In Photo: Ken Poonoosamy, Manaaging Director of Board of Investment (BOI)

By Simon Vella

Mauritius aspires to position itself as the true BPO gateway to Africa thanks to its strategic location in the middle of Indian Ocean, says Ken Poonoosamy – the Managing Director of the Board of Investment (BOI), which is the apex investment promotion agency in Mauritius.

Today, the island nation, one of the world’s top tropical island holiday destinations, is a stable and vibrant platform for corporations interested to explore business prospects in Africa.

Poonoosamy says that the country is taking a wholesome approach to the global services game by ensuring a good ICT ecosystem. He says: “We are not only looking at attracting big names in the Shared Services segment – we are also promoting and assisting our own local providers to expand into Africa and to provide BPO services.

We already have a number of service providers who have created a solid reputation locally and are making good strides to have a presence in Africa and tap into a large market there.” Africa with its 1 .2 billion people is considered by many as the last frontier.

For the outsiders, the tourism industry is seen to be the poster child for the economic progress of Mauritius over the years. According to Statistics Mauritius, the total passenger arrival to Mauritius in 2011 was 1.3 Million and tourist arrivals for the year at nearly 1 million. According the Bank of Mauritius the gross tourism receipts was Rs4.4 billion in 2012. The forecast number of tourist arrival for 2013 is one million.

Interestingly, in the actual sum of things – it is the manufacturing sector (such as textile, seafood processing) that has contributed a staggering 17% of its national GDP in 2012. The financial services sector accounts for about 10%, and the tourism sector accounts for about 8%.

The ICT BPO sector is already hitting 6.8%. Just five years ago, it was just a measly 2%. The growth of the sector has been dramatic and on average Mauritius has registered 15% growth in the BPO industry annually in the past few years.

Poonosamy says: “Tourism and manufacturing sectors are important sectors but we are looking at the bigger picture. Furthermore, the tourism and sector presents tremendous BPO opportunity with regards to work revolving hotel reservation, bookings and other hospitality related segments.”

The key lesson is that the nation has divested its economy from dependence on one source of income, through diversification into various sectors, and established a concerted strategy to create productive capacities amongst the citizenry that can sustain the onslaught of globalization. These astute decisions spearheaded by the government invest and nurture numerous forward-looking business pillars, most particularly the ICT industry are beginning to pay off.

The multi-lingual population (who speak English, French and other regional languages) has proven its ability to serve multiple markets seamlessly.

Supported by robust economic policies, structural efficiencies and the highest readiness in the region toward regulatory environments, transparency, accountability and governance – Mauritius has earned the unwavering trust of client organisations from developed markets.

Its leadership toward adoption and propagation of the value of forward-looking policies and enabling environments is considered an asset by many nations from the African continent who look up to Mauritius for guidance and advice. Mauritius just announced that it is investing US$3.4 billion in Zimbabwe.  The nation itself is keen on transforming not just its own ICT-BPO sector, but in becoming the Regional Hub for access to Africa.

“We have put in place solid infrastructure to sustain our ambitions. Many global corporations have trusted Mauritius as a location and have set up a base here. From a strategic standpoint, we have made concerted investments in bandwidth (8 local loops) that connect us with the African sub-continent, Europe, and Asia, making us one of the most highly networked countries in the region. Tactically, trust vested in the nation is reflected in the commitments from large organizations like France Telecom and Deutsche Bank, who are leveraging their shared service centers in Mauritius to expand and consolidate their African footprint.”

“They are tapping into our solid infrastructure, telecom, language capabilities, educated workforce and a transparent regulatory environment – besides of course the ease of doing business in the country.”

“This is a testament to our progress in the ICT industry within such a short span of time of five years. We are also 19th globally and 1^st in Africa in terms of ease of doing business, according to a recent study by World Bank.”

Going forward, and thinking ICT in the larger context, Mauritius is already spearheading a national plan for reducing carbon footprint and becoming ecologically sustainable through emphasis on utilizing renewable sources for energy.

Mr. Poonosamy went on to say, “In retrospect, it is interesting to muse about the dismissals the nation encountered right after our independence in 1968, when the term ‘basket case’ was used to describe Mauritius. The growth of the economy during the 1960’s was also slow and uneven – it averaged less than 1% per annum.”

The sugar sector was still the principal economic force, accounting for nearly all the export earnings and for 53,310 jobs out of a total employment of 138,170 in 1967.

Poonoosamy said: “Today we have GDP per capita of US$9000. We have a growing middle and elite class in Mauritius. We have a high literacy rate and mobile penetration currently stands at 110% of the population. The internet is also made available island-wide. We have fiber optic cable that connects us globally with international gateway capacity.”

There is no doubt that the island paradise has indeed come a long way and is ready to take its place as an equal with more established BPO destinations.

The National Information Technology Authority (NITA) has graduated twelve Ugandans as trainers to teach fellow Ugandans business process outsourcing skills in order to create jobs.

Currently, the common BPO services in Uganda include management of call centres, branding, website marketing, telemarketing, payroll management, customer care, sales and advertising. The training, which was facilitated by the Egyptian Ministry of Communications and Information Technology, is part of the ICT capacity building programme between Uganda and Egypt to lower the cost of training locals in the sector.

While passing out the graduates last week, former Information Communication Technology Minister Ruhakana Rugunda said the training is government’s strategy to prepare 3,000 jobless youth for the sector.

“Government has identified ICT as a core strategy for enhancing public service delivery. BPO business is very competitive and companies that provide these services need to adhere strictly to the set standards as well as operating procedures,” Dr Rugunda said.

Currently NITA is conducting the training in conjunction with the Uganda Institute of Communications Technology with support from Techno Brain one of the leading BPO service providers in the United States of America.

According to Dr James Saaka the Executive Director NITA, BPO is a new form of labour, which is among the fastest-growing service in Europe and Asia.

He observed that with Uganda’s large unemployed computer literate youth, the country is destined to become a leading BPO destination in the East African Community, where currently China and India dominate the business because of the cheap labour.

BPO is largely aided with the availability of cheap internet, which Mr. Saaka say will soon be fixed.

sotage@ug.nationmedia.com

By Josh Taylor

Summary: Foreign IT workers were not the focus of a discussion paper that led to the Australian government criticising the 457-visa program.

The Australian government has recently been critical of what it calls overuse of the 457 visa program to recruit foreign workers into Australia, in particular IT workers, but the discussion paper that spawned the debate doesn’t mention IT workers at all.

In March, Prime Minster Julia Gillard said the use of the visa to temporarily employ overseas workers was growing much faster than employment in Australia, with over 100,000 workers in Australia now on 457 visas. She said the IT industry was one of the bigger offenders in hiring 457 visa workers.

“It is just not acceptable that information technology jobs, the quintessential jobs of the future, the very opportunities being created by the digital economy, precisely where the big picture is for our kids, should be such a big area of imported skills.”

As a result, the government is planning on introducing legislative changes to the program in the upcoming sitting of parliament ahead of the federal election in September.

The proposal spawned from a confidential discussion paper prepared in December 2012 by the Department of Immigration and Citizenship for the Ministerial Advisory Council on Skilled Migration on the integrity of the 457-visa program. The paper, which was released under Freedom of Information laws, states that it is time to evaluate the integrity of the program, and while it highlights 12 measures to improve the system, it does not implicate any one particular industry as abusing the system.

Immigration Minister Brendan O’Connor has said that it was not the only information the government was working from.

This paper is one of several important pieces of information that have been used to formulate the Gillard Government’s ongoing reforms to the 457 program. It is not, however, the sole determinant of the government’s decisions,” he said.

O’Connor was also today forced to defend comments he had made earlier in the week, stating that 10 per cent of people on 457 visas were rorting the system. He told ABC radio this morning that it was an estimate rather than a precise figure.

One of the measures that Gillard had highlighted as being an ongoing problem with the 457 visa program was employers discriminating in favour of 457 visa workers over local workers.

“Recent cases include examples of certain sponsors who have advised the department that they do not seek to recruit locally as it does not fit with their business model, or because it is too expensive to recruit domestically,” the discussion paper read.

The proposed change was expected to have nil impact, except in rare instances where an employer might be sanctioned for favouring overseas workers.

About Josh Taylor

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry and all the goings on in government IT. Like most Gen Y, he spends a lot of his time with his eyes glued to his iPhone on various social media apps.

By Alan Hanson

As recently as 2006, Pluto was a planet, Apple hadn’t broached the iPhone, and India may have been the choice for low cost off shoring – without serious significant competition.

Today, as outsourcing and off-shoring users increasingly are contemplating the question of how easy or challenging it may be to bring work “back” into an organisation, much has changed. The prerequisite question however remains: “Why would work come back?” This in turn should inform: “Where is Back?” And the possibilities are broader and more interesting than ever.

Customers are Considering It

Many global and organisational factors have changed since the time that companies made their initial decisions to leverage a global model for service delivery. As a result, a number of important considerations and alternatives should be evaluated in determining what to do next, if radical change in contemplated.

Customers who have made use of various global locations to source business services or information technology services may consider the question of bringing work back for a variety of reasons. First, it is good business planning hygiene. Call it Plan B. Second, regulators such as the US Fed, corporate boards and other governance-minded stakeholders increasingly want a better understanding of how well equipped subject firms are to deal with changes whether prompted by an outright failure of the current model, or, more likely, reasons that are “elective” in nature.

Not Always Binary

It is interesting to keep in mind that the prompts for bringing work back are probably not limited to the binary scenarios of either a Termination for Cause or for Convenience. On hardly an exhaustive basis, consider that in between these extremes lie a series of possible causes, including:

• Compliance or regulatory changes
• Scope or scale changes
• Changes in supplier competency
• Location issues
• Revenue model shifts

One example of a “compliance-driven shift” is a former client; call it “Bank A”, which placed some first party collections activities in the Philippines on a co-sourced basis. Although pleased with the performance of the function, after an acquisition the prevailing view of its new senior compliance personnel was that the arrangement was inappropriate.

Another example, this one of a “scope or scale-driven shift” occurred with a large regional client; call it “Bank B” that had placed an Auto Leasing related function in a near shore location on an outsourced basis. Performance was hardly an issue. In fact, continuous improvements to the underlying process were so dramatic that ultimately the size of the delivery team needed was deemed too small to be effectively managed on a sourced basis. We should all have such problems, right?

Finally, clients seeking to enhance revenues in an emerging economy may eventually deem it attractive, imperative, or both to “own” their previously sourced operations in that country.

While any of these factors may prompt the organisation to consider termination, and could likely be classified into the “Convenience” category, the more important point is the implications of each respective cause on potential Choices in taking the work back.

Where is Back?

And where exactly is “back” anyway? Does it mean back to the country of the process’s origin? Back to the same city or the same centre? (Though, it is doubtful that the centre was mothballed in anticipation of such a day).

How about back to the same business model? Or does it mean somewhere else entirely? The right answer may well depend upon the reason for termination.

Recall that both of the Banks in the earlier Collections and Auto Leasing examples found that performing their processes “offshore” was acceptable, but doing so on an “outsourced basis was not deemed effective.

Now consider their differing possible solutions. Bank B with its outsourced auto leasing process could have made the choice of adding scale to its outsourced operation, rather than taking back the particular function. After all, it was pleased with both the outsourcer and its near-shore choice, while only the shrinking scale was problematic. By contrast, Bank A, performing outsourced collections, seemed to have little choice other than to shift the operation away from an outsourced partner.

The next question might be whether to move it back onshore, or keep it offshore – where it worked – and possibly domesticate the operation. By the time of its shift in compliance views, might the Bank also have other company-owned operations in the same or another offshore precinct that it should consider?

Further, if outsourcing had not become a compliance issue for the Bank, but instead factors such as resourcing or pricing in the country had become problematic, could another country work rather than bringing the function back onshore?

The point is that much has changed in the world in the short period of time since many organisations made their first or even second-round of global services sourcing decisions. In a world exploding with options, bringing work back in-house or onshore should not be the knee-jerk reactionary solution.

What’s Changed?

If the primary objective of the sourcing activity remains cost savings, consider that today the cost differential between India and the Philippines can be less than 100 basis points, with Philippines being the preferred choice between the two for certain processing functionality.

Factors such as lower IT wages, while sporting significantly lower levels of wage inflation, infrastructure and supplier maturity have made important strides in many of these locations, so the available options when needing to shift a function have never been greater

It is not just a tale of two countries. On the software development front, for example, today there are no fewer than 19 global destination countries with at least some level of IT scalability attractiveness and entry-level IT salaries less than 40% of those in the US.

Several countries in that mix – China and Vietnam – feature lower IT wages than bellwether India’s, while sporting significantly lower levels of wage inflation. Factors such as infrastructure and supplier maturity have made important strides in many of these locations, so the available options when needing to shift a function have never been greater.

If, for whatever reason, “back” does mean only “to the country of origin”, the menu there has also likely changed significantly, mirroring the global phenomenon. In the US as an example, there were at least 20 US Cities where IT job creation increased by more than 40% in 2010. Many of these were relatively lower cost cities such as Raleigh, NC; Pittsburgh, PA; and Columbus, OH.

While such statistics speak to the demand-side of the equation, and can have the short term effect of soaking up talent and driving related wages higher, the longer term impact is a tendency to create pools of supply as experienced workers migrate to such areas, and universities feeding the local eco-system crank up programs geared to a sector of the market where jobs are being newly created.

Similar patterns of opportunity are taking shape in other buyer-populated areas such as Canada and Western Europe and other areas. When faced with making complex choices about moving a function, the result of all this activity is a richer set of options. And these can be explored with far more geo-operationally-informed data in hand.

Financial Case

This is not to say that a greater number of options make the financial case easy. Despite contrary claims, much globalisation activity has been driven by a quest to find the lowest cost solution or destination. As a result, when a process must move, the financial case may not be obvious.

Returning to the earlier example of Bank A, there would not be an expectation of retaining the prior financial case if the collections process were brought onshore. But, given that compliance was the driver of change, then the shift should necessarily consider the broader business case. For example, would such a move reduce the likelihood of compliance infractions or monetary penalties? Would it lessen the likelihood of legal actions by borrowers, or the probability of the success of any such legal claims?

Similarly, if an application development process is relocated because of poor quality, when it is subsequently moved to a higher wage location, the outputs – inclusive of quality, turnaround time, user proximity, code flexibility, or how early an error is found in the testing cycle – rightly should be counted and quantified. Examining only input labour costs misses many of these factors.

Performance Trough

There are numerous other factors to consider when the “back” question presents itself. For example, there is the challenge of managing the “Performance Trough” that follows the transition of work regardless of business model. For many, bringing work in-house harbingers a smooth return to experienced hands. Of course, those hands may be long gone. Even if not, the trough will likely persist.

Researchers from Carnegie Mellon and CalTech convincingly found that even when people trained in doing a specific, identical task did nothing more than rotate amongst themselves, their performance, as measured by such metrics as turnaround time, could get as much as 170% worse in the short term.

There is also the “Social Contract” with the resources or the locations in question that must be considered. If an employer, or client, is viewed favourably for creating 500 new jobs in an area, then the flip-side of their actions may engender ill-will – particularly if the resources aren’t quickly re-engaged.

What is the social contract between globaliser and community? What is the potential impact on brand – even in the case where Termination for Cause exists? Back is definitely not a simple question.

Alan Hanson is Senior Vice President of Neo Group, a Globalisation Advisory and Analytics Company.

www.the-outsourcing.com

By Zoe Kleinman

Retired IT manager Nigel Clarke, from Kent in the UK, has launched a website listing the call centre menu sequences for accessing thousands of services.

He started the project after growing frustrated about the number of options and amount of recorded information on call centre menus.

Mr Clarke discovered that some automated menus have nearly 80 options.

It can take over four minutes to get to the service required if the caller listens to each stage in full, he said.

As an example, speaking to an adviser at HM Revenue and Customs only required pressing four buttons but it could take six minutes to get through each menu level, Mr Clarke said.

HMRC said it was working on improvements to the service.

“HMRC is looking at ways to improve its interactive voice responses and is getting ready for the introduction of new speech recognition technology,” said a spokesman.

“This technology will react to what the caller says instead of asking them to select an option by pushing a button on their phone. HMRC plan to introduce these improvements later this year.”

Labour of love

Mr Clarke said the website pleasepress1.com was a “labour of love” which he built after seven years of creating post-it notes of sequences he used regularly.

He used Skype and recording software to make thousands of calls, with the bulk of the work being carried out in the last six months.

Reporting a water leak to Lloyds TSB’s home insurance department requires dialling a total of seven numbers, one at each stage of the call (1, 3, 2, 1, 1, 5, 4), and it takes more than four minutes to navigate the 78 menu options, according to the website.

“The companies have these systems in place for a reason,” said Mr Clarke.

“I’m not against the system, but I am against bad design.”

In an ideal world, he said, companies should just offer different phone numbers for different services.

“No menu is best – but if it is a necessity then design it properly. I think two levels maximum is ideal. Some stretch to three. You don’t really want much more than that.”

Mr Clarke said he was inspired to build the website after being surprised by the “emotional response” he got from people whenever he mentioned it.

He says he doesn’t intend to devote himself full-time to maintaining it.

“I’d like the companies themselves to say, ‘we care about our customers, we’ll publish our menus’,” he said.

When tested by the BBC, some of the sequences did not seem to result in significant time savings, while others ended with the user being transferred straight to a customer adviser rather than going through each level of the automated system.

Zoe Kleinman, Technology reporter, BBC News

(In Photo: Ian Walker, Queensland IT Minister)

By Sylvia Pennington

Technology outsourcing ‘will continue to increase’

Hundreds of technology workers in the Queensland public sector face an uncertain future after the government reaffirmed on Thursday its intention to outsource an array of services currently delivered in-house.

The news comes in the wake of the Costello Commission of Audit into the state’s finances, which recommends the government look to outsourcing and asset sales to balance its books.

The government’s commercial service delivery vehicle CITEC and its Shared Services division employ about 500 and 250 staff respectively.

CITEC’s remit includes data centre, network and internet service provision, while Shared Services manages and supports the majority of the state’s finance and human resources systems and processes.

Queensland Minister for Science, Information Technology, Innovation and the Arts Ian Walker, who oversees both units, told IT Pro the private sector would be given the opportunity to compete for this work as soon as possible.

The move would “ensure service meets up to external standards”, Mr Walker said.

Agencies needed to stop providing services and become procurement managers, Mr Walker said.

Details on how the state will move from one model to another, including whether departments will chose their own suppliers or be herded into whole-of-government arrangements, are yet to be determined.

Mr Walker said his department wanted to proceed quickly but cautiously with the transformation process and would formulate “a proper plan to move from one model to another”.

The government was keen to avoid further costly Queensland Health payroll-type debacles, Walker said.

Affected staff would be kept informed, he added: “We will talk it through with them and work out the detail”.

Nitty gritty has been conspicuous by its absence in the government’s ICT strategy to date, although motherhood statements and hyperbole have been in ready supply.

It’s been a year since Walker’s predecessor Ros Bates announced a $5.2 million audit into the state’s aging ICT systems. Originally due to be handed down last October, the audit report has yet to make it to Cabinet and may never be released publicly. Mr Walker took on the job in February promising to ring in changes.

Last September, Ms Bates described the state’s ICT infrastructure as a “1972 Ford Falcon clunker” with a $6 billion repair bill. Edited highlights of the audit report revealed the government runs 1730 applications, most of them bespoke and at least 10 years old, and a slew of duplicated systems.

The prospect of an upcoming outsourcing bonanza comes as welcome news to the local ICT sector, which has seen public sector work dry to a trickle in the past 12 months.

Slow times have compounded the woes of hundreds of local ICT workers who found themselves on the jobs queue after the government slashed hundreds of contract roles shortly after coming to power.

The managing director of the listed IT services company Data 3, John Grant, said the government faced the difficult agenda of reinvigorating the local economy and cutting costs within government.

Pushing more revenue into the private sector could help achieve both goals, Mr Grant argued.

“It’s good to give the industry the opportunity to see some positive future,” he said.

“I don’t want to advocate public sector jobs to be lost but people have to find their place in the transformation.”

While some ICT workers might fear the changes, they needed to “look out the windscreen, not in the rear-view mirror”, Mr Grant said.

Whether the government will require ICT work to be conducted in Queensland remains to be seen.

Offshoring has become a favourite means of containing costs for many large private sector organisations including big banks. The practice has drawn the ire of many in the ICT sector who say it erodes wages and prospects for local technology workers.

In February, Brisbane City Council workers took to the streets to protest against the outsourcing of 55 IT jobs to HCL, a company based in India, to save $7.9 million.

Read more: http://www.smh.com.au/it-pro/government-it/uncertainty-as-government-vows-to-outsource-more-tech-services-20130502-2iuzo.html#ixzz2SHPzPwdb

(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.

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)

DigitalNewsAsia.com wrote a scathing editorial on Outsourcing Malaysia (OM); an organizational chapter of Malaysia’s National ICT Association (a.k.a. PIKOM when abbreviated in the Malay language); claiming unrealistic plans in growing the industry towards RM7.1 billion by December 2015.

1 US Dollar ~ RM 3.10 (as of 3^rd of March 2013)

To add; the news portal also claims a lack of clarity in defining Malaysia’s unique selling proposition and too broad a swath in drawing attention towards growing Malaysian Outsourcers through healthcare and supply chain services.

Although it pains me to say this; considering my employer Mesiniaga is a supporter of OM; I do reverberate the frustration of the author Karamjit Singh.  Not so much with OM, but how little do large markets like US, Europe, Asia Pacific and Australasia know about Malaysia’s potential due to obscure unique selling propositions.

First and foremost, Malaysia is probably one of the luckiest places on the planet; with the islands of Indonesia and Philippines shielding the nation from torrential monsoons; as well as suffering none of the tectonic and volcanic activities that plague the neighbouring countries; but enough with the obvious geographical meanderings.

We are a nation of multilinguists due to our central geographical location; with the Straits of Melaka funnelling trading ships between East and West. This resulted in traders from Arabia, India and China opting to make Malaysia their home throughout early history; not to mention a legal system based on English Common Law as well as a heavily influenced English education system having being previously a Crown Colony. Admirably, we are one of few nations that gained our independence from British rule in 1957 through a series of civilized negotiations versus massive upheavals and uprising. Malaysians are thus formally educated in the Malay language and English and may also be educated in Mandarin, Tamil and even Arabic should they began their early education with vernacular or Islamist schools. With the rise of China and India as global champions and existence of economic hubs in the Middle East; Malaysia should be the strategic staging point to export services to those regions.

Personally I laud the Malaysian government’s foresight and efforts in catalysing the nation into a modern state via IT with the (Multimedia Super Corridor) MSC initiative that began in 1996. MSC provides grants through massive tax incentives and a Bill of Guarantees to MSC status companies and are open to national firms as well as foreign organizations. Besides MSC, there are also several economic development corridors, most notable being the Iskandar region; north of Singapore but three times as large; that also has tax incentives and protection for foreign firms investing in Malaysia. Within the plans of Iskandar are world class infrastructure, bandwidth and transportation system that includes a bullet train between Singapore and Kuala Lumpur via Iskandar by 2020.

Now that we’ve covered geographical, governmental and structural support systems (education, policy and infrastructure) it is time that we focus on Malaysian IT champions. One might say that this list is horrendously biased because some of the companies quoted are not public listed (revenue numbers not available). In my defence, I quote these names because I have personally either used their products, worked with them, or have analysed their performance prior. Needless to say the list is not a complete one and just because the company is not mentioned, does not mean that they are bad nor are these the only good companies.

Here’s a hint, you can do some background financial and directorship check on non-listed Malaysian companies through the Companies Commission of Malaysia online website.

The list!

The poster child of Outsourcing in Malaysia happens to be SCICOM (MSC) Berhad having ranked 79 in IAOP’s (International Association of Outsourcing Professional) 2011 Global Ranking of Top 100 global providers. SCICOM provides Business Process Outsourcing, IT as well as services across 42 languages and even more countries.

Within the Financial Services space, my hat goes off to the Silverlake Group; which supplies Core Banking and related IT systems for banks. Silverlake’s customers include regional banks in Indonesia, Singapore, Brunei and the Philippines. N2N Connect also deserves a mention as it provides online share trading solutions both in Malaysia and regionally. Why? Because they manage to almost corner the market in Malaysia within a short 10 years span.

For some sadistic reason I love Cuscapi Berhad with their great story of retail point of sales systems and back end financial systems to boot. Considering how cut throat the retail sector is; it takes a highly lean IT company to stay profitable while meeting customer demands.

IRIS Corporation Berhad is one of many strange Malaysian occurrences where the stock prices do not follow the company’s performance despite a bumper 2012 year. IRIS provides smart card solutions that include the national identification card in use by all Malaysians. IRIS has since expanded its business to Asia Pacific, Middle East and Europe; helping countries to deploy their own national identity systems or smart card based solutions.

CSF Group; a Data Centre builder, chose to interestingly list in the London Stock Exchange instead of Malaysia. While their share prices have been pummelled since listing; the strategy of developing and executing data centre deals like a real estate investment trust coupled with the day to day revenue stream of leasing data centre space have resulted in handsome financial growths. Their capabilities as a builder have also seen them delivering data centres across the region.

Finally, I would like to mention my employer Mesiniaga Berhad; a long time stalwart of the Malaysian IT systems integration scene, currently in the midst of reinventing itself through the vision of the Managing Director, Fathil Sulaiman. Since the beginning of his tenure in 2008, revenue and profitability have steadily grown quarter by quarter.

But why a system integrator (SI) and where exactly is the SI’s unique value proposition? I believe that unlike sectorial plays; system integrators have a tougher but rewarding asset; the know-how and credibility to deliver large scale and complex IT implementations successfully. System integrators also play a one-two punch in teaming with the primary intellectual property owner; be it the banking; retail or stock broking software providers that leverage on the SI’s know-how to marry the solution with the end customer’s ecosystem.

For international firms coming into Malaysia; there’s nothing like a dependable brand that can carry your business vision within Malaysian shores.

Closing Remarks

If you haven’t noticed, the companies chosen offer services targeted towards a sectorial vertical and I believe that this is essential for the IT firm to stay business relevant in the long run. Secondly, I have avoided captive organizations as information tends to be obfuscated by the parent’s business performance data.

More importantly, Malaysia do possess the relevant technical skills and organizations to make it an outsourcing Mecca for the region.

To end, I would like to digress by enticing international readers with the fact that Malaysia has three of the top 10 largest malls in the world; suffice to say the nation’s capital is an intense megapolis and a shopper’s paradise; what better way to end than to introduce Malaysia’s capital Kuala Lumpur via Rob Whitworth’s time lapse photography.

bernard.sia@mesiniaga.com.my

Tony Moore

brisbanetimes.com.au senior reporter

Furious staff unions have lodged a formal objection with Brisbane City Council over its handling of plans to outsource 50 information technology jobs overseas.

The Australian Services Union says the plans are in direct breach of an enterprise bargaining agreement, which states staff whose work could be outsourced must be given enough information to build a business case to bid for the work themselves.

The council has confirmed it plans to outsource IT jobs in three work areas – help desk, project services and administration – but a spokesman for Lord Mayor Graham Quirk said a final decision on exactly where the jobs would be outsourced had not been made.

However ASU assistant secretary Jennifer Thomas said the council’s staff was horrified to learn in yesterday’s report that plans could be announced within weeks.

Ms Thomas said the council had only once before raised the idea of outsourcing jobs, to a firm called QPG, which was part-owned by the Local Government Association and founded by former Labor lord mayor Jim Soorley.

In 2008, Mr Soorley wanted the 156 local councils in Queensland to think of alternatives to having their own rates section, IT sections and their own payroll sections.

Ms Thomas said the council’s current proposal had her fearing the worst, because the United Kingdom structure of QPG was recently sold to India.

“It really has been a bit of a fizzer,” she said.

Ms Thomas said the council’s IT staff were now confused and demanding information.

“In their minds they have not been provided with a business case yet,” she said.

“…There was really only some rumours about it going to some international competitors before Christmas.

“So now, the immediate view on that from staff was that they could never compete with those type of prices and they all want to keep their jobs.”

Ms Thomas said, after lodging the formal complaint, the union would begin meeting with its members before deciding how to help them bid for their own jobs.

“If they have to compete with international rates with the work going overseas then that brings a new dimension into what we will have to do,” she said.

The council’s Finance and Administration chairman Julian Simmonds said staff and unions had been fully consulted about the plan.

Council opposition leader Milton Dick questioned why the council was considering outsourcing IT jobs to overseas firms “when there are hundreds of trained IT professionals within Brisbane who are more than capable of doing the job.”

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