clients understandably try to get better deals when negotiating new contracts. This is fair enough. But many BPO providers in order not to lose staff and to cover overhead costs are accepting deals where there is little or no profit in the relationship with the hope that they can claw back some profit at the back end. In the long-term that disadvantages both parties. There are some companies entering the Australian market from the Philippines offering $8 per hour and $7 from South Africa.

Over the next year or so, across the globe, around $US 85 Billion worth of outsourcing and BPO contracts are coming up for renewal, according to research from the Everest Group.[1] Mainly in the banking, manufacturing and healthcare areas.

Unfortunately many companies rely on a win-lose approach in negotiating contracts. The process is adversarial – each trying to out-do the other. This is mainly driven by the rise and rise of procurement departments. In the current market in Australia, many BPO providers are being severely squeezed to reduce their fees. The challenge is that BPO providers can only be pressed so far. Something has to give; after all you cannot get blood out of a stone!

Research from Vantage partners, shows BPO and outsourcing providers in recent years have been feeling the pressure to demonstrate value to their customers business, and providers are seeing their margins compressed and capabilities pushed to the limit. A number of outsourcing arrangements have been renegotiated, and others fairly hastily, in the midst of considerable stress.

It stands to reason that f the service provider is not making enough profit from their contracts, and then their financial viability is at risk.  After all the reason that they are in business is to make a profit for their shareholders. Moreover in the year 2000 one Australian dollar was worth US$0.55 now it is worth US$1.04, so a deal struck over a period of 3-5 years in A$ would severely disadvantage one party or the other.

In turn the provider will look at cutting costs that will ultimately affect the quality of service expected, reducing the value the relationship brings to the client organisation. The tighter the margins the less investment the service provider will make in technology and the recruitment and development of skilled and motivated staff and the emerging focus on cross cultural training. It does not make commercial sense to run a project at a loss.

The apparent gains the client has made on one hand will be eroded over time and so it becomes a zero sum gain with no winners and a lot of unhappy people on both sides of the fence.

Peter Blatman, Principal, and Deloitte Consulting LLP[2], believes there’s a better approach when renegotiating a contract. Rather than just talk about price, focus more on changes to the service delivery model, where:

1. Suppliers are given an incentive to invest in performance improvements. Put efficiency on the renegotiating table, where both parties have an opportunity to ask what can be done differently to reduce the overall cost of an agreement. Providers will accept cost reductions if they can improve margins through efficiency gains.
2. Shifting the pricing model from an input basis (such as pricing per transaction) to an output basis (such as pricing for overall performance or coverage).

In today’s market awarding or renegotiating BPO contracts on cost is a seriously flawed approach. It is unlikely to achieve lasting cost savings or disruptive innovation, where operational flexibility is compromised. The average BPO contract is around 3-5 years. Yet major technological innovation is happening every 18 – 24 months. Social media and mobility is continuously redefining customer expectations.

BPO and outsourcing contracts where cost savings are the single most important factor will impact the ability and flexibility of the businesses to meet market demands and opportunities. When renegotiating contracts its important to ensure there is scope for flexibility and continuous improvement in the relationship. And make it a relationship that provides value to both parties.

1 http://www.slideshare.net/EverestGroup/preview-deck-impending-contract-renewals#btnNext

2 http://www.deloitte.com/view/en_US/us/Services/consulting/technology-consulting/4eb37662c0d23210VgnVCM100000ba42f00aRCRD.htm

By Martin Conboy

The hard lessons learned by Australian call centres in the last century have not carried across to call centre and BPO environments in Asia.

Staff turnover is a major challenge and no matter which way you dress it up, working in a contact centre environment is not for everyone. There are two types of people that work in a contact centre: one is stress hardy and the other is not.

People who are stress hardy are resilient and are less inclined to leave, whereas people who respond poorly to stress tend to leave as soon as they can. What some owners/managers of offshore BPO contact centres fail to realise is that their most is important assets are people. A new project comes in and they think that they just need to get people on the phones, and by and large anybody will do so long as they can speak reasonable English and navigate their way around a computer program. It never occurs to them that they have some of the brightest minds in their society and they are forcing them to do some of the dullest, soul-destroying most stressful work imaginable. Contrary to popular belief, working in a contact centre is not all that it is cracked up to be. I am not suggesting that all BPO work is like that – it’s just to point out that a young mind needs to be taught how do deal with the stress.

With staff turnover rates running at 40 to 60% that’s a massive cost to the industry when one considers the real cost in terms of replacement, recruitment, training, management time and lost productivity until new agents get up to speed.

For many, working in a BPO environment is a means to an end. On top of the stress is racial abuse. Sadly agents who have called into Australia will have experienced this first hand reducing some to tears. I am not saying that all Australians are racist, far from it, but there is an element in our society who think that they have a right to have a crack at overseas agents who are only doing their job. Abuse causes stress and stress drives staff turnover. It’s no wonder that so many resign from the industry.

John Winney blogged on The Sauce website, “So many BPO operators (and some internal centres), see the symptoms of the problems, and seem to think that a productivity/adherence crackdown of some sort is the answer, rather than looking outside of that box and examining the myriad of other contributing factors such as environment, technology, individual personalities and even call demand itself, that all make up the dynamics of a Contact Centre operation.”

He goes on to say, “We need to remind industry management that Call centre agents are as intelligent as they are precious, and that they are being asked to perform one of the most stressful jobs available, in that they are required to be physically tethered to their workspace (even by wireless headset) and then be subjected to having every movement they make measured and monitored.”

Of course a lot of this staff turnover could be addressed by selecting people who are suitable for the industry in the first place rather than the catch as catch can approach by many BPO service providers.

You can have brilliant technology and terrible people and you will not have a good call centre, where as you can have good people and poor technology and your business will survive. It’s a people business; it’s all about people talking with people. Sounds simple; however, it’s amazing how this message gets lost on some.

One of the areas that have been neglected is soft skills training specifically around cross-cultural training. The obvious inference is that if you teach contact centre agents how to better relate to Australians, on a one on one basis the actual job becomes a lot more fun and consequently less stressful.

FooBooonLine.com has developed such a course. They have taken a different approach and produced an outcomes-based programme that is developed and delivered by a teacher as opposed to a trainer whose approach is fundamentally different. The Course is called FACCT (FooBoo Australian Cross Cultural Training) and was developed by Mary Lockley, a tertiary qualified education course designer.

FACCT has been designed for BPO service Providers, who provide Asian based contact centre & back office agent support services, into Australia and at the back of our minds was the notion that agents have to be productive when their initial training is completed. It addresses agents’ soft skills as a function of increasing a BPO Service Providers Net Promoter Score (NPS)

FACCT programme Director Ms. Lockley said, “The teacher has the skills and techniques that not only can impart information to the learner but that more importantly the learner will be able to retain the information.  A trainer will deliver a course but has not been trained themselves in the art of teaching and to know and understand all of the factors that contribute to a learner retaining information.”

She went on to say, “A trainer is someone who provides instruction on a skill or behaviour. For example: a trainer will provide instruction to people about how to use new software or a product range. Another trainer may train people on the correct procedure for handing a complaint. . In other words training is about modifying behaviour.”

“Moreover ‘Teaching’ goes beyond training. Teaching involves understanding the concepts behind the instruction. Teaching asks “Why?” The learner in a teaching environment should be able to make new connections with the material, make assumptions about new situations, and synthesise solutions to problems related to the course material. Someone needs to be  ’taught’ how to interact with Australians — not just trained in Australian idiomatic expressions. In other words teaching is about getting learners to think. That’s the way that adults like to learn.”

In contrast ‘rote’ learning is a memorisation technique based on repetition. The idea is that one will be able to quickly recall the meaning of the material the more one repeats it. It certainly helped me enormously as a adult to know my times table, which was drilled into me as a child, so rote learning has its place, however it is a technique that is best practiced with children.

The FACCT programme is completely Australian. It is not bits of American or British CCT courses. After all Australians are different and unique. The course is a blended combination of face-to-face (Observational) and practical (Experiential) learning and online delivery via a student individualised platform. The course has 6 modules and a culture competent.

Ms. Lockley explained that the course is completely flexible, in that it can be delivered all at once or broken up and interwoven with onboarding and induction customer service and product training.

For existing agents it may be best delivered all at once in a short burst – after all it’s not good to have them off the phones for too long. For new hires it may be best delivered as a part of their induction or on-boarding program and augmented by elements of existing CCT programs – that may stretch out to two weeks of elapsed time over the course of their 7-week induction program. For ‘near’ hires that were close to employment except that they do not have business grade English a different strategy may have to be applied i.e. their course could be supplemented with a program like www.englishlink.com. 

Global IT-BPO leaders share their perspectives in the Chairman’s Panel during the 4th International Outsourcing Summit held October 7-9, 2012 in Manila, Philippines.

Photo shows (from left): Alfredo Ayala, chairman of the Business Processing Association of the Philippines; Som Mittal, president of NASSCOM; Augusto Castellanos, director of Proexport Colombia in India; Hoang Nam Tien, chairman of FPT; Huw Watkins, managing consultant of PA Consulting; and Dennis Wright, president and CEO of Peregrine Development International.

Global leaders in the IT-BPO industry gathered in Manila to share their perspectives on and strategic directions for the industry’s next frontier during the fourth International Outsourcing Summit (IOS) held October 7-9, 2012 at the Makati Shangri-La. Over 570 delegates from 17 top and emerging outsourcing markets and investment destinations participated in the Summit.

The Summit was organized by the Business Processing Association of the Philippines (BPAP), the umbrella association for the information technology and business process outsourcing (IT-BPO) and Global In-House Center (GIC) industry in the country.

Industry representatives from Australia, Bangladesh, Belgium, China, Colombia, Denmark, Greece, India, Japan, Malaysia, Netherlands, Philippines, Singapore, Taiwan, United Kingdom, United States, and Vietnam joined a series of discussions on strategies for growth and diversification, talent supply, hyperspecialization, competition and customer retention, among others. Breakout session topics included branding and talent marketing, new technologies, healthcare outsourcing, cost and innovation, and the software industry.

Som Mittal, president of NASSCOM and one of the top global leaders to speak in IOS, expressed optimism for the industry’s accomplishments and its next frontier. “Outsourcing models are changing—driven by new technologies, reinvented business models, new buyer segments and solutions around emerging markets. Therefore, today’s world can be as the called ‘golden age of outsourcing’,” Mittal said. “This goes as maturity of the outsourcing market and increased capabilities of industry players have led to rapid change in expectations from clients and as a result roles and goals of service providers today have changed.”

President Benigno S. Aquino III delivered the keynote address and formally closed the conference. “The competitive advantage of the Filipino is increasingly becoming clearer to the world. In fact, according to a study published in April of this year, the Philippines was ranked the world’s best country in business English, and I was amazed at this,” said Aquino. “The IT-BPO industry has been capitalizing on these qualities, and they have done that while offering opportunities in-country, rather than out of our country—keeping our talent here, and arresting the social costs of working abroad,” the President said.

“The Philippine IT-BPO industry is making good progress towards achieving the stretch goals of Road Map 2016,” said Alfredo Ayala, BPAP chairman and president and CEO of LiveIt Investments Ltd.. “We aim to become the world’s number one destination not just for call centers but other select non-voice segments of IT-BPO, generate a total of 4.5 million direct and indirect jobs, and achieve cumulative revenues of US$96 billion for 2012‒2016,” Ayala said.

BPAP expects to generate US$13.4 billion in revenues and 772,000 full-time employees (FTEs) in 2012. These figures are seen to increase in 2013 to $16 billion and 926,000 FTEs, respectively.

Ayala noted that IT outsourcing grew by 37% in 2011, while healthcare information management posted an impressive 172% revenue growth over 2010 revenues. “We also saw growth in value-added sectors like game development, engineering, and complex back office services.”

Since the last global Summit, emerging global services delivery centers in Asia, Africa, Central and South America, and Eastern Europe “continue the race to leverage demand for specialization and influence best practice in specific knowledge domains,” according to Ayala.

According to research and consultancy firm Everest Group, the global offshore services market is growing at a healthy pace, and will more than double by 2016 to US$250 billion. Gartner reports that by 2016, the Asia-Pacific market for business process outsourcing (BPO)—excluding Japan—will reach US$9.5 billion.

By Martin Conboy

There is no doubt that the Malaysian tourism sector has benefited massively from the brilliant tourism campaign “Malaysian – Truly Asian”. Sometimes the brilliance of an advertising campaign is its inherent simplicity as the entire tourism sector has united behind the marketing message.

On the other hand the ICT- BPO sector has struggled to coalesce behind a single united branding message that the sector can rally behind.

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister Najib, Malaysia is attempting to grow its economy by attracting investments in Islamic finance, high technology industries, biotechnology, and ICT-BPO services. The population is 28 million of which 12 million make up the countries workforce.

As a former British colony it’s hard not to see the British colonial influence, which is mixed with a fusion of Islamic modernism. The mix is spectacular and impressive and a credit to the vision of the country’s leadership. Moreover, with its multicultural mix of Indian Chinese and native Malays, the country is able to boast a peaceful and harmonious existence.

During the 22-year term of Prime Minister Mahathir, Malaysia was successful in diversifying its economy from dependence on exports of raw materials to the development of manufacturing, services, and tourism. The current government has continued these pro-business policies.

As an oil and gas exporter, Malaysia has profited from higher world energy prices, the oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia’s exposure to riskier financial instruments and the global financial crisis.

In order to attract increased investment, the current government has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

According to The Malaysian Minister of Human Resources Dr. S. Subramaniam the ICT-BPO sector is growing at 8% per annum and is the second fastest sector in the economy. There are about 200 foreign owned companies and sixty local companies in the sector. The country boasts over 200 contact centres.

Looking specifically at the BPO sector according to ValueNotes an Indian based BPO analyst firm about 15 percent are captives in the Shared Services space and of the balance only about 20% are servicing the international market. The sector is skewed towards the ITO sector with about half of the businesses represented in that area and 35 per cent in pure BPO. The sector is seriously under weight in KPO service offerings with less than 5 per cent of companies offering KPO services. Moreover it has not leveraged its tech savvy Gen Y population and looked to position itself and a get a slice of the fast growing social media BPO segment.

Malaysia has one great asset that no other Asian country shares and that is its multi cultural population. Its fortuitous geographic position combined with its multi cultural makeup has put it in a position to exploit its assets by positioning its self as a connection into Asia. It makes sense when one thinks about European and US companies looking to get a toe hold in China and the expanding SE Asian economies as the economics of the world shift progressively eastwards.

I see the ICT –BPO sector coming together under a marketing slogan like “ Malaysia – Your Asian Connection”

Clearly Malaysia needs to look at collaboration with other countries specifically around language skills and that brings into play the fast growing South American players and niche players like Mauritius. More over Malaysia is constrained in that it cannot scale its BPO business quickly and will need to consider sharing BPO opportunities with other economies if it wants play on the world stage.