By Raffy Ayeng

The Philippines Department of Finance and the Asian Development Bank (ADB) recently signed a memorandum of understanding (MOU) to set up “Knowledge Hubs” in chosen colleges and universities nationwide in order to support the continued growth of the information technology-business process outsourcing (IT-BPO) industry in the country.

The MoU, which provides technical assistance worth $650,000 to the IT-BPO sector, was signed by Finance Secretary Cesar Purisima and the ADB Board of Governors, on the sidelines of the 45th ADB Annual Meeting of the Board of Governors in Manila.

“IT-BPO is the fastest-growing employment and one of the highest revenue generating sectors in the country. In 2010, the country surpassed India in terms of voice related outsourced work to become the global leader in this area. The industry is now moving up the value chain from voice-based services [call centers] toward knowledge-based activities,” the MOU stated.

It further states that an educated workforce equipped with skills that meet the demands of high-growth industries would be needed to improve national competitiveness, move into knowledge-based services, and achieve and maintain rapid economic progress.

The three-year program aims to align the curriculum of higher education institutions with the needs of the IT-BPO sector through “a replicable and sustainable model of ICT-enabled knowledge hub for improved teaching and learning of IT-BPO industry-based curriculum in HEIs.”

A total of $500,000 will be sourced from the Republic of Korea e-Asia and Knowledge Partnership Fund by the ADB, while the Philippine government will provide the remaining $150,000 “in kind contributions.”

At least three hubs will be established in the country with one each in Luzon, Visayas and Mindanao, the MoU stated. All hubs will be ICT-enabled and provide “online training” to teachers and “digitized learning modules and study guides” for students.

The MoU said that at least 900 faculty members and 3,000 college-level students, of which at least 50 percent are females, will benefit from the program.

A steering committee chaired by the Finance department with members from the Commission on Higher Education, National Economic and Development Authority, the Business Processing Association of the Philippines and other government agencies, will also be established to oversee the agreement’s implementation.
The government aims to make IT-BPO a $25-billion industry by 2016.

Source: Chicago Tribune

Over the last five years, Mauritius has embraced some bold economic reforms that have positioned the country among the most open, competitive and lowest tax economies in the world. Capitalizing on its strategic location and relying on its sound domestic economic base, Mauritius is increasingly being viewed as a global business platform for many international players in the ICT/BPO industry.

The outsourcing industry has witnessed significant transformation over the last 5 years.
Starting with basic data entry tasks, the industry graduated to a high proportion of voice-based services and a range of back-office processing activities. The last 3-4 years have seen the scope of services expanding to include increasingly complex processes involving rule-based decision making and even research services requiring informed individual judgment.

Today, the sector faces a unique opportunity to enhance its role as a high value added service provider and capitalize on the expanding BPO landscape. The country is gradually being recognized as a centre of excellence in the areas of finance, accounting and IT services. With the onset of the LPO phenomenon, Mauritius is positioning itself as a credible destination for offshored legal works. According to Research and Markets, the global legal process outsourcing (LPO) market was worth $400m in 2010 and is expected to be worth $2.4bn by 2012 with the US accounting for more than two-thirds of the market.

What Makes Mauritius an attractive destination for LPO?

Mauritius benefits from one major unique selling point which is its hybrid legal system of French and British law. This is a result of the two consecutive colonisations of the country. The Mauritian legal education system has its roots both in UK and France hence the familiarity of local lawyers with both countries’ legal framework. This gives the Mauritian LPO industry a competitive edge against other similar players in the African region.

Mauritius has a proven track record of political stability and has developed a pro-business environment. Outsourcing of services has been possible only because of the tremendous advancements in telecommunication technology over the years. Mauritius has a strong IT infrastructure and support. This technological supports forms the backbone of this booming outsourcing industry. Moreover, the country has also promulgated its Data Protection Act and is working with the European Union for the “Adequacy Finding” thus ensuring the safe transfer of sensitive and personal data.

The LPO industry in Mauritius is poised for future development. While India and Philippines have proved their mettle and are recognized as mature centres, Mauritius can be used as a complementary destination targeting both English and French speaking markets.

By Melvin G. Calimag

Summary
Still opportunities for employment elsewhere such as Middle East or Singapore, but IT professionals seeking overseas jobs shouldn’t rush into one simply to get out of the country.

According to Yoda Buyco, marketing director of regional job portal Jobstreet.com, IT and engineering are still the top jobs available in the Philippines and Asean region. In fact, he said the four key areas of IT–hardware, software, networking, and administration–continue to rack up the most number of job postings registered on the site.

“All the sub-sectors and specializations of IT and engineering, most especially electronics, are all in demand,” Buyco said in an interview. “The next highest are customer service jobs from the BPO (business process outsourcing) market.”

The Jobstreet executive said IT professionals are highly mobile–literally and figuratively–noting that the attrition rate among IT workers is particularly high because of huge demand overseas. While the Middle East, specifically Saudi Arabia and the United Arab Emirates, is the top destination for Filipino overseas workers in general, Buyco said IT professionals usually go or are deployed to Singapore.

“We haven’t seen a clear pattern yet for Filipino IT workers going into growing markets such as China and India, probably because these countries have their own set of IT professionals,” she said.

Singapore, being the regional hub of most IT companies, serves as the de facto destination for most Filipino IT professionals, even for those who perform non-technical roles.

Carlo Subido, business development manager of Intel Philippines, pointed out that relocating abroad is always a possibility, especially when one is working for a multinational corporation. “Although some regional roles can be handled in the Philippines, there are some roles that require you to move to Singapore because that is where our Southeast Asia headquarters is located,” he said.

Roland Ong, unified communications and collaboration technologies head at Cisco Systems Asia-Pacific, agrees that Singapore–with Hong Kong coming in a close second–is indeed the top place for IT workers like him.

“But, with the IT tools we have now, location doesn’t matter anymore. We can collaborate anytime and anywhere with IT,” said Ong, who is based in Manila.

However, if and when an IT worker decides to try his luck outside the country, Buyco said it is important not to rush and grab that coveted overseas job. Unlike novice overseas workers whose main goal is to get out of the country, experienced professionals are more selective and cautious before taking up a job, she said.

She advised IT professionals looking to work abroad to carefully examine the job description and determine if it fits his objectives and qualifications.

“Sometimes, IT workers get employed in a hardware-related role when, in fact, they wanted a software-related job. That would result in low productivity and job dissatisfaction,” she said.

Buyco also recommended IT workers research their prospective employers and work environment before making the decision.

She added that there should be a support group, which usually comes in the form of a Filipino community, that can provide the emotional and psychological support needed for workers toiling in a foreign land.

Source: ZDNet Asia

In Australia 45% of major companies see the cloud as a significant influencer to outsource
Aust. BPO report 2012 – Editor

The inaugural Cloud Summit East Africa, proudly supported by the Kenya ICT Board, will be held in Nairobi from 5 to 6 June 2012. The strategic 2-day invitation-only event is hosted by international business-to-business conferencing company, Kinetic Events.

The event is aimed at IT professionals, senior decision makers and cloud computing experts from top companies in East Africa with a focus on how cloud computing is reforming the African IT market place. As a cost effective solution for businesses to acquire and use, the event will explore debatable issues currently associated with the global cloud initiative.

International investors have played a major role in boosting the African IT industry. By tagging along on Africa’s major broadband initiatives, investors can establish clouds that are strategically located in major cities across Africa.

In recent research; South Africa is considered fairly mature in cloud development, with total IT spending expected to reach an estimated $12bn (US) by the end of 2012.

Cloud computing trends will have a major impact on IT industries globally as an effective means to collaborate with peers internationally and offers longevity to information stored in the cloud.

Shannon Mackrill, Joint Managing Director of Kinetic Events says, “Cloud computing is rapidly changing the African IT industry and the way companies do business. The move from capital spending to operational spending, will offer an affordable way to access services globally.”

Undersea fibre optic cables have been implemented in recent years, resulting in the cost of broadband decreasing. African entrepreneurs are taking full advantage of this development by providing superior applications and services that were seemingly impossible to consider only 5 years ago.

With a global focus on computing, security and continuously evolving technologies, Africa has been placed in the middle of a global IT revolution. The summit will place the spotlight on cloud computing in Africa as one of the key global emerging markets for cloud services.

For more information, comment or photographs, visit www.cloud-eastafrica.com or contact Shaunei Meintjes on +27 21 555 0866 or shaunei@kineticevents.net. Follow @ITLeadersAfrica and @KineticEventsSA on Twitter for daily updates and news feeds.

1Q / 12 Global TPI Index shows ‘hangover effect’ following two robust quarters –Restructurings up 82 percent, account for increasing share of market

Information Services Group (ISG a technology insights, market intelligence and advisory services company, released TPI Index data showing that the value and number of outsourcing contracts awarded globally dropped during the first three months of the year in a familiar pattern of market cooling following two robust quarters in a row.

The 1Q / 12 Global TPI Index, which covers commercial outsourcing contracts valued at $25 million or more, measured total contract value (TCV) of $18.7 billion, a decline of 22 percent from the same quarter a year ago and 35 percent from the previous quarter. The 184 contract awards during the first quarter represented a drop of 31 percent year-over-year and 18 percent sequentially.

A key factor affecting the market’s first-quarter performance was the presence of only one mega-deal, defined as a contract with TCV of $1 billion or more. However, the market awarded seven mega-relationships, contracts with average annual TCV of at least $100 million. Furthermore, TCV from restructurings, which accounted for most of the mega-relationships, rose 82 percent year-over-year.

The weak first quarter comes on the heels of a record second half for the outsourcing market. In the last six months of 2011, global TCV rose 29 percent year-over-year to a record $55.8 billion.

“This first-quarter slowdown follows the strongest half for outsourcing in a decade, making for difficult comparisons,” said John Keppel, Partner & President, Research and Managed Services, ISG. “We saw this same hangover effect in early 2010 as well as in early 2006. So there is historical precedent for the industry taking a breather after two robust periods.”

The TPI Index, presented by ISG, provides a quarterly snapshot of the sourcing industry for clients, service providers, analysts and the media. Now in its 38th consecutive quarter, it is the industry’s authoritative source for marketplace intelligence related to outsourcing transaction structures and terms, industry adoption, geographic prevalence and service provider metrics.

The 1Q12 Global TPI Index showed first-quarter declines in both IT outsourcing (ITO) and business process outsourcing (BPO). With weakness in all functional areas, ITO TCV fell 20 percent year-over-year and 37 percent sequentially. In BPO, TCV dropped 27 percent year-over-year and 30 percent sequentially despite an uptick in activity in Finance & Accounting, Contact Centers and Procurement.

By region, the Americas turned in the best quarterly performance. Bolstered by the global market’s lone mega-deal, Americas TCV during the quarter was flat year-over-year and up 8 percent sequentially. Europe, the Middle East & Africa (EMEA) slowed significantly, due in part to uncertainty stemming from fiscal concerns in the Eurozone. First-quarter TCV in EMEA fell 32 percent year-over-year and 53 percent sequentially. Asia Pacific TCV fell 36 percent year-over-year and 33 percent sequentially.

An ISG analysis of historic market data found the number of outsourcing transactions has increased dramatically over time even as the average duration of contracts has declined. As a result, contract expirations are now occurring at twice the rate they did five years ago, and they now account for a larger share of TCV awarded in every region of the world. TPI Index data show a record 570 outsourcing contracts worth at least $25 million were scheduled to expire in 2011, and record contract expirations are expected again this year.

ISG anticipates the number of contracts restructured will rise 20 percent in 2012, the third time in four years it has grown at that pace, while the value of restructured contracts should rise 10 percent.

Said Keppel: “Looking ahead, we foresee a soft first half and a reviving second half to 2012, mainly because of the impact of an anticipated upswing in restructuring performance in the second half of this year.”

ISG will discuss the 1Q12 Global TPI Index during a conference call for media and analysts today at 11:00 a.m. Eastern. For more information, including dial-in instructions, audio replays and presentation slides, please visit http://www.isg-one.com/web/research-insights/tpi-index/ .

About Information Services Group

SOURCE Information Services Group (ISG)

Copyright (C) 2012 PR Newswire. All rights reserved

By Mia E. Abellana

AS Cebu aims to sustain its ranking in the top 10 of Tholons’ list of emerged cities for outsourcing, its promoters are working to meet the demand for talent from companies seeking to outsource operations in Cebu.

Cebu Investment Promotions Center (CIPC) managing director Joel Mari Yu said that Tholons recommends that Cebu develop its talent supply pipeline to sustain the growth of the IT-BPO sector.

The average number of graduates in Cebu for the last three years was 22,757. Accounting graduates make up 2.4 percent, while business graduates make up 19.4 percent. Medical course graduates account for 12.9 percent, IT graduates for 16.9 percent and engineering for 11.7 percent.

Other graduates make up 36.6 percent, which Yu said can be a good source for BPO jobs handling voice operations.

College graduates
For the last three years, the average number of college graduates for the three regions in the Visayas was 79,256.
Yu noted that Cebu City’s outsourcing revenues reached an estimated $1.25 billion in 2011, with 126 locators and 65,000 employees in the sector alone.

From just four companies doing software development and CAD in 2000, more than 100 companies have been operating in Cebu as of 2011 doing business, knowledge process and information technology outsourcing, posting an average growth rate of 240 percent.

And from just 1,200 employees in 2000, the sector now employs 65,000, growing at an average of 484 percent. Currently, BPO holds 72 percent of the industry’s employees while ITO and KPO share 14.5 and 13.5 percent, respectively.

The top five biggest call centers in Cebu, which were ranked by CIPC according to the number of employees, employ 17,700. Convergys, which landed the top spot, reportedly wants to employ 8,000 by the end of this year, Yu said.

Aside from making sure there is a steady stream of qualified employees, Tholons also recommended that Cebu maximize its BPO segment and its capabilities and develop KPO (knowledge process outsourcing) segment and capabilities.

KPO refers to services such as research and development, financial and insurance research, paralegal content, medical content, biotechnology and pharmaceuticals.

Yu showed that Cebu is home to several outsourcing companies offering KPO services and they are not just American companies. The list of foreign direct investments in non-voice IT operations number 38. Aside from American companies, the list also includes those based in Japan, Australia, Singapore, Canada, Great Britain, India and Germany.

Tasks
These companies handle research and development, engineering design, content development, animation and graphics, data conversion, software development, medical transcription, legal and accounting, credit checks, Internet shopping, hardware support, web development, back office support and finance.

Since most of the voice operations are from American companies, Yu admitted this segment of the IT-BPO sector could suffer the most if the United States pushes through with moves to curtail outsourcing.

But with such companies in KPO, Yu said it would be best to push hard in the non-voice field.

Published in the Sun.Star Cebu newspaper on April 09, 2012.

Mauritius has long been branded as a tourist destination but it is an undeniable fact that the island offers more than just scenic views and sandy beaches.

Since independence in 1968, Mauritius has developed from a low-income, agriculturally based economy to a middle-income diversified economy with growing industrial, financial, and tourist sectors. For most of the period, annual growth has been in the order of 5% to 6%. This remarkable achievement has been reflected in more equitable income distribution, increased life expectancy, lowered infant mortality, and a much-improved infrastructure. The economy rests on sugar, tourism, textiles and apparel, and financial services, and is expanding into fish processing, information and communications technology, and hospitality and property development. Sugarcane is grown on about 90% of the cultivated land area and accounts for 15% of export earnings. The government’s development strategy centers on creating vertical and horizontal clusters of development in these sectors. Mauritius has attracted more than 32,000 offshore entities, many aimed at commerce in India, South Africa, and China. Investment in the banking sector alone has reached over $1 billion. Mauritius, with its strong textile sector, has been well poised to take advantage of the Africa Growth and Opportunity Act (AGOA). Mauritius’ sound economic policies and prudent banking practices helped to mitigate negative effects from the global financial crisis in 2008-09. GDP grew more than 4% per year in 2010-11, and the country continues to expand its trade and investment outreach around the globe.

What we never thought is actually being carried out in Mauritius. The ICT/BPO industry has allowed the country to pull itself into the mainstream of its economic development. Today the country is recognized as one of the 30 top outsourcing locations as per Gartner in its “Globally Sourced Activities report 2010” and as one of the most cost competitive locations for the delivery of offshore services by Everest Consulting.

The ICT/BPO sector has grown from a nascent industry into one of the country’s leading sources of employment and major contributor to GDP.

The industry has distinctive strengths in finance and accounting as well as IT Application Development and Maintenance (ADM) support. The success of Mauritius in the ICT/BPO field has been attributed to the right eco-system in place in terms of political, social and economic stability, state-of-the-art physical and telecommunications infrastructure, convenient time zone and not to forget quality of its manpower.

Moreover, two parameters were important in placing Mauritius on the outsourcing world map: namely cost-competitiveness and quality of delivery. These key success factors coupled with a conductive business climate gave Mauritius its competitive edge on the global scene and have encouraged a number of multinationals among which Orange, Accenture, Infosys, HTMT, Ceridian, Huawei and CSS Corp to use Mauritius as part of their global delivery model.

With the huge number of opportunities unfolding in Africa, the Mauritian ICT/BPO industry is set to play a pivotal role in facilitating those investments and serve as an ideal platform.

Mauritius has already developed mature BPO offerings and the market is now shifting to the lucrative, high-end Knowledge Process Outsourcing (KPO) service offerings in line with the global trend. The country is also being promoted as a risk diversification location for India and other Asian countries.

For more information, please contact
Mrs Shamima Mallam- Hassam
Director, International Business Services
Board of Investment
Email: ict@investmauritius.com
Website: www.investmauritius.com

By Iain Thomson

The offshoring of IT work to developing nations has been very popular with accountants looking to cut costs, but the limits are being reached of what jobs can conceivably be sent overseas.

Research by The Hackett Group estimates that of the 8.2 million business service jobs available in the US and Europe in 2002, only around 4.5 million will remain by 2016, with the rest moving to India, China, and other global outsourcing centers.

But the limit will then have been reached, with barely a million left that could realistically be moved offshore, and companies that would do so would face “a PR nightmare” and risk losing staff who don’t trust their employers. This would mean an end to the cost savings for Western businesses, and would leave those hosting countries in a bind, since they will have to find new targets if they are to maintain current growth rates.

“In the US and Europe, offshoring of business had a significant negative impact on the jobs outlook for nearly a decade,” said The Hackett Group chief research officer Michel Janssen. “That trend is going to continue to hit us hard in the short-term. But after the offshoring spike driven by the Great Recession in 2009, the well is clearly beginning to dry up. A decade from now the landscape will have fundamentally changed, and the flow of business services jobs to India and other low-cost countries will have ceased.”

The IT profession has been hardest hit by the offshoring of service jobs, and will see a 54 per cent drop in employment between 2002 and 2016. Finance employment will fall 42 per cent, procurement jobs by 36 per cent, and human resource jobs will shrink by nearly a third as part of the drive to lower costs through offshoring and automation.

India remains the top spot for outsourcing, taking about 40 per cent of jobs, thanks in part to having an educated and largely English-speaking population. Eastern Europe has around 20 per cent of the market, but faces rising costs, and China is the destination for around 13 per cent of service jobs.®

Source:The Register