Sourcefit Blog Feed Customized, transparent offshore staffing solutions from Sourcefit make outsourcing in the Philippines easier than ever. en-us Sourcefit Logo <![CDATA[ Telesales & Sales Outsourcing Success Stories and Case Studies ]]> Sourcefit Philippines Outsourcing Blog: Telesales & Sales Outsourcing Case StudiesTop-performing companies understand how sales and telesales outsourcing can help them achieve more than twice as much return on their sales investment. Sales outsourcing keeps costs low and drives better decision-making from sales managers, as the following case studies and success stories illustrate:
Virtual Sales Team Helps Company Generate $22.5M in Revenues
A U.S.-based firm wanted to recruit sales agents in various parts of the country and find a sales channel that would drive market share and improve customer retention. The firm worked with a sales outsourcing provider, which assigned a virtual sales team of 60 sales representatives to different areas. A virtual sales executive was responsible for each location and for daily contact targets, ongoing sales training, and completing the sales cycle. Sales data was captured in a CRM tool to maintain territory information and find future opportunities. Data was also used in marketing campaigns. Outsourced sales and telesales allowed the client to generate $22.5 million in revenues, with four units on average per sales rep/month and with each transaction valued at over $7,000. Each sales rep handled 300 customer contacts and 8 opportunities per month, while cultivating strong customer relationships due to low turnover.
Philips Outsources Sales to Enter New Markets Faster
Philips Speech Processing is a global manufacturer of professional dictation hardware and software. The company was a leader in medical dictation products at that time, and it wanted to expand to new vertical markets, specifically the legal dictation market. Its product would help law firms create complex legal documents faster. As a new market player, the company had yet to convert leads into actual buyers; it had no contact database and little understanding of buyer behavior. Instead of creating advertising programs and building an in-house sales team over time, Philips decided to outsource sales lead development to a trusted service provider. The vendor worked closely with Philips to understand the client’s products and strategy through interviews and extensive market research. The vendor profiled top law firms and assigned sales reps to contact lawyers as well as office administrators multiple times to increase conversion rate dramatically. After generating leads, the vendor qualified leads (using criteria developed by Philips and the service provider) and built a database of contacts. With a database of high-quality leads, top sales representatives were able to focus on closing deals rather than cold calling. Philips achieved more than 5 percent conversion rates with the database of qualified buyers and jumpstarted the company’s growth in a market that is difficult to access. Philips was able to gain new insights into buyer needs and behavior. The service also built a solid structure to ensure the predictability of leads and revenue projection.
Healthcare Firm Boosts Lead Generation through Inside Sales Outsourcing
A leading healthcare services firm faced many challenges: insufficient market coverage, declining revenues year-on-year, too much focus on large accounts, and the inability of field sales rep to access smaller accounts. The company decided to hire an outside expert, an established B2B inside sales provider, to improve quality and leads for the field sales team. The service provider worked closely with the client to address the challenges. The vendor provided the services of an inside sales executive to look for new sales channels, drive and nurture leads, and grow revenue. The vendor took responsibility for objections and closing, handling calls and emails that exceeded the monthly target. All data was recorded in CRM tool Salesforce for accurate monitoring and analysis. As a result of the partnership, the healthcare firm generated five leads per month and uncovered more than 75 leads. The inside sales executive created new sales channels to drive revenue, scheduled calls for the field sales team, and created a database of the right people to call. Overall, the sales outsourcing campaign uncovered $27 million in opportunity in only one year.
And Now for your Own Success Story: Developing an Outsourced Sales Strategy
Sales strategy is a company’s plan to increase profits by selling products and services. Sales strategy fits within the “focus” part of the sales management process. The process includes identifying and targeting the best sales opportunities, planning territories, commissions and quotas, driving high-quality leads, improving conversion, and customer relationship management. A company’s admin team and its sales and marketing managers typically work together to develop sales strategies. Each strategy involves a “pitch” designed to hook potential customers. Pitches vary in tone and content. Telemarketers often use spiels or memorized pitches that are communicated verbatim to the potential buyer. Different industries use different sales strategies, but strategies are always tailored to the target market.
The Right Sales Strategy
In general, a sales strategy is considered “right” when it can be easily executed by the sales force, and the execution creates value for the company, customers, sales team, and channel participants. Easy execution means that the strategy is synced with the organization’s value proposition and ability to deliver on promises. A good strategy also means that goals are achievable and realistic in terms of the company’s selling resources, sales cycle, and market potential. The development of an ideal sales strategy is a multi-step process that takes time. For example, an e-commerce company selling jewelry first needs to determine what items will be sold to whom, in what quantities, and how. It also needs to determine goals for the sales team to accomplish, such as the number of leads per month. Most sales strategies aim to achieve multiple goals, and each goal depends on the industry and the sales team. Great goals for the sales team align with what the team can influence on a daily basis and contributes to the overall company sales strategy.
Outsourced Sales Strategy
Sales strategy development can take a lot of time of time and resources. It also requires top-level talent who understands your product, business and industry. Building an internal sales force and a strategy development team means hiring, training and supporting part-time or full-time professionals, an activity that can drain your resources. Finding sales strategists that can transform your sales force and positively impact your bottom line can also be difficult in a competitive job market. To drive revenue growth and access top talent and relevant technology, many companies are choosing to outsource sales strategy to an experienced third party. Sales strategy service providers help organizations increase revenues through the development and execution of the right sales strategy. Many vendors today focus on an analytics-driven and customer-focused approach to strategy development, taking into account consumer buying behavior, global competitiveness of target markets, use of multiple channels, and solutions integration. Common sales strategy services include market research, competitive analysis, strategy testing, strategy monitoring and review, implementation, training, and detailed reporting. A company may outsource only one service, such as strategic consulting or strategy review, while others may adopt an end-to-end sales strategy solution.
Outsourced Strategy Development
Outsourced strategy development differs from vendor to vendor, but the general steps are similar. The process begins with an identification of opportunities, followed by a comprehensive evaluation of the company, product/service, and market. Next, the company’s value proposition is developed, and the various strategies are tested and reviewed. Finally, the service provider and client works on strategy development and execution. Identification of opportunities. The process starts with an in-depth consultation between the provider and sales and marketing executives to identify problems and opportunities. Typical opportunities are improvement of customer access, improvement of customer experience, increasing qualified leads, and cost reduction. Evaluation and analysis. After opportunities are presented, the company, product, and market are evaluated. Competitive analysis is also performed to identify the firm’s competitors, their strategies, and their strengths and weaknesses. Market analysis is done to identify customer segments and product/service offerings. The segments and offerings are grouped in a map, allowing easy identification of customer segments, channels, channel combinations, and solutions. Value proposition development. Value proposition development is the identification of the feature or innovation that makes the product and company attractive to buyers. Based on data collected during analysis, the service provider develops a clear market offering driven by value. The process also includes development of a unique selling proposition (USP), exploitation strategy, market entry strategy, and communication strategy. The exploitation strategy refers to other ways of presenting the product to the consumer. This might be done through licensing, the creation of a joint venture, or through intellectual property (IP) sale. Market entry strategy details how the product is to be introduced to the new market and for how much (pricing during and after market introduction). Strategy review and testing. Before implementation, the strategy is reviewed with sales, marketing and executive leaders. The provider will test the strategy to determine whether it achieves the sales objectives and is aligned with corporate goals. The review pinpoints problem areas and changes needed to be made to the original plan. Periodic reviews are important because customer needs and buying behavior are dynamic, and sales strategy must align with these factors to be effective. Implementation. The implementation stage allows adequate time for all parties involved to get used to change. Changes are introduced at a pace that is manageable, starting with a pilot phase before a full rollout. This applies to both people and software. The provider consults with executives, sales and marketing managers, and sales force leads about training people in new ways of working and using new technology. CRM tools play an essential role in managing new sales strategies at a large scale.
Getting Started on Sales Outsourcing in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES Sales Outsourcing and How It Can Help Your Business Telesales Support Case Study: Telesales and Customer Support Customer Service Outsourcing POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Sales Outsourcing and How It Can Help Your Business ]]> Sourcefit Philippines Outsourcing Blog: Sales Outsourcing and How It Can Help Your BusinessSales outsourcing is the process of subcontracting an organization’s sales activities to a third party. Businesses work with outside firms to fill sales staff positions, develop and execute sales campaigns, and build a dedicated sales team around a new product or marketing program. Offshore sales outsourcing providers may rely on an inside sales model that allows external sales staff to work for the client from anywhere in the world, while local providers may combine virtual sales services and field sales representation. Sales outsourcing depends on a third party to provide the services of a dedicated external sales force. The external sales personnel become part of the internal team and are assigned to specific sales campaigns. They perform many roles within the organization that may include marketing, telemarketing and management. External sales staff and sales representatives may utilize various promotional techniques on behalf of the client, including business-to-consumer (B2C) sales and business-to-business (B2B) sales. Most companies already outsource a part of their sales and marketing functions, and a significant percentage are planning to outsource these services. Most firms outsource only some sales activities, while others outsource an entire sales process, such as sales conversion or the process of identifying qualified leads and turning them into sold accounts.
Sales BPO
Sales business process outsourcing is the transfer of responsibility for an entire process to a third party. Services include recruitment of sales staff, campaign development, analytics, and customer relationship management. Many established vendors now offer end-to-end sales and marketing solutions, becoming strategic partners with clients instead of merely providing a service. The Internet and third platform technologies like big data and social business have transformed the way organizations sell their products and services. More companies are using sales business process outsourcing to reach their target audience, identify buying behavior patterns, and increase conversion while keeping costs low. The real benefit of sales business proves outsourcing to businesses is total value, and not simply cost savings.
Why Outsource Sales Activities for your Businesses?
Companies traditionally use sales outsourcing when they wish to sell a new product or expand into new markets and locations. Startups that want to concentrate their resources on core activities may also outsource sales. Intense competition is driving companies to increase outsourcing of sales functions to outside firms that have the expertise, technology and tools to improve competitive advantage. Sales outsourcing providers address challenges that businesses face, such as identification and conversion of qualified leads, outside sales staff that take a long time to contribute to business goals, operational inefficiencies, and increasing costs. Top reasons for outsourcing sales include: Lower cost of sales. Businesses are always looking for ways to increase profits. An effective way to achieve this goal is sales outsourcing, which increases sales while reducing costs. Outsourcing your sales force to an experienced third party means lower overhead and labor cost, standardized sales costs using commission rates, and increased sales coverage. The vendor is responsible for building, training and supporting outside sales personnel—something that requires considerable investment when done in-house. Improved market coverage. Skilled sales personnel can be better at getting to your current and potential customers than in-house staff. For example, an inside sales force takes market coverage from local to global. Businesses can access markets and verticals that were previously unavailable. Service providers also provide sales solutions that complement your field sales strategy. Improved speed to market. An outside expert has deep industry knowledge and experience to provide sales services at the right time and place. They can recruit top sales professionals very quickly to get your sales team up and running within tight timelines. Improved customer satisfaction and retention. An outsourced sales team can improve customer satisfaction and retention by establishing regular contact with customers, identifying customer satisfaction baselines, and implementing improvements through continuous monitoring and reporting.
Outsourced Sales Solutions
An outsourcing sales provider is responsible for building an external sales force with skills and competencies that matches the unique needs of an organization. A manufacturer may outsource only direct or channel selling activities, while a startup or small business may outsource all sales functions to be able to grow the company. Almost all sales activities can be outsourced, from low-level, transactional tasks like sales call centers to higher value, strategic solutions. Commonly outsourced sales services include: Sales Lead Generation and Qualification Lead generation is the solicitation of inquiries from potential customers. It is the first step of the sales process. Lead generation can be done online and using traditional methods like trade shows. Leads can either be good or bad-quality; good quality leads are more likely to buy the product or service. Sales lead qualification refers to activities that evaluate the readiness and ability of a lead to be converted into a buyer. Third parties may provide skilled sales professionals to evaluate leads using direct mail, telemarketing and other methods, or handle the entire process of sales lead generation and qualification. An outside firm whose core business is lead generation and qualification can significantly increase the quality of leads and number of conversions. Strategic Sales Planning Strategic sales planning is the development and execution of a business sales/marketing plan based on accurate data from market research and analytics. Outsourced sales planning can help businesses better allocate sales resources and execute strategies that grow the customer base. Service providers offering strategic planning provide sales forecasting, quota planning, territory planning, and commission planning. They also provide market research data, software and tools for identifying the best sales opportunities for specific products and services. Sales Management Sales management is the management of local, external and virtual sales team members, with the goal of increasing productivity and quality. Many business owners and CEOs find that they are not the best managers of in-house or external sales teams or that their team need better direction, so they outsource the service to a third party. Small businesses that can’t justify the cost of hiring full-time sales managers may also outsource sales management to service providers. Another reason for outsourcing sales management is to improve the performance of niche segments and sectors that are difficult to reach. Customer Relationship Management (CRM) Customer relationship management is a system that manages all company interactions with existing and potential customers. The right CRM strategy allows companies to focus on and improve their relationship with individual customers. CRM requires the right technology for organizing and automating sales and marketing activities, as well as customer and IT support. Third parties may provide CRM software or CRM staff that has experience with common CRM tools (like Salesforce). The provider may also take responsibility for the company’s entire CRM process, from planning to execution to monitoring. Product Launch Campaigns Market research firms report that 75 percent of new consumer products in the U.S. fail to reach $7.5 million during the first year. Most product launches fail, and it is very difficult to get customers to buy something new. The right product launch campaign is crucial to driving sales, and companies can develop an appropriate product launch strategy by working with an experienced and objective third party. Vendors provide market research, sales channels education, launch campaign testing, and execution services. Sales Staff Recruitment The service provider is responsible for finding, screening, evaluating and hiring sales professionals to fill open positions and augment in-house sales teams during peak times. They can also be integrated into internal teams to cover long-term absences. External sales staff can be temporary, permanent, part-time or full time. Inside Sales Some offshore providers specialize in inside sales solutions, working with clients and building an inside sales organization on their behalf. Inside sales works on the premise of a sales team that is usually located in another area or country. Offshore sales staff can access untapped markets to provide additional revenue streams while reducing dependence on costly field sales staff. Offshore sales professionals also provide online reporting of sales results and campaign ROI data. Offshore sales expertise is typically comparable to local sales expertise, allowing the offshore team to be integrated with the in-house sales team seamlessly. Outside Sales or Field Sales Outside sales or field sales refer to person-to-person selling methods like door-to-door sales and business to business (B2B) sales for products and services intended for other businesses. Third parties provide the services of experienced field sales professionals to see customers in person by appointment or through cold-calling. Field sales reps present the product and close sales at the customer’s residence or office. Hiring full-time field sales professionals can be expensive, and service providers relieve the cost burden by providing field staff on a temporary or contract basis. Transactional Sales Services In addition to higher value sales functions, outsourcing vendors also provide transactional, back office services to support internal and external sales teams. Commonly outsourced sales support services include virtual offices, customer service, technical support/IT help desk, and administrative support. End-to-End Sales Solutions Comprehensive sales solutions encompass all aspects of selling, from development to sales fulfillment. End-to-end solutions vary with the needs of a business, but they often include sourcing and hiring sales professionals, training, CRM deployment, sales management, reporting, and infrastructure services (telephone connectivity, computers, hardware, software, Internet connectivity, and facilities). End-to-end sales outsourcing are often employed by large organizations that already have a working relationship with the vendor. The sales outsourcing engagement includes implementation and risk mitigation planning.
Getting Started on Sales Outsourcing in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES Telesales & Sales Outsourcing Success Stories and Case Studies Telesales Support Case Study: Telesales and Customer Support Customer Service Outsourcing POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Who Can Benefit from Engineering Process Outsourcing? ]]> Sourcefit Philippines Outsourcing Blog: Who Can Benefit from Engineering Process Outsourcing?Global engineering process outsourcing (EPO) is growing rapidly, with companies establishing captive centers and working with service providers in emerging markets like the Philippines. Businesses and engineering professionals in various industries are feeling the pressure to bring better quality products to market faster, while keeping costs down. Service providers are helping organizations achieve these goals and address challenges unique to each industry.
In 2012, the automotive industry recorded the largest engineering spend among all industry verticals. The number of new products in this segment is increasing, fueling the demand for engineering services from third party vendors. Both established and new companies in the auto industry benefit from third parties that offer design and other services to support new products such as electric cars and electronic parts. The outsourcing of engineering services in this sector helps companies gain about 20 to 50 percent cost savings while improving quality. Because responsibilities are well-defined and communication is clearer between individuals, team members are better focus on the task at hand. Lower rates associated with offshore services can also help expand the number of products that a supplier or manufacturer can make.
Consumer Electronics
New devices and products are being introduced faster than consumers and the market can keep up with them. As a result, companies in the consumer electronics sector feel the pressure to innovate and create “smart” products for differentiation. Service providers shorten the product lifecycle and bring the necessary technology and expertise to help companies achieve competitive advantage. Speed of deployment is one of the top reasons consumer electronics firms outsource engineering services. A service provider can quickly bring in necessary expertise as needed, including senior-level talent and executive roles, without the need to go through a lengthy search and recruitment process. Engineering services outsourcing in the consumer electronics segment can also facilitate transfer of core knowledge to new staff.
Oil and Gas
The discovery and exploration of large oil and gas fields worldwide has led to an increase in outsourced engineering services. Oil refineries, petrochemical plants, gas processing plants and other oil and gas companies reduce costs, improve process efficiency and access engineering talent by outsourcing rig design and support, refinery design and support, engineering integration and support, program management, on-site and offsite training, and technical documentation.
Engineering services outsourcing is also gaining traction in the utilities sector. Instead of building in-house engineering capabilities, utilities companies work with vendors to access skilled labor and advanced technology such as smart grid design and support.
Construction, Industrial and Civil Engineering
Companies in the construction industry outsource engineering services to access offshore talent, reduce costs, and accelerate time to market. Engineering services in this sector encompass everything from planning to actual construction of residential and commercial buildings, environmental infrastructure, transport infrastructure, and water distribution channels. The construction sector in developed economies demands improvement in infrastructure and new construction activities. Engineering service providers are offering their expertise in design, project management, and product lifecycle management (PLM) to ease the cost burden on construction companies, independent contractors, and building owners.
Engineering Professionals
Engineering professionals have always been in demand, but new technology has raised the demand in a way that leave many companies struggling to fill key positions, even in developed countries like the United States. Service providers around the world are filling the talent gap by sourcing skilled people from different locations. Locations like Eastern Europe, Mexico, the Philippines, and Vietnam are increasingly being tapped for talent as demand for highly-skilled engineers continues to grow. Engineering outsourcing has helped software engineers, architects, structural engineers, mechanical engineers, electrical engineers, landscape architects, interior designers, environmental engineers, civil engineers, general contractors, subcontractor, quantity surveyors, and other STEM professionals (especially those based in emerging economies) get better jobs, training and experience at international firms. The creation of engineering jobs fosters the creation of other jobs, which helps improve economies and raise the standard of living in these areas.
Small and Midsize Businesses
Small and midsize businesses are leveraging outsourced engineering services to compete with the big players. Product development or R&D is commonly outsourced because it often takes significant financial investment (huge fixed infrastructure costs, for example), time and effort to put together development teams that will bring a product to market. All this can reduce the flexibility of startups and organizations that are expanding into a new market. Some service providers specialize in providing R&D services to SMBs in specific sub-segments, like the machine-to-machine (M2M)/Internet of Things market. Outsourcing delivery models are often flexible and suited to the changing needs of SMBs and companies working with tight budgets and deadlines. For example, the vendor may charge only for the actual hours of work. Flexible pricing plans from engineering outsourcing vendors help small businesses break even in only a few months instead of many years.
Large Enterprises
Large organizations that have the resources to develop and test products in-house may opt to outsource some engineering processes to gain a competitive advantage while reducing costs. Most large businesses have captive centers in multiple offshore locations, but they continue to work with third parties to access highly skilled, but less expensive resources. Large companies are more likely to adopt end-to-end engineering process outsourcing engagements, wherein the service provider is responsible for the entire engineering process, from design and prototyping to manufacturing in some cases.
The Rise of Engineering Process Outsourcing: Changes and Trends
The fast-growing engineering services outsourcing market is being driven by many disruptive changes. The rise of intelligent products, convergence of third platform technologies, and faster speed-to-market are fueling growth and pushing companies to seek partnerships with engineering process outsourcing providers. Analysts predict that EPO will continue to evolve and mature in 2015, setting the stage for future growth. Significant market growth is expected as EPO is expected to help improve process efficiencies and give organizations the differentiation they seek. Intelligent Products This has often been described as the age of intelligent products and services. Companies are investing heavily in R&D due to the demand for embedded electronics and software, which are needed to create “smart” devices. Smart devices are popular because they give firms a competitive edge. To keep up with demand, EPO providers are extending capabilities in terms of R&D and embedded software development. Some industries that are increasing their use of outsourced engineering services include high tech, consumer electronics/software and automotive. Third Platform Technologies The convergence of social mobility, analytics and cloud are further transforming products and services. Intelligent products generate large amounts of data that provide valuable insights to both consumers and manufacturers. EPO providers are beefing up their analytics services to turn these insights into value for their clients. Faster Speed to Market Faster speed to market is one reason companies outsource engineering services. Today’s products come to market at a breakneck pace, increasing the demand for EPO services. New products in turn make old systems obsolete, fueling the outsourcing of engineering services to support legacy systems. Changing customer behavior has also forced companies to innovate faster and develop new products. Pressure to Reduce Costs Cost reduction remains a major driver of ESO growth. Companies realize that they can improve and extend internal capabilities by working with outside specialists. Outsourced engineering allows organizations to maximize their resources and divert them to more critical and strategic tasks. Needs of Emerging Economies Companies in emerging economies have their own unique product development needs, and EPO providers are stepping up to provide flexible and frugal engineering solutions. Both developed and emerging countries are increasingly outsourcing engineering services to access skilled engineering talent, access innovative technologies and processes, take advantage of investment-oriented political climates, and reduce costs. Asia-Pacific was the ESO leader in 2013, contributing over 50 percent to the overall market. The region is expected to experience the highest growth until 2020. Europe is also set for the rise of ESO, as many European companies prefer to outsource engineering services within the same country or region for better regulatory compliance. Needs of Various Industries Telecommunications, consumer electronics, automotive, pharmaceuticals, semiconductors, construction and aerospace are industries that outsource specific engineering tasks. A study published in 2014 showed that original equipment manufacturers (OEMs) in the aerospace and automotive industries are strengthening their partnerships with ESO vendors because of the crucial need for R&D and other related activities. Third parties provide aerospace companies avionics, aero engines design, aero systems and interiors, aero structures design, and manufacturing services. Engineering outsourcing in the consumer electronics sector will experience the fastest growth due to reduced product life cycles and a need for faster product innovation. Demand will also increase in the pharmaceutical sector for outsourced services like prototyping, value analysis, and preclinical testing. Meanwhile, telecoms firms continue to depend on engineering service providers for business support systems, infrastructure, and back-end expertise. Specific services include geographic information systems (GIS) systems, cloud engineering services, network testing, design and implementation, and product lifecycle management (PLM). In the construction segment, CAD, structural design, building information modeling, and project management continue to be in-demand.
Getting Started on Engineering Outsourcing in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES CAD Creation & Conversion When Outsourcing Engineering Tasks May Be the Best Step for Your Business POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ When Outsourcing Engineering Tasks May Be the Best Step for Your Business ]]> Sourcefit Philippines Outsourcing Blog: When Outsourcing Engineering Tasks May Be Best for BusinessEngineering activities form the backbone of many industries, from manufacturing to aerospace. The creation of new products drives business growth, turning the engineering sector into a massive market. Many companies spend about 4 to 10 percent of revenues on engineering services alone. A study estimated that global spending on engineering services in 2012 amounted to $930 billion, with a 1-2 percent compound annual growth rate. The market is projected to reach $1 trillion in revenues by year 2020. Engineering process outsourcing is the transfer of responsibility for an organization’s architecture, engineering and construction functions to a third party. Studies show that about 36 percent of companies outsource some engineering services, while 31 percent and 16 percent of companies outsource research and development (R&D) and product design, respectively. Engineering process outsourcing has been growing steadily due to the many challenges that companies face. Building and maintaining internal engineering capabilities are some of the most expensive items in an organization’s budget. There is also the pressure to accelerate time to market, the issue of high fixed costs during peak product development periods, and the shortage of qualified engineering talent. These challenges can overwhelm small and midsize business with limited resources and delay projects for larger businesses.
Why Companies Outsource Engineering Services
Many businesses work with experienced third parties to source engineering talent, improve internal engineering processes, and access the latest technology while controlling costs. Cost reduction is still the number one reason companies outsource their engineering activities. Most firms start with cost reduction in mind, and then extend their outsourcing campaigns for more strategic reasons. For example, a study showed that General Motors (GM) outsources engineering work to help reduce costs, while Toyota outsources product development to reach new markets and improve quality. Analysts predict that strategic engineering process outsourcing will prevail over time, as companies squeeze more out of their outsourcing engagements to gain more value, drive innovation, and speed up time to market. Traditional engineering services powerhouses like the United States, Germany and Japan are already facing stiff competition from emerging economies which remain as cost-effective alternatives to developed countries struggling with skill shortages. Key industry verticals that outsource engineering services include architecture and design, industrial equipment, oil and gas, automotive, utilities, and high tech. Each vertical has similar but unique drivers for outsourcing; the automotive industry mainly wants to reduce costs, access domestic markets and address skill shortages, while the construction and aerospace industries want to address skill shortages, reduce costs and speed up time to market.
Engineering Services Outsourcing Providers
The engineering market is going the way of the IT outsourcing market. Engineering process outsourcing today is moving from a process-defined approach to product excellence and business transformation. Established players have moved beyond filling critical engineering positions to providing continuous process improvement and innovation, standardized systems, data and software, advance analytics, and more value over time. Large engineering service providers are being challenged by smaller companies that provide high-value engineering talent. Those that can provide end-to-end capabilities are in high demand. Top outsourced engineering service providers are expected to absorb most offshore high-end contracts, mainly due to sheer scale in terms of labor force and technological capabilities, and also strong infrastructure, cultural compatibility with the West, English proficiency, and IP protection laws. Third parties that provide low- to medium-end engineering services are still in the game, however, and will continue to attract companies looking to reduce costs.
Engineering Tasks That Can Be Outsourced
Engineering process outsourcing encompasses both engineering services and functions. Engineering services include planning, design, and consulting work that support physical engineering tasks. Engineering functions refer to actual, physical engineering activities. Designing forklifts is an engineering service, while building forklifts is an engineering function that third parties typically do not perform. Engineering service providers usually focus on providing design, consulting and management services, and rarely take on building, manufacturing or construction tasks. Engineering services providers are expected to gain a larger share of the engineering outsourcing market. Engineering tasks that are often outsourced include: Research and Development (R&D) R&D or new product development is the number one engineering service that organizations outsource. Studies show that almost 40 percent of small and midsize businesses outsource R&D. The main driver for R&D outsourcing is faster speed to market, access to superior engineering talent, better quality products, and improved regulatory compliance. Key players are more likely to offer end-to-end services that cover all stages of the product development cycle, from concept to manufacturing, while smaller, niche providers are likely to offer low-end or specialized R&D services, such as hardware/software solutions. R&D services include conceptualization (converting marketing requirements into concepts, styling, and packaging design), creation of feasibility studies, design optimization and validation, value engineering and virtual simulation, modeling, simulation and implementation, product engineering, and product manufacturing. Not all third parties undertake product manufacturing; it can be outsourced to another provider or performed in-house. CAD and Drafting Computer-aided design (CAD) and drafting are second only to R&D as the most commonly outsourced engineering service. CAD and drafting tasks include conversion of paper blueprints into electronic CAD drawings for easier retrieval, editing, sharing and archiving, conversion of 2D drawings to 3D formats and vice versa, creation of concept drawings, modeling, and prototyping. The outsourcing of CAD/CAM and drafting was especially common about a decade ago, when engineering services outsourcing was in its infancy. Back then, CAD and drafting outsourcing was done in a piece-meal way, but companies soon started subcontracting core, knowledge-driven design work to service providers to squeeze more value from the outsourcing contract. Building Information Modeling (BIM) Advanced 3D modeling technology has enabled service providers to create even more complex systems for their clients. Building information modeling (BIM) is one example. BIM is a 3D model-based process used in analysis and the design process. BIM generates accurate visual representation of a building or facility and extends building information to five dimensions, including time and cost. BIM software interprets the design as a combination of model elements, each of which contains attributes that provide cost estimates and other information. BIM allows virtual information sharing among all participants in a construction project, including the design team, the client and service provider. Accurate visual representation also allows builders to monitor operations easily and determine the real world implications of building construction. Reverse Engineering Reverse engineering or back engineering is the process of capturing data from a finished product and using the data to reproduce the original or an entirely new product. Reverse engineering can be applied to products that range from electronics to computer software. The process usually involves taking apart the system and analyzing its components. The engineer generates a CAD model of the physical object using 3D scan or traditional measuring techniques. Scan data can be easily converted into a model that matches the original product’s design features. Reverse engineering service providers obtain CAD data, design new components to fit the original parts, redesign components with manufacturing defects, update CAD models as needed, and improve manufacturing process efficiency. Product Lifecycle Management (PLM) PLM is both software technology and business strategy. Companies offload project or product lifecycle management to an outside expert that manages the product throughout its evolution, from the design stage to the disposal stage. The provider may manage the company’s entire product portfolio, data and processes, as well as offer consulting, support and IT services to identify and implement process improvements. Some providers specialize in the creation and centralized management of data and technology used to access the data. Document Management Document management is another service that can be outsourced to service providers. Electronic document management systems (EDMS) software provided by third parties is a comprehensive solution for the administration, operation and management of engineering documentation. Service providers may also offer document management systems consulting and implementation to improve process efficiency and data security. Value Management and Benchmarking Value management and benchmarking are cost reduction measures that focus on value drivers such as quality, safety, and time. Service providers can help companies extract more value from their implementation projects with value management services that execute projects within time and budget constraints. Value management and benchmarking services can also help managers identify the right projects and opportunities, track and optimize progress during implementation, and measure performance against industry peers. Engineering Consulting Outsourced engineering consulting allows businesses to address challenges by developing strategy and roadmaps and reinventing engineering processes. The goal is to improve ROI and engineering process efficiency, and align technology adoption with business results. Consulting services vary by industry. For example, in the geotechnical sector, service providers offer geological and feasibility studies, design recommendations, materials specifications, and review and sample testing. In the environmental sector, providers offer environmental site assessment, groundwater sampling, natural resources evaluation, and HAZMAT studies.
Getting Started on Engineering Outsourcing in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES CAD Creation & Conversion Who Can Benefit from Engineering Process Outsourcing? POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Outsourced Marketing That Works: Finding the Red Flags and the Right Fit ]]> Sourcefit Philippines Outsourcing Blog: Outsourced Marketing Red Flags and the Right FitOutsourced marketing is powerful tool for building a lean, efficient and competitive business, but it remains an option, not a necessity. Outsourcing won’t have the same impact on different companies with different goals, and sometimes it is simply the wrong approach to take. But when done properly, outsourced marketing can transform an organization.
Benefits of Outsourcing Marketing
Here are some benefits of outsourcing your organization’s marketing functions: Focus on the customer. Marketing campaigns are designed to be customer-oriented, but in-house marketers feel the pressure to be corporate-oriented, shifting the focus to the brand. When you outsource marketing, there is a buffer between management and marketing staff, keeping the focus of the campaign where it belongs—on the customer. Better prepare for emergencies. Marketing service providers are prepared to handle contingencies. They have systems in place to deal with emergencies and can bring together people, resources and the appropriate technology quickly and efficiently. The outsourced marketing firm can thus be more dynamic and flexible than the in-house team in terms of adapting to changing needs. Access to integrated disciplines. When you hire a single provider to handle multiple marketing functions, you benefit from an integrated approach. Having several marketing specialists on one team that works together all the time fosters a shared marketing philosophy and unified objective. Instead of dealing with discrete functions like direct mail, PR and advertising, the outsourced marketing team is able to look at the whole process objectively. Free up resources and share risk. By outsourcing a marketing function, companies can divert resources to activities that add value to the firm and enable them to focus on the customer. And because financial, market, and economic risks are shared between client and provider, the organization can be more flexible. Speed up reengineering. If internal marketing processes are not working as they should or keep producing poor results, reengineering may be necessary. Reengineering takes time, and the best way to speed up the process and realize benefits as quickly as possible is to work with a third party provider. Access to resources. Many companies outsource marketing to gain immediate access to funds, technologies and facilities required to perform these functions efficiently. While this is a sound solution for short-term needs, long-term or strategic decisions to outsource marketing should be based on a cost/benefit analysis. Control costs. Marketing service providers have the knowledge and processes to perform certain functions more efficiently and affordably. Because these vendors have gained economies of scale, they can share the benefits to others and make a profit. Reduce HR-related issues. When you work with a third party marketer to source marketing talent or hire marketing consultants/freelancers, you don’t have to deal with HR problems such as staff disputes, worker’s compensation, sick leaves and termination issues that come with hiring full-time, permanent onshore employees. Flexible staffing. Service providers understand that organizations may not always need full-time marketing specialists. Providers develop custom, flexible staffing plans that change based on business need and market cycles. You can hire one or two people, build a team or an entire marketing department. Outsourcing makes perfect sense if you want the job to be done well, but it does not require full-time attention. Access to specialized marketing expertise. Can’t find the marketing talent you need locally? Working with an offshore provider may be the best solution. If certain marketing expertise tends to be hard to find in one location, the service provider can easily source these talents elsewhere and bring them to you. Save on recruitment time and expenses. Traditional recruitment is time- and resource-intensive, requiring someone to write and post want ads, review applications, screen candidates and make follow-up calls. The whole thing can be impractical if all you need is one marketing specialist. It’s better to work with a third party marketer either for sourcing talent or performing the marketing function.
Red Flags when Outsourcing Marketing
There are many ways to market your brand, product or service. There is the traditional way of building a marketing department from the ground up and hiring full-time marketing specialists. Another way is to delegate some marketing activity to staff that you already have in-house. The third method, outsourced marketing, is hiring a third party to do some or all of your marketing activities. Some companies prefer to keep everything in-house, including brand promotion and traditional advertising. There are many reasons for this; executives may believe that the best work can only be done in-house and hiring an outside expert is simply ineffective for the campaign they want to undertake, or that marketing is one of the company’s core strengths. For companies that have outsourced marketing before and experienced less than stellar results from a problem provider, it makes sense to be wary of farming out promotional activities. If your organization has never outsourced marketing functions before but you are aware of the potential benefits, keeping an eye out for red flags can save you from major outsourcing headaches: 1. Unrealistic expectations in terms of return on investment (ROI). Some service providers promise the world, and some companies are inexperienced enough to believe them. When you outsource marketing or any process to an outside party, it’s best to keep your expectations realistic. One of the biggest mistakes you can make is to think that outsourcing will solve all of your problems and magically improve the bottom line. Building a solid customer base, maintaining good customer relationships and increasing revenues take time, whether you outsource or not. 2. Poor management of the outsourcing project. Outsourced marketing is a partnership with shared responsibilities, and you are expected to pull your own weight when it comes to marketing decisions and other important activities. Outsourced marketing staff manages their own work, but they can’t be expected to manage your business. In fact, experienced firms assign top-level CMOs to manage and constantly monitor external marketing projects and outsourcing campaigns to ensure that they get the most out of the partnership. 3. Outsourcing every marketing function too soon, including core activities. Outsourcing can slash operating costs, so some CMOs decide to outsource every marketing function at once and often without careful planning, leading to problematic outsourcing relationships. CMOs should start the outsourcing process gradually with non-core marketing functions like telemarketing or digital marketing, and set clear and quantifiable management goals. If the initial project is a success, you can start outsourcing parts of your higher-value marketing activities, like data analytics. 4. Picking the wrong location. Companies looking to offshore marketing functions may think that all low-cost locations are the same. As long as there is high-speed internet, they reason, it’s all good. However, cost and connectivity are just two factors. You have to consider language and cultural compatibility as well. It’s no good to work with a marketing team that you can’t communicate with properly. 5. Focusing on cheap labor. Outsourcing won’t work if your virtual team is unhappy, or you see outsourcing as a cheap way to shore up your in-house team during difficult times. Hire both external and internal staff based on the same basic principles and be responsible for their personal growth. 6. Being inflexible. Being rigid with budgets, expectations and management can sink your outsourcing project. CMOs should adopt a dynamic outlook and plan for contingencies. For example, don’t assign a person who is insensitive to cultural differences to manage your virtual team. While the outsourced team will always try to adapt to your situation, success depends on mutual respect.
Marketing Process Outsourcing: Finding the Right Fit for Your Business
The key to a successful outsourced marketing project is to treat the service provider as a partner to long-term success, instead of someone who happens to provide a necessary service during an economic downturn or a corporate cost-reduction initiative. The ideal marketing outsourcing partnership aims to improve long-term quality and efficiency rather than just reduce overhead costs. When looking for the right outsourced marketing partner, consider the following factors: Solid Case for Outsourcing Understand why you need to outsource marketing in the first place. Is it because you need to cut costs, bring in marketing expertise, revamp your marketing campaign, or all of the above? Examine your current marketing setup, including the number of employees and who performs what. Determine whether outsourcing a certain marketing function will improve quality over the long term. Once you have built a solid case for outsourcing, gather support from the higher ups and start your search for the right service provider. Ask for recommendations from your networks and do your research before making phone calls. You should be able to narrow down your initial list to a few companies you feel would be a great fit. Long-Term Value While it’s important to stick to your outsourcing budget, remember that you usually get what you pay for. There’s a reason why some marketing firms charge more than others. They may have been in the business for a long time and have proven a track record with multiple companies in various industries. The company may also specialize in a particular marketing function, like research and analytics, that requires a higher level of expertise. Consider the value the service provider is offering over the long-term and not simply short-term gains. Sound Marketing Strategy and Processes The right marketing service provider has a clear strategy and established processes to engage prospects and promote your brand, product or service through whatever channel you need. This is especially important if your internal marketing process delivers poor results and needs to be reworked.
Building your Outsourced Team in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES Developing a Marketing Service Outsourcing Strategy: Case Studies & Success Stories 5 Major Signs It's Time to Consider Outsourcing Marketing Marketing Process Outsourcing: Case Studies, Business Model & Talent Availability Assessment Should You Outsource Marketing? Outsourced Marketing: Industry Overview, Services and Process Flow Search Engine Marketing Online Content Moderation Case Studies Search Engine Optimization and Marketing Case Studies POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Developing a Marketing Service Outsourcing Strategy: Case Studies & Success Stories ]]> Sourcefit Philippines Outsourcing Blog: Marketing Service Outsourcing Strategy & Case StudiesMarketing strategy aims to increase sales and boost the long-term competitive advantage of a business. A marketing strategy or plan is a composed of actions to be done over time to achieve your marketing goals. This includes activities like internal and market analysis, development, testing, contingency planning, and selection of the right strategy.
Outsourced Marketing Strategy
Marketing strategy development typically begins with an analysis of your business and market, taking into account economic, political and technological factors, and identification of strategic issues. While most marketing plans cover many years, shorter plans are gaining traction due to a fast-paced merchandising environment. Strategies can be dynamic to allow the firm to adapt to sudden changes while not losing focus on the goals. The process of coming up with the right strategy for your business can take a lot of time. The right fit depends on the type of market. A marketing strategy that is successful for a new business may not be appropriate for a more established firm in a mature market. Strategy development requires the services of professionals with in-depth understanding of your business and industry. However, hiring full-time professionals requires a significant investment, especially for smaller businesses or those exploring new markets. Even firms with internal marketing departments may need to offload some strategic marketing functions to be able to focus on more important tasks. Marketing strategy is a critical but non-core task that an increasing number of organizations, mostly SMBs, are farming out to marketing service providers. For a company that lacks resources or an established brand expanding into new territory, building an in-house marketing team and hiring top marketing strategists can be costly and impractical. Working with a third party saves your business from the expenses of hiring full-time staff, as well as recruitment and training time.
Marketing Strategists
Business owners understand the need to market their products to drive growth, and at the same time keep a close eye on the marketing budget. CEOs are asking their marketing staff to take on more responsibility for improving customer engagement, retention and satisfaction. Marketers today must captivate their target audience using multiple channels, while delivering a seamless, personalized customer buying experience. This is true for both small and large businesses, but an organization that lacks marketing talent is more likely to experience challenges that limit growth. Many organizations are unprepared for the time and resource investment this entails. The result is a performance gap in strategy, skills and technology. A recent study reported that more than 90 percent of companies lack digital skills, while only 4 percent align their training toward the digital strategy. Third parties are stepping in to fill this gap through the provision of outsourced marketing services. Third parties work globally, so clients can leverage expertise, technology and talent wherever they may be located. Marketing service providers can give you access to a full-time chief marketing officer (CMO) or an entire team of marketing experts, at a fraction of the cost of doing recruitment in-house.
Accessing Marketing Talent and Technology
Traditional and digital marketers appear to clog the job market, but top marketing talent that fits your business is in limited supply. Forrester research showed that 44 percent of marketing leaders say that they cannot find the right people with the right skills. The majority (96 percent) also believes that the skills required to be a successful marketing professional have increased. Effective marketing strategists are both creative people and data analysts who have in-depth understanding of marketing metrics and make decisions based on facts. They are able to adapt to an increasingly complex market, changing customer behaviors, multiple engagement channels, and competing business demands. In addition, they are also financially savvy, focusing on ROI with each marketing project. In the real world, many marketers struggle to deliver ROI-driven marketing activities, such as measuring buying effectiveness as a function of a digital marketing campaign. Too often, the CMO or marketing strategist loses focus on the core marketing activity because they assume multiple roles. Outsourcing marketing strategy transfers the responsibility to an outside expert with defined management guidelines, relieving the business of cost and risk burdens while delivering topnotch results. Outsourcing marketing strategy means immediate access not only to one skilled person, but an entire team of marketing experts. Along with a strategist, you get content experts, designers, web developers and data analysts who have access to the latest tools and technology. An outsourced marketing model that combines talent, technology and strategy is ideal whether you run a new business or have been in the industry for many years.
Offshore Marketing Strategists
Outsourcing marketing strategy to an offshore service provider is a good option for organizations looking for maximum savings. Offshore marketing strategists have the same qualifications as local professionals, but the total cost of hiring them is significantly lower. With flexible solutions, any business can hire permanent or contract staff and scale up or down easily. Another benefit of outsourcing your marketing strategy to an offshore provider is the fresh perspective that comes from an objective viewpoint. A service provider is free to question assumptions and theories without being constrained by bureaucracy. To ensure the success of your campaign, work closely with an experienced offshore marketing service provider with a proven track record in ROI-driven marketing strategy. Look for an offshore provider that offers cross-sector expertise and in-depth understanding of a wide variety of marketing disciplines, including market research and business intelligence, data/big data analysis, campaign planning, execution and measurement, and budget planning and management.
Outsourced Marketing Case Studies and Success Stories
U.S. Healthcare Firm A leading healthcare company based in the United States realized the benefits of marketing outsourcing when it partnered with an experienced third party to manage its web presence. The company is one of the biggest providers of Medicare in the U.S. It offers healthcare insurance and other health and wellness services using an integrated approach to well-being. In only five years, the company acquired seven additional brands, which led to a weaker core brand and reduced memberships and renewals. The company wanted to revamp its online presence completely, strengthen the brand, and deliver a personalized customer experience through the integration of its multiple online channels. The firm chose an established marketing outsourcing service provider to redesign and consolidate its web operations and improve customer satisfaction through a more personalized engagement approach. The service provider leveraged its expertise in digital transformation and user experience management to increase customer satisfaction and reorganize the company’s digital assets. The result of the partnership was a unified, customer-centric online experience with an emphasis on personalized content. The healthcare company now has a single online portal for all its products and services, with an improved selling ability and increased customer satisfaction. Italian Food Products Business An Italian food products manufacturer, operating 16 production plants and employing over 7,000 people, wanted its marketing function to be more dynamic and aligned with the needs and lifestyle of its younger customer base. The company wanted to engage this segment through online marketing and social media as well as improve brand visibility to encourage customer loyalty. The company worked with a third party marketing services outsourcing provider to create and manage digital content for its multiple mini websites. The interactive minisites promoted food products in a fun way that engaged their target demographic. More content and targeted promotion meant higher traffic, which the project team handled by organizing the site by role and area of interest. The content of the website changes in real time based on visitor selections. By working with an experienced marketing provider, the food products manufacturer improved brand health monitoring by 100 percent, improved the company’s social media presence by 100 percent, increased sales with electronic coupons and increased the speed of communication between the company and its customers. One of the company’s project managers said that outsourcing marketing services to a third party helped the business make better use of internal resources and reinvent business-wide customer engagement through the use of innovative technology. Canadian Shipping Company A shipping company based in Quebec used marketing services outsourcing to boost growth and return on investment. The company wanted to generate brand awareness and present their value proposition to their target market. They worked with a third party provider specializing in B2B marketing for an effective and measurable solution. After an in-depth analysis of the company and industry, including interviews with customers, the outsourced marketing team created a marketing strategy that improved the company’s competitive advantage. The team also developed a tactical plan to generate the biggest ROI. By working with a third party, the company increased its new customer acquisition rate by more than 80 percent. It also increased website traffic by over 50 percent and improved SEO ranking for target keywords. Toronto Law Firm A Toronto-based law firm specializing in employment law worked with a marketing services outsourcing provider to implement an effective marketing strategy that will increase awareness and generate leads. The marketing service provider updated the company’s brand identity to ensure a consistent presence. They created a new website, logo, marketing collaterals and a referral program to drive lead generation. With the new collaterals, the company gained a fresh, professional identity and a framework for lead generation activities.
Getting Started with Outsourcing in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES 5 Major Signs It's Time to Consider Outsourcing Marketing Marketing Process Outsourcing: Case Studies, Business Model & Talent Availability Assessment Should You Outsource Marketing? Outsourced Marketing: Industry Overview, Services and Process Flow Search Engine Marketing Online Content Moderation Case Studies Search Engine Optimization and Marketing Case Studies POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ 5 Major Signs It's Time to Consider Outsourcing Marketing ]]> Sourcefit Philippines Outsourcing Blog: Signs It's Time to Consider Outsourcing MarketingShould you keep marketing functions in-house or hire a third party to do it for you? Each option has its pros and cons, and it’s up to the manager or chief marketing officer to determine whether a marketing activity would be more affordable and efficient to perform internally or outside the company. If you’re having a hard time deciding, consider the following situations when it might be time to work with a service provider.
Does this Sound Like You? Maybe it’s Time to Consider Outsourcing Marketing
1. Revenue growth is slowed or stalled. While your marketing department is not the only factor that drives revenue growth, a service provider can help jumpstart or boost growth by performing some of your in-house marketing activities. One of the measures of a successful marketing campaign is a positive return on investment (ROI). Many vendors use ROI to improve bottom line performance when providing outsourced marketing services. At the very least, your CFOs can understand how much revenues are generated for the amount invested in the outsourcing engagement. If you are already measuring revenue growth in terms of marketing spend and you are still experiencing sluggish growth, working with a service provider may be the best solution. 2. Your marketing processes are sloppy and improvised. It’s true that any marketing department can throw together a promotional campaign, but often it’s not the best one, especially if your staff is overworked and used to cutting corners. Ideally, a marketing campaign is a series of activities that include brainstorming, thorough market research and repeated testing, ending up with the best product that is implemented gradually. If your campaigns are always makeshift or poorly designed, working with an outsourced marketing provider can optimize your marketing process and maximize your resources. 3. Work volume is always high. Marketing departments experience slow and busy times. However, if you feel that you and your marketing staff are always stressed and pressured to keep up with deadlines and the constantly high volume of work, it’s a good idea to hire outside help. A marketing service provider can perform some of the tasks as well as help you keep up with marketing strategies that drive competitive advantage. You can even hire the marketing firm to perform research and analytics for you so your staff can focus on critical projects. 4. Your marketing department is understaffed. Many firms only have a few dedicated personnel to perform all marketing activities of the entire organization. As a result, personnel may perform tasks that are outside their purview or expertise, leading to problems such as slow turnaround times and reduced productivity. It makes sense to hire a marketing service provider either to provide additional marketing staff or perform specific marketing functions. If you don’t have the budget to hire full-time employees, like many startups and small and medium-sized businesses, you can work out an arrangement with the vendor to provide the necessary talent, resources and expertise based on your current business needs. 5. Despite your best efforts, you still experience poor results. If you are seeing a consistent trend of poor results despite putting in your best efforts, it might be time to let an outside expert handle everything. A marketing service provider is easier to work with than a full-time employee. You can end the outsourcing engagement if you still get the same substandard results, whereas you may need to fire a full-time employee that performed poorly and deal with additional issues associated with termination. Marketing service providers offer a wide variety of contracts and most develop custom solutions that fit your budget and goals. This means that you don’t have to choose from ether internal or outsourced marketing; you can choose to farm out certain marketing functions gradually, staring with non-core activities and then moving on to higher-level when you feel comfortable and there is an urgent need to improve processes.
7 Great Reasons to Outsource Marketing
Companies know that they need marketing to move products and generate revenue, but few have the perfect mix of talent, expertise, technology and well-designed strategy to take marketing to the next level, improve the bottom line, and deliver consistent, high-quality results. Some firms believe that a well-run marketing campaign requires a massive budget that only large, established organizations can afford. On the contrary, the best outsourced marketing engagement does not have to tax your limited resources. Besides improving marketing processes and increasing revenue growth, here are top reasons to outsource marketing: 1. Improve focus. Performing all marketing functions internally is not uncommon for larger organizations or those that have the budget for a well-run marketing department. However, startups and firms that have limited resources and a handful of marketing staff find that all-internal marketing can be a stressful undertaking. By outsourcing some functions to an experienced third party, you and your staff can focus on core activities and doing what you do best, like developing new products or refining your promotional strategy. 2. Expand your audience. Internal marketing efforts may limit your marketing channels to one or two. For example, a brick and mortar store may only rely on traditional print advertising to move stocks, while an e-commerce startup may depend only on SEO (search engine optimization) and cheap digital marketing techniques to promote their business. Limiting your marketing channels robs you of the opportunity to reach a wider audience. Marketing vendors are often experienced in a variety of marketing channels that can expand your reach and increase conversion. 3. In-depth understanding of buyer behavior and market trends. Research and analytics are critical to figuring out how your customers tick, what the competition is up to, and how to outperform them. While these are core marketing activities, many companies prefer to outsource market research and data analysis to outside experts that can do the job better and at a lower cost. 4. Access world-class marketing capabilities. It’s expensive to build a high-performing marketing department from the ground up. Besides finding top-level talent, you need to compete for and compensate them highly, especially in certain locations. Most SMEs and even some large organizations simply don’t have the resources to do this. Instead, they hire a marketing firm that has the high-quality staff, leading-edge technology and advanced capabilities to provide world-class results, but at a significantly lower cost. 5. Control costs. Hiring a third party marketing firm allows organizations to divert resources to revenue-generating activities and convert fixed capital investment into variable operational expenses. The lower cost structure that service providers offer is one of the top reasons for outsourcing marketing functions. More savings can be achieved if the vendor is located in an emerging economy. 6. Optimize marketing strategies. Many firms have no solid marketing plan that delivers consistent results. Instead of depending on your internal marketing team, it’s better to hire an experienced third party that already understands your market and knows which strategies best fit your business. Look for a service provider with a proven track record in your industry to develop and test these strategies. If you are uncomfortable with a long-term outsourcing engagement, ask the vendor to work on a small research project or study, and build up gradually when you are satisfied with their performance. 7. Share risk. Outsourced marketing allows companies to transfer some risks to the service provider, such as disruptions caused by new technology, fluctuations in price and demand, mergers and corporate restructuring, and poor results. When you keep all of your marketing activities in-house, you alone are responsible for dealing with issues when they arise. Working with a third party, on the other hand, means joint responsibility.
Building your Outsourced Team in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES Marketing Process Outsourcing: Case Studies, Business Model & Talent Availability Assessment Should You Outsource Marketing? Outsourced Marketing: Industry Overview, Services and Process Flow Search Engine Marketing Online Content Moderation Case Studies Search Engine Optimization and Marketing Case Studies POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Marketing Process Outsourcing: Case Studies, Business Model & Talent Availability Assessment ]]> Sourcefit Philippines Outsourcing Blog: Marketing Process Outsourcing Case StudiesBoth SMEs and large, global corporations have experienced the benefits of marketing process outsourcing. A global financial services provider with offices in more than 50 countries, for example, recently outsourced social media monitoring services to a major service provider. The company already has systems in place to monitor traditional marketing channels (newspaper and print coverage), but lacked expertise in social media to drive an effective communication strategy. So they worked with a third party to provide a comprehensive outsourced solution that will reduce complexity and costs. The service provider developed and managed the social media monitoring strategy and integrated the new system into the organization. Procter & Gamble (P&G), another established company with a global presence, outsourced consumer research and analytics to a third party provider. The consumer goods manufacturer wanted to improve the quality of its virtual solutions program while scaling up and reducing costs. The service provider used virtual reality centers around the world to develop, test and optimize virtual product packaging, shelving layouts and store designs for the company. As a result, P&G’s product design activities were completed in days instead of months and allowed the company to save money on physical store designs. An offshore marketing service provider kept clients happy by focusing on value and improving quality. The service provider keeps local marketing professionals to handle online marketing, content development and campaign management in-house for their clients. They also found experts for specialized tasks like research and data analytics. This combination approach and an insight-based strategy allow the company to deliver high-quality marketing services consistently. British mass media firm Guardian News & Media (GNM) has also jumped on the MPO bandwagon, outsourcing advertising, sales support design, presentation and events marketing to a design agency. GNM also outsourced production of commercially-funded supplements, ads and microsites to a service provider. Not all functions were outsourced, however. GNM held on to the production of promotional material like the Guides booklets as well as editorial control of all commercial publications. A representative for the firm said that working with an outside expert will lead to more flexible and responsive marketing and design services for GNM.
Will Marketing Process Outsourcing (MPO) Work for your Business?
There are three ways to do promote your brand, product or service: do it yourself, build an in-house marketing department, or hire outside experts to perform the work. Outsourcing, no matter how attractive, is always an option, not a requirement. The “best” method depends on the situation and your business goals, budget, and an honest assessment of your needs. Due to limited resources, small business owners and entrepreneurs often learn do to marketing and promotion themselves (at least initially) or hire a freelancer on a temporary basis to do the work. Larger businesses and more established organizations can afford to build an in-house team from scratch, but the right way to do marketing still depends on the circumstances. Most businesses never outsource all marketing functions; instead, they tend to outsource non-core functions and hold on to core marketing activities. They also adopt a combination approach of in-house marketing, outsourced marketing and DIY. Sometimes, it makes perfect sense for managers to just take on a fairly routine marketing activity because they have time on their hands or they feel that only they can execute their unique vision. But even if you’re running a one-man team and digital marketing is right up your alley, hiring a marketing professional or working with a service provider could be a better business decision. A lot of factors should go into the decision of who should be in charge of your marketing activities. The type of business, the industry, you financial situation and current market conditions are just some of the things to consider. Whichever method you choose, it should be rationalized and backed by cost/benefit analysis. The ultimate goal is to achieve long-term value and quality improvement, whether you outsource, perform everything in-house or embrace a combination approach. Business Model Your business model is one of the most important factors that impact the decision to outsource or not to outsource marketing. If marketing is a core activity and marketing strategy drives your business model, building an in-house marketing department to perform these functions is a reasonable option. For example, an established retailer moving very high volumes of products each year is more likely to benefit from having a team of dedicated internal marketing professionals that cover all marketing channels (print, TV/Radio, online). On the other hand, small online retailers, whose business depends largely on digital marketing, should educate themselves about search engine marketing and social media marketing, even if they eventually plan to outsource these functions to an ad agency or third party firm. The key is to focus on what you do best (whether it is creating products or engaging customers), keep mission critical business activities close to the chest, and farm out marketing activities that other people can perform better and more affordably. As an entrepreneur, your time is valuable. If you spend more time doing SEO or customer analytics instead of developing new products or honing your competitive edge, you are way overpaid. Availability of Talent But what if you have zero budget and unlimited time, like many first time business owners? In this case, DIY is your best option. As entrepreneurs who built their own websites, cold-called prospects, and became part-time bloggers/vloggers to spread brand awareness have demonstrated, it can be done. If you are your only employee, then it follows that you should teach yourself marketing and how to develop a promotion strategy. There are hundreds of good (and free) online tutorials on digital and traditional marketing, from managing multiple social media accounts to building a mailing list and creating marketing collaterals for distribution. There are even videos that will teach you to understand customer behavior and tap the power of data analytics. If you have other people on your team besides yourself, and you have the budget to hire marketing professionals, the first thing to do is to evaluate your current marketing situation. Is someone already doing marketing (and doing it well)? Or is that person overwhelmed with too much work? If you hire someone else to do the job, will the quality improve? Remember that you will still have to spend time on management and oversight even if you have additional people on board. For those who can’t find marketing talent locally, outsourcing the job to a service provider can be the right solution. Many service providers operate on a national level, and some on an international level. This means that they can draw on their extensive networks to source marketing talent and bring them to you. If you decide to hire an offshore service provider, don’t be blinded by cost. Consider time differences, connectivity, language and cultural compatibility. You’ll find that outsourcing brings its own set of challenges to the table. For the outsourcing project to succeed, you should be prepared to meet these challenges and adapt to changes.
Outsourced Marketing in Action
The development of an ideal marketing strategy is a process. It starts with multiple concepts that are tested over time and monitored. The best concept is then chosen for adoption. Whether you decide to build an in-house marketing team or outsource marketing to a third party, keep in mind that the best campaign is not slipshod or built on guesswork. To improve the quality of a process and achieve value over time, marketing should be carefully planned, executed and monitored.
Building your Outsourced Team in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. RELATED PAGES Should You Outsource Marketing? Outsourced Marketing: Industry Overview, Services and Process Flow Search Engine Marketing Online Content Moderation Case Studies Search Engine Optimization and Marketing Case Studies POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Should You Outsource Marketing? ]]> Sourcefit Philippines Outsourcing Blog: Should You Outsource MarketingOutsourcing marketing functions can be the right decision for some companies, but not every company. The role of managers and chief marketing officers is to determine whether outsourced marketing can help your organization for the short- or long-term. Startups and SMEs (small and medium-sized businesses) may have no choice but to outsource, at least initially. Larger, more established organizations may already have internal marketing departments for brand promotion and strategic direction. Most companies outsource non-core marketing activities, such as social media and content development in varying degrees. The key is to determine functions that can be better performed by a third party, if any. Another consideration is the type of outsourcing engagement. Do you need end-to-end management of marketing services or management of a specific marketing function? Whether it is a need to scale up due to increased marketing activity or a sudden need to access expertise and resources, the following guidelines can help you make the right decision. 1. Do you need outside expertise? The marketing function requires multiple experts that may include communication professionals, research analysts, product specialists, content developers, digital marketing experts and others. Many organizations lack expertise at one time or another due to the unavailability of skilled talent or inadequate staffing. In this case, it’s a sound idea to work with a third party that can fill the talent gap in your organization. 2. Do you need better technology? Many marketing companies have incompatible technologies and legacy systems that can make it hard to execute promotion strategies properly. Even companies in the high-technology sector find that their marketing departments are not at the top of list for technological upgrades. Building the required applications or infrastructure in-house can be prohibitively expensive. An alternative is to work with a marketing service provider that already has the tools to help your marketing department perform optimally. 3. Do you need more flexibility? Marketing companies must be on their toes all the time to keep up with a constantly evolving market. Sudden changes such as new customer demographics and volume spikes that demand more resources can tax internal marketing departments. Outsourcing certain marketing functions can give an organization better flexibility in terms of scalability and adapting to changes. Working with a third party during critical times of change can keep costs down (including hidden costs), reduce risk and allow the organization to access resources it lacks on an ad hoc basis. 4. Do you need access to best practices? If you suspect that your internal marketing capabilities are not up to snuff, working with a service provider can improve process efficiency and allow your organization to access best practices. Due to their experience working with different companies over the years, marketing service providers have built up the right technology, skilled staff, deep industry partnerships, and best process flows to give your company a competitive edge. 5. Do you need to expand the organization or grow quickly? Organizations that need to get products and services to market quickly often need additional support in the form of personnel, technology and efficient processes. It is true that you can build these capabilities internally, but it tends to take time and cost a lot of money. Working with a marketing expert is not only more affordable, it also gets your product to market much more rapidly. However, it is crucial to have a knowledge transfer system in place after the outsourcing contract ends to get the most out of the partnership. 6. Do you absolutely need to perform a certain marketing function in-house? Marketing department staff assumes a wide variety of roles. Some of these roles, like the analysis of buyer demographics/segments, product pricing, and understanding data to improve operations, are strategic to the organization. Other roles, such as events planning and digital content management, while crucial, can be assigned to a third party. CMOs need to determine whether a marketing function will be better performed by an outside expert and outsource accordingly.
Benefits of Outsourced Marketing
Outsourced marketing engagements can be a powerful transformational tool if managed properly. Marketing service providers generally have a wider range of capabilities and more resources than the average non-specialized marketing department, leading to improved services at a lower cost. For larger companies that already have well-oiled, efficient marketing departments, outsourcing can mean innovation and increased competitive advantage. For startups and smaller organizations that may have no choice but to work with an agency, outsourced marketing can level the playing field. Other benefits of outsourced marketing include: Improved focus. When you outsource non-core but essential marketing functions, your internal marketing staff has more time to work on activities that are central to your marketing efforts such as analytics that improve performance. Startups can also better focus on developing products and getting them to market quickly. Reduced overall costs. Comprehensive marketing services from a third party can cost much less than hiring a full-time high-level marketing professional. You get a group of marketing experts without spending a fortune on software, office space, equipment, and infrastructure. Expanded talent pool. In-house marketing departments may not always have the skills and people required for complicated or large-scale projects. A service provider augments your internal team with experienced and talented marketing professionals that integrate seamlessly into your organization. Transparency. When you work with the right outsourced marketing provider, you retain access to internal data, knowledge databases and intellectual property—without hidden fees. Custom solutions. Internal marketing departments basically exist for brand promotion regardless of the organization’s current needs. An outsourced team is assembled based on your company’s need for resources and talent, strategic goals and budget. Outside perspective. An outsourced marketing team can enrich the marketing process by providing an objective viewpoint. Working only with an internal marketing staff, it is possible to get too close to the business, neglect the customer’s perspective and ignore other strategies.
Investing in Marketing Outsourcing
With its many advantages, outsourced marketing seems like a logical decision for every organization. However, the impact of the same outsourcing engagement can vary widely depending on the company and its goals. This is why it is important to conduct a thorough internal and external evaluation to determine if a marketing function can be improved if performed by a third party. Possession of certain characteristics enables a company to fully realize the benefits of an outsourced marketing campaign. Doing what you are good at—the reason you started a business in the first place—is critical. If you are great at developing and designing mobile applications, for example, that is what you should focus on. Let other members of your team perform business activities that they are good at. Investing in outsourced marketing is getting an entire team of marketing experts, along with the appropriate technology and best practices, for so much less than the cost of recruiting and supporting individual marketing staff. Building an internal marketing team is not only expensive; it can take a long, long time—particularly if you are looking for top-level talent. Outsourced marketing is a way to gain the talent, technology and processes you need when you need it, allowing you to scale up or down easily and better adapt to changing customer needs and market fluctuations. Choosing the right provider is another key to success. Any competent service provider can support your marketing efforts with talent and technology, but only a qualified and experienced vendor that focuses on value and innovation can transform your organization. Look for a marketing firm that develops a long-term partnership guided by strategy and business goals and improves processes across the board. To achieve even more savings without sacrificing quality of service, consider working with an offshore marketing service provider. Due to lower labor and operating costs, offshore vendors can reduce your overall marketing costs significantly.
Building your Outsourced Team in the Philippines
Learn more about outsourced staff leasing and the Philippines as an outsourcing destination. Previous Outsourced Marketing: Industry Overview, Services and Process Flow POPULAR POSTS Guide to Banking BPO, Financial Services Outsourcing Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Flash Animation Design 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News
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<![CDATA[ Outsourced Marketing: Industry Overview, Services and Process Flow ]]> Sourcefit Philippines Outsourcing Blog: Outsource Marketing Industry, ProcessOutsourced marketing is the transfer of responsibility for the promotion of a company's product, service or brand to a third party. All promotion activities or a few of these activities can be outsourced. End-to-end outsourced marketing campaigns are synonymous with marketing process outsourcing, which is the outsourcing of an entire process. Companies can also outsource discrete marketing tasks to support internal marketing departments.
Definition of Key and Related Terms
Outsourced marketing allows organizations to extend their capabilities and leverage the knowledge, experience and resources of an entire marketing department. One of the main advantages of outsourced marketing is quick access to marketing expertise without the need to invest in infrastructure or full-time employees. As marketing experts, marketing service providers employ techniques based on research and analysis of trends, consumer behavior and market segmentation. Marketing outsourcing can be categorized by function: advertising and brand management, digital marketing, marketing research and analytics, and sales. Advertising and Brand Management Advertising and brand management activities include traditional creative services and campaign design, campaign management, and lead management. Print, television and direct mail advertising are some of the mediums of communication between business and customers. Digital Marketing Also called internet marketing or online marketing, digital marketing encompasses all promotional activities performed via the internet, including search engine marketing and social media marketing. Digital marketing aims to target its audience more precisely using web analytics and consumer data culled from online activities. Marketing Research and Analytics Sometimes called left-brain marketing, marketing research and analytics refer to the number-crunching process behind promotional and sales campaigns. Research and analytics activities include data analytics, which is the analysis of program performance, customer behavior and brand health. Sales The main goal of sales activities is to increase sales volume of a product or service. Traditional sales-oriented marketing does not consider consumer desires; it is concerned with moving products and achieving target sales goals. Modern sales approaches rely on consumer buying behavior to boost sales.
Outsourced Marketing Orientation
Outsourced marketing service providers adopt many approaches to marketing: relationship marketing, business or industrial marketing, societal marketing, and branding. Relationship marketing (business to consumer or B2C) is focused on the consumer and aims to build and maintain great customer relationships, while business/industrial marketing (business to business or B2B) is concerned with building and sustaining relationships between two businesses. Societal marketing aims to benefit society and mitigate harmful effects of production and sales, while branding focuses on building and improving brand value. B2C Marketing Outsourced B2C marketing refers to promotional services aimed at consumers. B2C marketing service providers in a consulting capacity may undertake analysis of buying behavior to determine the consumer mindset during the purchasing process. Service providers also perform customer satisfaction tracking, analysis of repurchase behavior, and sales analysis to determine whether the marketing campaign is working or not. B2B Marketing Outsourced B2B marketing refers to promotional activities aimed at organizations. Businesses differ from consumers in terms of buying behavior. Enterprises usually buy in bulk from other businesses or directly from the manufacturer. B2B marketing service providers perform brand management, sales, analytics, and online marketing in behalf of an organization, with the service directed towards building and maintaining relationships with other organizations.
Outsourced Marketing Services
What marketing service to outsource typically depends on the size of the company and the number of products or services. Startup and small business owners often perform the role of general marketer, doing everything from design to traditional/digital promotion and analytics. On the other hand, medium-sized businesses and larger organizations tend to have specialized marketing roles. For example, product design/development staff handles concept and functionality, the creative team designs promotional campaigns, and the product marketer handles pricing. Outsourced marketing service providers can assume responsibility for all of these tasks and bundle them into a comprehensive package or offer discrete and customized services depending on the client’s needs. Industry Overview As customer choices evolve, companies find that they must change and master their marketing strategies to capture and retain consumer attention. Businesses of all sizes and across industries are increasingly turning to third parties to better adapt to an ever-changing market and meet challenges. Compared to the hiring of ad agencies to perform traditional marketing activities (print, direct mail, telephone, radio and TV), outsourced marketing is a fairly recent phenomenon. It is an offshoot of the outsourcing movement that started with information technology services in the early 1990s. Companies followed the path of traditional marketing, initially outsourcing creative tasks like promotional campaign design, website design and content development. The next generation of marketing outsourcers added analytical and strategic operations to the menu. Today, many companies outsource marketing for strategic reasons and to gain a competitive advantage through innovation. Clients are also demanding more value from providers. In response, vendors are offering higher-value services and continuous improvements. For example, some providers offer software that tracks customer interactions, sends out targeting marketing messages and changes prices based on product inventory. However, some vendors still specialize in transactional marketing services like call centers and sales force staffing. In 2004, Forrester Research reported that 53 percent of survey participants wanted to outsource more than half of their marketing activities. A study also found that marketing outsourcing revenues grew by 7 percent in 2012 despite the economic downturn. The demand for marketing experts is projected to rise as emerging technologies and the internet make traditional methods of promotion less effective. The case for outsourced marketing is clearly strong regardless of industry. Some of the top reasons for partnering with a third party are cost reduction, process improvement, and access to analytics and management expertise. Outsourced marketing providers deliver multiple benefits such as low production costs, greater reach, dynamic digital marketing, content recycling, and flexible distribution processes. Those that offer dynamic solutions that deliver better value over time attract clients who are more focused on strategy.
Basic Flow of Outsource Marketing
Outsourced marketing is different from hiring a traditional ad agency to perform creative services. Marketing outsourcing vendors offer a comprehensive list of services and employ the latest technology to understand consumer behavior and market segmentation. Today’s service providers allow clients to build and maintain relationships throughout the purchase cycle. The outsourced marketing process begins like any other outsourcing arrangement. The client conducts an evaluation (internal and external assessment) to determine the organization’s current capabilities, needs, goals, and marketing activities that need to be outsourced. Once the client establishes a case for outsourced marketing, the service provider develops a custom plan that fits the client’s needs and budget. Evaluation The service provider will usually ask the client to fill out evaluation forms for internal and external assessment. Responses to the internal assessment will determine what skills the client has in house and what skills need to be brought in. Responses to the external assessment will provide a clearer understanding of marketing roles that can be better performed by a third party. The external assessment also helps determine the type of outsourcing provider that best fits the organization’s short- and long-term goals. Planning After the evaluation, the service provider will develop plans and budgets based on the responses to the questionnaire. There are different types of outsourced marketing contracts; the client may adopt an end-to-end approach like marketing process outsourcing, subcontract parts of its marketing activities or hire offshore marketing staff. For example, the client may only want the service provider to undertake digital marketing while the company performs marketing software development and analytics in-house. The plans are presented to the client, who will review them and approve the best fit. Execution Once the contract is signed, the vendor undertakes management of the marketing department or of specific marketing activities. The client may meet with the marketing staff in person or through videoconference (for offshore engagements) and work closely with them throughout the outsourcing campaign.
Building your Outsourced Team in the Philippines
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<![CDATA[ Outsourced Print and Mail: Raw Data, Print Files & Advantages ]]> Documents to be printed are either in a raw format or print-ready file. The service provider’s printer processor “tells” the spooler to produce the output according to the document data type.
Dealing with Raw Data and Print Files
Raw Printing Raw data printing is a direct printing method that sends a string of commands to the printer in its native language. Instead of sending the data to the Windows of Mac printer spoolers, the data goes straight to the device for faster and more reliable processing. Raw printing is a great alternative if the operating system spooler does not work. Raw printing is often used for text-based documents like receipts, bar codes and labels. There are multiple raw data types and raw printing languages. Three of the most common languages are EPL (Eltron Programming Language), ZPL (Zebra Programming Language) and ESC/P (Epson Standard Code for Printers). Zebra printers support the first two, while ESC/P is mainly used for receipt printers. Before sending out documents, clients should check with the service provider whether their printer supports the raw data file type. Raw data printing is ideal for outsourcing as it helps the client avoid investing in expensive technology and equipment. Many custom raw data files also need special software for support. A third party print and mail specialist is able to handle document preparation, composition, design, printing and mailing for custom raw data types. Print Files Ready-to-print document file types such as PDF and Word are compatible with most printers and normally do not require the printer processor to be modified. Anyone with a Windows or Mac OS can generate print file documents and send them to the print and mail provider for formatting, printing and distribution. These types of documents are ideal for online print to mail services and even self-service online print to mail. The client simply signs in to the vendor’s platform to enter their order (including quantity, paper type, finishing options and other specifications) and upload the print files for production.
Online Print to Mail Economics & Advantages
Mobility, the cloud and other emerging technologies are slowly transforming the printing landscape, and digital documents are becoming acceptable alternatives to traditional print documents. Printed materials are not disappearing anytime soon, however. Printing and mailing of paper-based internal documents and marketing collaterals remain a crucial component of many business processes. IT research and advisory firm Gartner Group reported that offices allot about 1-3 percent of their annual budgets to printing. This means that a company with $1 million in annual revenues will spend from $10,000 to 30,000 on document output every year. Meanwhile, enterprise print costs in the telecoms and banking sectors average about 6.1 percent of revenues, with the legal and advertising sectors spending the most (13.7 percent and 14.79 percent of revenues, respectively). Uncontrolled print and mail activities can easily lead to escalating costs—not only financial but also environmental—and expose the business to security risks. Improper document management costs companies millions of dollars every year, in addition to lost efficiency and productivity. For example, many large organizations are unaware of how many printers they currently have, how these printers are being used or if they are the right equipment for the job. Rationalization of the existing printer fleet and knowing what to keep and what to outsource, can allow energy-efficient printers to be used, leading to initial and ongoing cost savings. For startups and small and medium-sized enterprises who are new to the business, investing in expensive print and mailroom equipment may be the last thing on the agenda. SME owners and marketing officers are pressed to look for ways to reduce costs and streamline document printing and distribution. The market is at a point where IT infrastructure management and business processes are consolidated, and document output is one of the last ways to optimize infrastructure. This means that businesses are moving away from investing on assets and equipment and turning to service providers not only for cost reduction, but also for a strategic partnership that drives innovation and business value.
Advantages of Print and Mail Outsourcing
Print and mail outsourcing builds a document strategy that accurately monitors the amount of printing that is being done and the amount of outgoing and returned mail, leading to reduced environment impact, lower costs, improved productivity and improved competitive advantage. Optimized enterprise print and mail processes. Print and mail specialists allow large organizations to optimize their print and mail processes by taking responsibility for non-core but necessary activities and allowing the client to focus on their core business. Optimized print and mail processes in turn minimizes risk and supports the organization’s sustainability goals. Access to the latest technology and best practices. Today, the best print and mail providers are leveraging customer analytics, cloud services and mobility to support business transformation. By working with a print and mail provider, companies gain access to these capabilities and allow them to drive competitive advantage. Document security. It is in the best interest of service providers to provide secure print and mail solutions to their clients. An example is pull-printing, a technique that requires user authentication before print jobs are released. Providers also provide audit trails for compliance with data protection laws and regulations like Basel II. Mobile printing. The number of service providers that are offering mobile print and mail services are increasing as workers continue to use smartphones and tablets in the office. Mobile printing and mailing services allow marketing officers and staff to manage, print and send documents on the go. Cost savings of up to 30 percent. Many organizations underestimate their print and mail-related expenses and fail to monitor and analyze costs. A third party specialist can manage documents much more effectively, allowing clients to save as much as 30 percent on print and mail activities. Offshore print and mail service providers can further ramp up savings due to lower infrastructure and labor costs.
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<![CDATA[ Print and Mail Outsourcing ]]> Sourcefit Philippines Outsourcing Blog: Print and Mail OutsourcingPrint and mail outsourcing is the process of hiring a third party to undertake the printing and distribution of documents. It is the traditional sub-segment of document process outsourcing or the transfer of responsibility for document-intensive processes from an organization to a service provider. Print and mail outsourcing generally refers to outsourced printing, scanning and mailroom services instead of an outsourced process. In many cases, the entire document process is outsourced, including design, scanning and capture, printing, reproduction, quality control, archiving and mailroom services.
Outsourced Print and Mail Services
Print and mail outsourcing services can be categorized into operational and promotional or marketing communications. Operational print and mail services support an organization’s internal activities. The materials include stationery, manuals, memos, and other company documents. On the other hand, promotional print and mail services supports the organization’s marketing communications campaign. Materials include leaflets, posters, banners, packaging, brochures, direct mail and other sales collaterals. Companies that outsource print and mail activities may need discrete services or end-to-end document printing and distribution support. End-to-end services encompass every step of the print and mail process: concept development, design, customization, printing, document reproduction, distribution, storage and post-production services (return mail management, warehousing, etc.). Print and mail outsourcing continues to grow as print and electronic communications become integrated and companies seek solutions to improve workflows, automate processes, reduce the paper trail and reduce costs. Chief marketing officers (CMOs) who are responsible for driving growth are also beginning to understand that in-house marketing campaigns need to be run like an operational department. CMOs are thus turning to outside experts that can better turn incremental investment into sales and improve corporate brand value. One of the biggest benefits of outsourced print and mail services is lower costs. Print and mail outsourcing is a cost-effective way for companies to maximize their document printing and distribution budgets. In particular, letting an outside expert handle printing and mailing of marketing communications can help firms reduce the printing budget by 30 percent or more and drive revenue growth.
Print and Mail Outsourcing Growth Drivers
Third parties have been offering traditional print and mail services to organizations since the advent of the modern printing press. Technological innovations such as the copy machine by Xerox, CMYK printing and the laser printer have further broadened the capabilities of printing and document processing companies. Outsourcing of print and mail services in the U.S. was popular with financial services companies in the early 1990s, around the same time IT companies started outsourcing technology services locally and offshore. Due to the sheer volume of paperwork, printing and document distribution activities in banks and financial institutions, many firms began to seek partnerships with service providers that can do the job more effectively, quickly and affordably. The outsourcing of print and mailroom services has grown exponentially over the past decade as businesses turned to third parties to help them reduce cost, improve productivity, and achieve eco-sustainability. The first generation of print and mail outsourcing engagements saw companies seeking mainly to cut costs and boost productivity. In North America and Europe, many businesses followed the general trend from local to offshore outsourcing to further drive down spending. Many service providers claim to save clients up to 30 percent through end-to-end services. Yet organizations continue to face pressure to save more money while increasing process efficiency and driving innovation. Today, print and mail service providers, their clients and outsourcing engagements have matured with experience. The second and third generations of print and mail outsourced engagements are characterized by more demanding clients seeking added value and business transformation and vendors with new opportunities to extend the scope of services and support all types and sizes of businesses. For example, enterprise print and mail services have evolved into comprehensive document processing and the outsourcing of higher value activities, with the goal of improving business performance and the top line. The goal of next-generation print and mail outsourcing is to deliver business transformation through process improvement and innovation, turning vendors from mere suppliers into a strategic business partners.
Basic Flow of Offshore Outsourced Print and Mail
Print and mail outsourcing processes vary depending on the service provider. However, some steps are common in operational and promotional (marketing communications) print and mail workflow. The process usually starts with the acquisition of documents from the client and end with logistics, or the delivery of the printed material to the customer or end-user. 1. Data transfer. The client presents the documents and files to the service provider for printing and distribution. Paper documents may be sent to the vendor by courier, while digital files are transmitted electronically through the internet (email, Dropbox), computer-to-computer transfer like FTP (file transfer protocol), and other public or private methods of electronic data interchange. 2. Data processing.The next step is the extraction of information from the submitted documents. If these are paper documents, they are usually converted into a digital format by scanning or image capture for backup, storage and easier reproduction. For documents that are already digitized, the vendor will extract key information and prepare the data for printing, automation, reproduction, and distribution. 3. Document formatting. Document formatting is the process of turning data into a print-ready document. The provider follows general design and composition rules (as well as rules set in the client specifications) to turn the information into the target design format. Besides design and content, automation codes and special print notations are formatted into the documents for machine insertion. 4. Variable printing. Next, the print-ready file is sent to the printing department. Document specialists, graphic designers and copywriters often work together to customize each print-ready document to reflect the client’s brand and drive customer engagement based on marketing and promotions research. For example, personalized promotional direct mail (with custom wording, font color, paper color and type of imagery resonant with the target demographic) appeals to end-users far more than generic sales collaterals. After the client approves the proofs, the mailers are printed out. 5. Envelope insertion. Inserting documents into envelopes can be done automatically/semi-automatically or manually, even for high-volume orders. First, each document is folded according to specifications or assembled into a non-envelope mailer piece. Envelope documents are either a) fed into a machine that automates the process of inserting printed mailers of different sizes and folding into the right envelopes, or b) folded and inserted into envelopes manually. 6. Mailing and distribution. After preparing the envelopes, they are ready to be packed, addressed and shipped. Service providers have longstanding partnerships with major carriers to deliver mailers to end users locally and internationally. In the United States, providers have integrated their systems with the United States Postal Service (USPS) to streamline processes and allow clients to reduce mailing fees. Service providers ensure that each mailer or package has the correct postage and meets courier guidelines. For example, machines that read barcodes can automatically apply a new address if the customer has moved or submitted a change of address through the USPS. 7. Return Mail Management. Return mail management is a post-printing and mailing service offered by many providers. The vendor processes and analyzes return mail and presents a detailed report of undelivered mail to the client. Return mail management can reduce the number of returned documents. It can also be critical to cost-reduction initiatives, as it provides data and analysis that can be useful for future campaigns. 8. Fulfillment. Some providers offer stock management and warehousing services (short or long-term) in addition to print and mail. The materials are stored in an environmentally-controlled and secured environment, and the provider informs the client when certain supplies need to be replenished. High-value items are stored in a secured warehouse that only clients and approved staff can access.
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<![CDATA[ Virtual Team Types, Management and Advantages ]]> Sourcefit Philippines Outsourcing Blog: Virtual Team Types, Management and Advantages Virtual teams are bound by time, space (geography), organization, culture, number of people involved, and the degree of interaction between members. These boundaries define the type of virtual team and how it should be managed.
Common Types of Virtual Teams
According to Duarte and Snyder’s study Mastering Virtual Teams: Strategies, Tools, and Techniques that Succeed, there are six types of virtual teams: Networked Teams The term “networked” refers to the linkages between members of virtual team that are geographically dispersed. The members may or may not originate from a single organization. The distinguishing characteristic of a virtual team is its ad hoc nature; organizations often build and dissolve networked teams as necessary. Companies usually create networked teams to source and pool ideas from different experts and address a current or ongoing issue. The lifecycle of a networked team depends on the speed of issue resolution, and the number of people on the team depends on the complexity of the issue. Consulting firms often have networked virtual teams that pool expertise and dispense advice to clients. For example, if a single virtual team cannot provide management best practices that a client requires, the firm can rely on other networked teams for inputs. Parallel Teams Parallel teams are similar to networked teams in that organizations pool together a group of experts to bear on a specific issue or problem. The members of a parallel team may come from within the company or from outside in multiple geographical locations. Parallel teams are often created for short-term durations. However, parallel teams may be retained after the project is completed. An example of a virtual parallel team is the one employed by a consumer goods company to source ideas for an international customer loyalty system. Majority of the work performed by the parallel team involved data collection and analysis. Project Development Teams Project development teams are virtual teams tasked to work on a specific project. Organizations usually build project development teams to create new products, services, or processes for internal use and for end users. Project development teams are often geographically dispersed across different time zones. Unlike parallel teams, project development teams have greater decision-making capabilities. Members may be added or removed during the duration of the project as required. Project development teams also exist for longer durations. This type of virtual teams is common in the IT industry, where the common goal of the team is to produce an application or service. Work, Production or Functional Teams Production virtual teams are characterized by their limited, task-specific roles. These teams work in different departments within the company and may operate from multiple geographic locations. An example is a virtual team responsible for day-to-day, ongoing tasks (a warehousing team and an accounting team that operates globally). Service Teams While work or production teams are responsible for routine, ongoing tasks, service teams are assigned to perform a particular service. Service teams generally work in shifts; as one team’s shift ends, another team in a different time zone picks up where the first team left off. In this way, the service can be performed round the clock. An example of service team is customer service and technical support. Many Fortune 500 companies have captive centers all over the world staffed by local service teams to assist customers 24/7. Offshore ISD Teams Offshore ISD teams are teams hired by an organization to perform parts of the company’s often mission-critical activities. Offshore ISD teams work with an onshore team on projects like software development and research and development. Offshore ISD teams are common across industries, particularly in the IT and high-tech sectors. During the 1990s, some companies in Silicon Valley subcontracted part of their software development work to offshore ISD teams.
Outsourced Team Management
Kayworth and Leidner’s Leadership Effectiveness in Global Virtual Teams describes five stages of the virtual team management process: preparations, launch, performance management, team development, and disbanding. Virtual Team Management Preparations The first stage of virtual team management is the identification of the team’s common goals and appropriate processes to achieve these goals. Goals and process execution are determined by strategic factors such as the need to reduce costs, current organizational structure, flexibility, and market needs. During the preparations phase, the people involved develop a mission statement, design processes, select talent, design a rewards system, select required technology and integrate the virtual team with the parent organization. Launch During the launch stage, all members of the team get to know each other (preferably in person but may also be done through videoconference or other means of communication). The management may hold an introductory workshop to instruct members about common goals, teamwork rules, roles and responsibilities, effective communication techniques, and use of technology. Workshops are designed to establish a common culture among virtual team members, build trust and promote team identification. Outsourced Team Performance Management The next stage after launch activities is performance management. Performance is monitored and evaluated throughout the duration of the project to promote a positive team climate and maintain a high level of work efficiency. Performance management aims to address leadership, worker motivation, communication and knowledge management issues. Communication between members and virtual teams are usually done via electronic means, which may diminish the quality of information exchange. Motivation, trust, cohesion and satisfaction vary significantly among individual team members, and can be improved through various activities. Knowledge management issues can arise from lack of face-to-face communication between virtual team members and must be addressed through efficient performance management. Team Development Team development and training is a stage of performance management that includes activities addressing the needs of the team and individual members. Managers identify needs and deficits, conduct training and evaluate the effects of training. Disbanding The last stage of virtual team management is disbanding. Depending on the type of team and duration of the project, interventions can be introduced to maintain motivation and assist members going through the transition process.
Virtual Team Advantages
A common assumption about virtual teams is that work performance suffers because of time, geographical, cultural and organizational dispersion. However, virtual teams can actually outperform traditional teams IF managed properly. A study of 80 software development teams with members located around the world showed that virtual teams can perform more efficiently than co-located groups when managed well. Here are some reasons virtual teams can drive efficiency and lead to better results: Global Talent Sourcing Organizations that have difficulty sourcing talent locally can enlist the most talented professionals by recruiting elsewhere. Near-shore and offshore professionals can augment a virtual team’s capability on an as needed basis or for the long-term. Even if there is a sufficient supply of local talent, organizations can leverage the diversity of ideas and cultural diversity that offshore team members bring to the table. “Follow the Sun” Schedule Virtual teams can work 24/7 using a “follow the sun” approach. For example, as programmers in North America end their day, virtual team members in the Philippines can continue the work and resolve problems. Reduced Time to Market With a 24/7 schedule, virtual teams can significantly reduce time-to-market, particularly in the manufacturing industry where lead time is one of the top keys to success. Improved Creativity Organizations can benefit from the different backgrounds of their virtual team members. Diversity encourages creativity and promotes contrasting viewpoints, which opens up unexplored solutions for consideration. Diversity also promotes workplace equality and inclusiveness, extending career opportunities to disadvantaged individuals who may be unable to work in a traditional office. Reduced Operating Costs Virtual teams save companies from significant overhead and travel expenses. Instead of establishing offices in multiple global locations, an organization can build a virtual team that serves as an extension of the in-house staff. Virtual team members do not have to commute to and from work, leading to efficiencies that can translate into more savings for the business.
Building your Outsourced Team in the Philippines
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<![CDATA[ Virtual Teams: The Definitive Outsourcing Guide ]]> Sourcefit Philippines Outsourcing Blog: Virtual Teams -- The Definitive Outsourcing GuideA virtual team is a group of people working together outside geographical or organizational boundaries. A virtual team is also called a geographically dispersed team or an outsourced team, in the context of an organization hiring outside experts typically located offshore to perform specialized tasks. Virtual team outsourcing involves staff members that are usually located across time zones. Through the use of information and communications technology, team members work interdependently to achieve a common goal. A virtual team may be assembled on an ad hoc basis or for a long-term, strategic purpose. Members of a virtual team can work temporarily for the organization or become permanent extensions of the company’s local staff. Virtual team members may work from home, on-site in a service provider’s office or an organization’s local office. It is common for members of a virtual team to never meet personally; instead, daily communication is conducted online, by telephone or other electronic means. Virtual teams allow organizations to match talent to role easily, particularly when there is a local shortage of skilled labor. Virtual teams offer a viable solution to issues related to cost pressures, market cycles, globalization, corporate restructuring, and employee mobility. Increasingly, organizations are using virtual teams to leverage specialized skills required to perform complex, mission-critical knowledge work.
Outsourced Team
Outsourcing has been around for many years, but outsourced services and virtual teams really took off with the rise of the internet and advent of advanced forms of communication. In North America, outsourced software development teams started appearing in the 1990s, with companies outsourcing work to onsite teams and offshore (mainly to India). Other industries closely followed suit in an effort to access specialized talent and the latest technology while achieving cost efficiencies. The hiring of offshore virtual teams has become popular in recent years mainly due to cost advantages and better access to hard-to-find skilled labor. Service providers in these offshore locations hire and recruit virtual team members and match them to client needs. The offshore teams often work with an onshore team on similar or completely different tasks.
Virtual Team Outsourcing: Model and Structure
A virtual team is composed of people, purpose (a common goal) and connections. Because virtual teams are distinct from an organization, the team lacks characteristics such as hierarchy. Instead, the common goal and links between members hold the team together. The goal can be broken down into a series of steps and processes assigned to individual team members. The tasks performed by each member vary, as well as the results. However, each activity contributes to the overall purpose of the virtual team. Powell’s life cycle model (Journal section of Business Perspectives) for virtual teams has three categories: inputs, processes and outputs. Inputs such as design, culture, technical expertise and training (leadership, goals, technology and communications in other models), are attributes that the team uses to begin its work. Inputs also impact effective communication and the development of a shared understanding between members. Design refers to the structure of the team’s interactions, culture is the individual differences stemming from geographical location and other boundaries, and technical expertise is the skills and expertise contributed by members of the team. Training or education impacts team performance. Design A virtual team’s design is the structure of its interactions. Interactions encompass all of the team’s exchanges with each other and the expression of the team’s goals, values, norms and activities. Interaction may be face-to-face or through phone, the internet, and other electronic media. A team’s design can have a profound impact on the development of a shared language between members. Culture Cultural differences can hinder team harmony and create communication barriers. This is why some companies prefer to hire virtual team members whose culture is highly compatible with that of the onsite team. However, even slight differences among team members located within the same country can have a negative influence on virtual team collaboration and coordination. Technical Expertise Virtual team members are often hired because of their technical domain expertise. Lack of demonstrated expertise and poor handling of technical issues can negatively impact team performance as well as individual satisfaction. Training Similarly, inadequately trained virtual team members may lower the overall performance of the team. On the other hand, different technology skills among members can lead to inconsistency.
Tasks Processes of a Remote Team
While inputs are attributes essential to initiate interactions, processes are ongoing actions between virtual team members. These actions are interdependent and transform inputs into outputs. The virtual team process category has two aspects: socio-emotional and task. The socio-emotional aspect includes relations, cohesion and trust, while the task aspect includes communication, collaboration and task-technology fit. Socio-Emotional Process The socio-emotional process refers to the development or building of working relationships, cohesion and trust. Each member has to feel that he or she is a legitimate part of the group and his or her contribution help achieve the team’s common purpose. To be a functioning, interdependent unit, the team must have 1) friendly relationships between members, 2) a “third way” micro culture that supersedes individual cultural affinities, ideas, locations or functions, and 3) strong leadership abilities in each team member. The nature of virtual team work makes proactive, independent action essential to high performance and success. Cohesion and trust are closely linked. Cohesion is the tendency of a team to remain united in the pursuit of a common goal. The primary factor that determines whether a team can be cohesive or not is the level of trust among members. Studies suggest that collaborative technologies may hinder cohesiveness in virtual teams and that virtual teams go from relatively low to a stronger degree of cohesion over time due to the absorption and exchange of social information. On a similar note, a high level of trust ensures that members communicate properly, participate actively in activities and complete assignments. Task Process Task processes include communication, collaboration and task-technology fit (or communication coordination and task-technology structure in other models). Communication is considered the heart of the virtual team process, without which geographically dispersed team members cannot work on their assigned tasks. Collaboration refers to the concerted effort between team members (or parts of an organization) and logical consistency of individual work activities. Task-technology fit represents the compatibility of technology with the assigned tasks.
Virtual Team Outputs
The outputs or outcomes of a virtual team include everything created by the work processes. Outputs are measured at the organizational, team and individual level, such as performance, satisfaction, innovation, and decision quality of the team (as a single entity). Several studies have compared the performance and satisfaction of traditional vs. virtual teams. Performance and Satisfaction The results of performance studies are mixed. One study (Sharda et al. 1998) showed that virtual teams performed better than traditional teams. Majority of research work did not find any significant difference between the two types of teams, however. A few studies also found no difference between the traditional and virtual teams in terms of satisfaction. One study found that a traditional team initially scored very high in satisfaction compared to a virtual team. However, the satisfaction of the virtual team increased over time and exceeded the traditional team’s level of satisfaction. In terms of individual members, those who experienced higher satisfaction with virtual teams were more likely to have had training and access to more means of communication. Decision Quality and Innovation Similarly, majority of studies did not find a significant difference between the decision quality and number of ideas generated by virtual and traditional teams. One study (Chidambaram & Bostrom, 1993) showed that virtual teams produced more ideas compared to traditional teams. This phenomenon can be attributed to the nature of virtual work that requires more time for team members to reach a decision. In their paper Office Technology and People, Anne Powell of the Southern Illinois University Edwardsville, Gabriele Piccoli of Cornell University and Blake Ives of the University of Houston mentioned several studies that enumerated the attributes of a successful virtual team. These attributes include training, strategy/goal setting, shared language development, communication, collaboration, commitment, cohesiveness and good task-technology fit. It’s easy to see why a virtual team lacking strategic direction, shared language, communication, unity, trust and the right technologies can be outperformed by a highly-effective and functional virtual team.
Building your Outsourced Team in the Philippines
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<![CDATA[ Why the Philippines is Emerging as a Leading Destination for Knowledge Process Outsourcing ]]> Why the Philippines is Emerging as a Leading Destination for Knowledge Process OutsourcingThe Philippine outsourcing sector is a mature industry that has naturally evolved towards core and higher-value service offerings. Locally, Knowledge Process Outsourcing (KPO) services are often called “non-voice” or back office services, referring to activities outside contact center, customer and IT support services. In 2014, the KPO sector comprised 40 percent of the country’s outsourcing industry. The Information Technology and Business Process Outsourcing Association of the Philippines (IBPAP) predicts that the Philippine outsourcing sector will reach $25 billion in revenues and employ about 1.3 million people by 2016. The Philippines consistently leads rankings as an overall offshoring destination due to low labor and operating costs, excellent English proficiency, highly-skilled talent pool, cultural affinity with the West, good infrastructure and relative political and economic stability. In its 2014 Global Services Location Index, A.T. Kearney ranked the Philippines number 7 among 51 countries in terms of back office services.
KPO Industry in the Philippines
Like India’s KPO industry, the Philippine KPO sector has evolved along similar lines. Starting with contact center services and low-value back office work like data entry and IT maintenance, the country is now considered an established destination for animation and design and content/publishing KPO services (Sathe and Aradhana, Back office and non-voice services contributed $1.1 billion in revenues to the country’s outsourcing sector in 2009. Former IBPAP executive director for information research Gillian Virata said that the Philippine KPO industry is expected to reach the same market size as the voice service sector by 2015-2016. Non-voice services are already growing at a faster rate than traditional voice services. Banking and Finance Services The banking and financial services industry is leading KPO activity in the country, with global financial institutions providing underwriting, research and analytics, training and consulting, profit and loss, risk mitigation, and other BFSI-related services. KPO vendors also provide strategic research, market research, financial services research, analytics, and competitive intelligence monitoring. Legal Services Companies from the Philippines are expected to compete strongly with Indian providers of legal and paralegal services to the United States. Besides its cultural affinity with the West and excellent English proficiency of its talent pool, the Philippines used to be an American colony, and its laws are patterned after those of the U.S. Integreon is an established legal services provider in the country, specializing in discovery, contract management, compliance, legal research and knowledge management, intellectual property, and due diligence. Medical Services and Research and Development Many Chinese research and development pharmaceutical firms have set up offices in Metro Manila due to relatively lower rental and operating costs compared to traditional destinations like India (Should MNCs Stop Paying Rent Overseas, Cushman & Wakefield 2014). The country also has a pool of 250,000 nursing graduates, about half of which are expected to be employed in the healthcare services sector in 2016 (Healthcare Information Management Outsourcing Association of the Philippines, 2014). Animation and Design The Philippines has established itself as a successful animation and design outsourcing destination. The Animation Council of Philippines estimates that global animation industry revenues have been growing at 20 to 30 percent over the past few years, increasing demand for low-cost, highly skilled creative labor. The rise of the animation outsourcing industry in the Philippines began in the early 1980s, with FilCartoons, Burbank Animation Inc. and Asian Animation setting up operations in the country and providing animation exports to foreign companies. In 2008, the Philippines had over 50 animation companies, mostly small and medium-sized companies. Larger animation companies include TOEI Animation, Roadrunner and Toon City Animation Inc., which employs about 1,300 animators and artists (about 18 percent of the country’s animation labor pool. Overall, the Philippines employed about 7,000 people in the animation sector in 2008 and generated up to US$97 million in 2006 and US$105 million in 2007 (The Philippine Animation Industry landscape, Tholons 2008).
Attractiveness Factors for KPO in the Philippines
A.T. Kearney’s 2014 survey showed that the Philippines’ higher total score in back office services was due to an improvement in two key measures, business environment and people skills and availability. While the country gained a lower score on financial attractiveness, these two measures contributed to its overall attractiveness as a KPO destination. Business Environment The Philippines has an investor-friendly regulatory environment that attracts foreign companies looking for KPO services and vendors wishing to set up or expand local KPO centers. The Philippine Board of Investments (BOI) provides many incentives to these locators, including an income-tax holiday for four to eight years, additional deduction on labor expense for the first five years from registration, value added tax (VAT) exemption on allowable local purchases such as telecom, electricity and water, and domestic sales allowance of up to 30 percent of total sales. Other incentives for businesses located in economic zones include exemption from import duty fees and taxes on imported raw materials and equipment, the option pay a special 5 percent tax on gross income, and permanent residence status for foreign investors with initial investments of a certain amount. People Skills and Availability Everest Group ranks the Philippines second to India in terms of cumulative talent competitiveness based on the size of graduate pool, experience, scalability, and quality of English. Although the country’s skilled talent pool is smaller than that of India and China, the employable portion of the labor force is highly educated, skilled, and experienced. The Philippines produces about 370,000 college graduates every year (IBPAP estimates graduates to be more than 500,000), with Metro Manila producing about 20,000 technical majors each year. The educational system for legal and accounting professions is also based on Western systems. In 2006, the Professional Regulation Commission reported that the country had 100,000 CPAs, 95,000 physicians, 26,000 electrical and communication engineers, and 22,000 chemical engineers. In 2010, the country had 119, 378 graduates in the medical, natural sciences and allied sciences, 117,339 business and accounting graduates, 68,811 social and behavioral sciences graduates, 50,734 engineering and architecture graduates, 47,928 IT and mathematics graduates and 12,269 fine arts, mass communications and humanities graduates (National Statistics Office and Commission on Higher Education data). In 2015, IBPAP expects the number of law graduates to reach 2,976 and finance and business field graduates to reach 129,168. The country also has a large pool of paralegals and CPAs. Government Support The Philippine government strongly supports the outsourcing industry, implementing aggressive promotion initiatives for key sectors and providing support for locators in the form of economic zones and other incentives. IBPAP’s comprehensive road map for 2016 targets 20 percent year-on-year growth for the outsourcing sector. Labor Cost IBPAP reports that all-in costs and labor costs for English-speaking professionals in the Philippines are among the lowest in the world. In 2012, Everest Group estimated the average ongoing costs for finance and accounting outsourcing in Metro Manila at US $18,000 to $20,000 per year. The country’s inflation rate is also predictable and manageable. For the first three months of 2015, headline inflation remained low and stable due to strong foreign direct investment, steady inflow of remittances from overseas Filipino workers, manageable debt, and ample central bank reserves. Infrastructure The Philippines has plenty of low-cost, high-quality real estate in both urban and rural areas (the country’s supply of office space is expected to reach 6 million square meters by 2015 in Metro Manila alone), reliable and low-cost telecommunications infrastructure, reliable and consistent power supply and 24/7 low-cost transportation. Telcos in the country continue to improve and expand their networks to ensure reliability, and the government continues to upgrade transport infrastructure.
Knowledge Process Outsourcing in the Philippines
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<![CDATA[ Benefits of Knowledge Process Outsourcing ]]> Sourcefit Philippines Outsourcing Blog:Benefits of Knowledge Process OutsourcingThe transformative benefits of knowledge process outsourcing has led many organizations to offshore their core functions to high-talent, low-cost locations like India, the Philippines, China, Eastern Europe and Latin America. Cost reduction remains an important driver of all outsourcing activities, but strategic benefits and value take precedence for those looking to outsource and gain knowledge process outsourcing benefits.
Potential Cost Savings of Outsourcing Knowledge Processes
Companies can save as much as 40 to 50 percent by offshoring knowledge-intensive activities to a third party in a low-cost location. A study in 2006 revealed that India, China and Russia produce massive numbers of STEM professionals and even PhDs receiving annual salaries that are about one tenth of their Western counterparts. The cost difference can range between $60,000 to $80,0000 per year for science and engineering PhDs, for example. According to a 2005 study, the cost breakdown for a typical U.S.-based management consulting firm is 20 percent fixed cost, 60 percent variable cost and 20 percent profit margins. After outsourcing, the cost breakdown is 18 percent fixed cost, 30 percent variable cost and 20 percent profit margins. This translates to a 32 percent value creation for buyers of KPO services. KPO offers significant potential cost savings in absolute terms, because the average cost of knowledge process resources is higher than IT or BPO resource costs. An example is financial services modeling in India performed by professionals with 1-2 years of experience. The total annual compensation for the Indian employee would be about $150,0000, including annual salary, bonus, social security and medical benefits. On the other hand, the compensation for a U.S.-based professional with the same skills and qualifications would total about $200-250,000 a year, including office space, HR and admin overheads, database lease and other infrastructure. Similar cost savings can be seen in the automotive sector. Many companies have offshored research and development and certain design tasks to professionals offshore who have master’s degrees or doctoral degrees in engineering, computer and materials science, metallurgy, and polymer science. In the U.S. these roles are performed by tenured employees with annual salaries of about $200,000. KPO services providers further lower costs, charging about $50,000 to $60,000 a year for chartered accountants, financial analysts and MBAs with 1–2 years of experience, according to a 2008 study. Even lower labor costs can be found in the Philippines, Chile and Mexico as these countries increase competition and drive prices down (Outsourcing: Its Benefits, Drawbacks and Other Related Issues, Journal of American Academy of Business, Cambridge 2006).
Access to Highly Specialized Labor with KPO
The KPO industry relies on the availability of differentiated talent as much as the availability of talent. A specialized educational background and in-depth understanding of the client’s industry are required because in-house training of recruits without experience is expensive and time-consuming. A 2010 study predicted that demand will outpace supply of skilled labor in the U.S., with excess demand of 5.6 million. Offshoring is expected to fill the gap partially by contributing 1.3 million jobs. As developed countries face shortage skills in knowledge-intensive activities like financial risk management, research and development, design, IT, and engineering, KPO becomes an even more attractive proposition. Because domain expertise is the key factor in KPO, strong contenders are those locations that produce large numbers of physicians, lawyers, engineers, STEM graduates and post-graduates, MBAs, certified financial analysts, certified public accountants, and other knowledge-intensive professions. For example, India produces about 441, 000 technical graduates and over 300, 000 post-graduates every year, which makes up about 30 percent of the available talent supply in all low-cost countries (NASSCOM and McKinsey, 2005). Besides India, key KPO destinations include China, Russia, Poland, the Philippines, Hungary, and many areas in the Soviet Union.
Better Human Resource Management
Companies that have one or more offshore centers dedicated to knowledge-intensive or core processes have more flexibility in terms of time and human resource management. KPO enables companies to tailor their workforce to changing business needs and avoid the monetary and emotional costs of laying off in-house employees. KPO also allows 24/7 production and collaboration between local and offshore teams due to time differences across the globe.
KPO Challenges
Limited Economies of Scale According to a recent study, 75 percent of financial services KPO firms have less than 500 resources, and 40 percent of financial services KPO firms have less than 100 resources. KPO firms in other verticals tend to have similar small, niche capabilities. Large-scale KPO operations are thus unlikely to be the norm, limiting economies of scale that are easily achievable in the IT-BPO sector that employs thousands of people. Most KPO services are also fragmented within departments in an organization and across different geographies. This makes it difficult to consolidate processes and further limits the scale and the scope of services that can be offshored. Limited Process Portability Knowledge processes are usually fragmented within an organization and business groups, making it more difficult to break down KP activities and bundle them into segments. Service providers must have offshoring maturity and sophisticated frameworks to support an efficient KPO model. Security and Intellectual Property Issues Due to the strategic nature of knowledge-intensive processes, intellectual property protection is even more important. Retaining core activities in-house mean better control of sensitive information and equipment protection. Offshoring core activities can increase security risks if the third party does not provide ISO certified or qualified professionals. Organizations also risk low-quality work and delays if the quality of employees is poor, thus forfeiting the main benefit of KPO, which is intellectual arbitrage.
Knowledge Process Outsourcing in the Philippines
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<![CDATA[ Knowledge Process Outsourcing Services ]]> Sourcefit Philippines Outsourcing Blog: Knowledge Process Outsourcing ServicesKnowledge process outsourcing services are core activities that involve research, analysis and critical thinking. At the middle level of the knowledge process outsourcing (KPO) value chain, some KPO services may overlap with business process outsourcing (BPO) services, such as content development/publishing that can be both routine and analytical. Others classify KPO under the umbrella heading of BPO. In general, knowledge process outsourcing services are high-value activities that are strategically important to an organization. As the level of intensive knowledge and analytical thinking required increases, so does the value of the activity. KPO services allow companies to improve top line growth instead of simply reducing costs. Today, the number of high-value activities is growing as knowledge process outsourcing services move toward maturity. KPO services cover all industries, professions and trades. Current KPO offerings include: Financial Data Management Business and Market Research Marketing and Communication Learning and Development Sales Support and Operations Consultancy Data Management and Integration Research and Development Legal Process Outsourcing Healthcare Process Outsourcing Engineering Services Software Development Animation and Design Game Development Creative Services
Rapidly Growing Knowledge Process Outsourcing Services
Technology Partners International reported in 2008 that financial services accounted for the largest share of the KPO market (65 percent), followed by business and market intelligence (26 percent), legal, intellectual property and patent research (6 percent), and pharmaceutical (3 percent). Two of the fastest growing KPO segments are data search, integration and management (50 percent CAGR) and market research and business intelligence (54 percent CAGR), according to the 2009 study Knowledge Process Outsourcing: India’s Emergence as a Global Leader published by the Asian Social Science Journal. Areas with high potential for growth include engineering and design, animation and simulation, biotech and pharmaceuticals, research and development, paralegal content and services, financial services and insurance research, and e-learning. In 2010, Evalueserve named three rapidly growing KPO services: banking, finance, securities and insurance (BFSI) research and analytics, legal, intellectual property and patents, and publishing. The following sub-segments are also expanding, but at a slower pace: data management, data search and analytics, architectural services, and translation and localization (KPO Industry Growth, Evalueserve 2010). BFSI Research and Analytics Research and analytics services in the BFSI industry include insurance and risk analytics, fixed income research, equities research, library information services, data modeling, and retail banking and marketing services. KPO services under this sub-segment can be low, mid- or high-value activities: fraud and delinquency analysis, product profitability analysis, underwriting algorithms, credit scoring, attrition modeling, propensity modeling, strategic customer or domain analysis, and market research support. BFSI research and analytics are expected to grow further due to the technology and innovation-driven nature of the BFSI industry, which have led all other industries in IT, business process, and knowledge process outsourcing. Equity Research and Investment Banking High-value chain services under equity research and investment banking include mergers and acquisitions (M&A) valuation model creation and support, model update and maintenance, presentation and pitch books for investors, and new idea generation for M&A contracts. Low to moderately complex tasks under this segment include industry report preparation and creation, valuation models updating, and new company initiation reports. Data Searching and Management Data searching and management KPO services overlap with BPO in some areas. Higher-value data searching and management activities include data collection and scrubbing, organization, searching, mining, and end-to-end management. These tasks typically require quantitative skills. The main verticals that leverage these KPO services include BFSI, biotech, pharmaceuticals, and healthcare. Legal, Intellectual Property, and Patents Research and Processing Legal research and processing services include document management like legal transcription, coding and tagging, document discovery like e-records review, intellectual property services such as patents and trademarks research, evidence of use analysis, art research, and legal research such as drafting of employee contracts, non-disclosure agreements, and pleadings. Legal services will continue to grow due to cost pressures among legal departments and law firms, with low-value LPO services expected to grow faster than high-value services. Software Development Software development services include a series of specialized tasks: research, conception, design, specification, code development, testing, and documentation. Some lower-value activities like and rudimentary coding and maintenance are under BPO and performed by entry-level technicians, while higher-value development and testing activities belong under knowledge process outsourcing services and are performed by skilled and experienced programmers and IT professionals. The main buyers of software development services are organizations in the BFSI sector that require software for internal operations like finance and accounting. Another major buyer is software publishers that produce products and services for end users (The Globalization of Software R&D: The Search for Talent, Stanford University). Product Development, Design and Engineering A large number (38 percent) of small and medium-sized firms are outsourcing product development, design and engineering, according to a survey conducted by the Offshoring Research Network, Duke University. SMEs are offshoring product development because they want to increase speed to market for new products and better access science and engineering talent. India and China are top destinations for this KPO subsector due to their large pools of skilled professionals and low labor and operating costs (Beyond Borders: The Global Innovation 1000: Booz &Company Inc., Jaruzelski and Dehoff 2008). Content Development and Publishing Content development and publishing services include creation and organization of content for printed material (newspapers, magazines textbooks, B2B marketing materials, technical manuals, etc.) and for the STEM (science, technology, engineering and mathematics) fields and academia. Web content development and publishing is a significant sub-segment of this KPO service that continues to experience strong growth. Engineering Services Engineering is one of the more mature sub-segments of the KPO services industry. Examples of core, high-value engineering services are very large scale integration (VLSI) design, simulation, chip design, vehicle design support, and prototype development. Biotechnology and Pharmaceutical Research and Development Biotechnology and pharmaceutical firms are increasingly outsourcing research and development. Common high-value activities that are offshored include gene identification, target identification, lead identification, pre-clinical trials, clinical trials, and R&D for new drugs/consumer products. Clinical trials monitoring are performed by qualified nurses and physicians, while gene, target and lead identification are typically carried out by scientists with doctoral degrees and years of experience (Chile Interview Series, Rigotti, Soza, Corbalán and Irarrázaval, 2009). Biotech and pharma firms are looking for low-cost countries to offshore low-value services and high-talent locations for high-value services. (The Offshore Services Global Value Chain by the Center on Globalization, Governance & Competitiveness, Duke University 2010). The cost of clinical trials in developing economies is about one-tenth of the levels in North America and Western Europe, and R&D costs are about one-eighth of U.S. costs. Besides labor arbitrage benefits, developing countries also possess native patient populations in large numbers, trained scientists, and established pharmaceutical firms (The Emergence of the Pharmaceutical Industry in the Developing World and its Implications for Multinational Enterprise Strategies, Rao, PM 2008).
Knowledge Process Outsourcing in the Philippines
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<![CDATA[ Knowledge Process Outsourcing: Overview ]]> Sourcefit Philippines Outsourcing Blog: Knowledge Process Outsourcing: OverviewKnowledge process outsourcing (KPO) is the transfer of responsibility for an organization’s information-related and other core activities to a third party. KPO belongs under the broad umbrella of business process outsourcing (BPO), with KPO services occupying the top tiers of the intellectual value chain. In general, business processes are repetitive and rule-based, while knowledge processes typically require analytical thinking skills and deep domain knowledge. Knowledge processes are often business-critical and give the organization its competitive advantage. There are a large number of activities that can be classified under knowledge processes, and these activities depend on the company’s industry and business focus. Rapid technological changes and a globalized market has placed pressure on companies to do more with what they have and increase competitiveness. KPO is one strategy that can help companies drive productivity and realize greater cost savings. KPO transforms outsourced processes from rule-based to analytical and technical activities. KPO is a relatively nascent branch of outsourcing. Unlike the mature BPO industry, KPO is less geographically diverse. Top KPO destinations rank high on parameters like current and potential talent availability, labor and infrastructure cost savings, and political risk. The number of attractive destinations for KPO is expected to increase to keep up with market growth and macroeconomic drivers. China and Russia, for example, can match India’s annual production rate of highly-educated and highly-skilled knowledge workers, while alternative locations like the Philippines and Latin America offer low costs and a rapidly growing talent pool.
Knowledge Process Outsourcing & Business Process Outsourcing
KPO is characterized by small-scale and niche offerings from service providers who employ highly-skilled professionals. KPO allows companies to unlock their top-line growth by outsourcing core functions to a low-cost but talented labor pool. KPO is a higher-value outsourcing setup. BPO provides process expertise, while KPO provides business expertise. The hallmarks of KPO activities are complexity and customization. In BPO, processes and methodologies are clearly-defined, the steps are standardized, and the outcome is predictable. Typical BPO activities include data entry, low-level customer support, invoice processing, rudimentary programming, and IT maintenance. On the other hand, knowledge processes do not follow rigid rules or steps, and the outcome depends on higher-level analysis, independent judgment, understanding, experience, and qualification. A knowledge activity is often highly complex and less defined than a non-core business process. These complex activities are typically hard to automate, and they require technical, analytical, and judgment skills. KPO may be further classified into role-based and analysis-based models. Role-based activities are what skilled trade professionals (lawyer, CPA, engineer, programmer) perform regularly. Examples are physicians making a diagnosis, developers designing and testing a program, and engineers maintaining operations manuals. Meanwhile, analysis-based KPO tasks are case dependent, complex and dynamic. At the enterprise level, these activities include market strategy, investment research, competitive analysis, and roadmaps. Analysis-based KPO involves strategic or high-level corporate decisions that are best carried out by knowledge workers with strong critical-thinking capabilities. The KPO industry requires very specific skills that focus on educational and other qualifications. For example, legal services require knowledge of U.S. or U.K. laws and legal applications, market research and analytics require statistical tools, database research and report writing, healthcare requires a medical or allied health degree and certification, and research and development requires a graduate or post-graduate degree. In addition, knowledge workers need basic skills in data and information processing, emotional intelligence, and good communication skills.
KPO as a Strategic Tool
Knowledge Process Outsourcing is a value-driven, strategic activity for many businesses. Instead of looking for the cheapest prices, managers are looking for best value (KPO Industry Growth Impacted by the Great Recession, 2010). A well-managed KPO campaign has a transformative effect on an organization. Like IT-BPO, KPO can open new opportunities and enable firms to respond quickly to changing market needs. To gain maximum benefits from KPO, a strategic relationship between the organization and service provider is crucial. This can be long-term or short-term and differ in scale. Long-term partnerships have the advantage of providing best value that may be impossible to cover in an ad hoc or short-term project. Long-term KPO can provide a clearer assessment of the organization’s capabilities and a flexible way to build these capabilities. According to the study Knowledge Process Outsourcing: India’s Emergence as a Global Leader published by the Asian Social Science Journal in 2009, both vendors and clients benefit from a strategic KPO model. KPO vendors reduce their client’s fixed and variable cost, and the service providers gain the company’s variable cost as revenue, split into gross profits (before taxes), employee costs, and overhead costs.
Beginnings and Evolution
Outsourcing in the information technology sector first began in the 1980s, when companies started to work with entities outside the organization to develop systems and improve internal processes and services (Let’s Talk Europe, Business World 2005). The outsourcing industry and its segments have since evolved and expanded. Globalization and the need for innovation due to rapid technological changes have increased product, service, and outsourcing lifecycles. The time was ripe for transformation, and a new form of outsourcing emerged. Like BPO, KPO has a great potential for growth and profits for businesses across industry verticals. Market research firms project a market size of about $17 billion by 2015. The growth of KPO in recent years has been partly due to technology and the need for specialized knowledge and expertise to manage and maintain technology-driven processes. In a globalized and knowledge-based economy, efficient production depends on the quality of information that organizations possess. Highly-skilled and well-educated professionals or knowledge workers are the keys to success in any business. Knowledge workers are highly-educated professionals whose work is the output of their skills (Knowledge Process Outsourcing: India’s Emergence as a Global Leader, Asian Social Science Journal 2009). The shortage of skilled labor and potential for more savings and added value have led businesses to outsource knowledge processes to countries like India, the Philippines, China, and Eastern Europe, locations that are also established BPO destinations. However, the usual reason for outsourcing knowledge processes goes beyond cost reduction. According to industry analysts, the strength of adopting a KPO strategy is the added value gained from outside experts, such as improved innovation and sustainable competitive advantage. An organization may outsource knowledge-intensive processes like market research, statistical and competitive analysis, and legal support to third parties that have specific experience and domain expertise in these areas. Today, KPO services are still evolving. It is not required that a vendor has experience in BPO and non-core outsourcing to offer KPO services; in fact, some small companies have established themselves as KPO providers from the outset. According to analysts, the current KPO industry is a mix of third party providers and captive structures, with multi-sourcing models expected to appear in the future. These hybrid models are composed of captive units that manage relationships with third party KPO providers. There are also boutique providers that have created new services and offerings out of the KPO model.
Knowledge Process Outsourcing in the Philippines
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<![CDATA[ Outsourced Software Development Case Studies and Latest Industry Trends ]]> Sourcefit Philippines Outsourcing Blog: Outsourced Software Development Case Studies and Latest Industry TrendsThird platform technologies—mobility, social business, big data and cloud—are transforming traditional offshore outsourcing models, including software development and research. In its survey of more than 200 software industry business leaders and software development professionals, SoftServe identified outsourced software development trends that will have a major impact on business strategies and IT offshoring this year: Hybrid Offshoring Companies continue to partner with third parties for software research and development, with a clear preference for single-source offshoring and multi-source onshore outsourcing. The report showed that companies support a long-term onshore and offshore outsourcing strategy. Most service providers offer comprehensive services that range from planning and design to maintenance, allowing buyers to work with one provider that have in-depth understanding of their product. Long-term relationships are beneficial because they can drive down costs even further when the buyer and vendor work on several projects over time. Key Destinations: India and Eastern Europe India remains the top offshore software R&D destination, with 46 percent of respondents (down from 75 percent in 2010) working with Indian partners. However, Ukraine and Eastern Europe are on the rise, with 29 percent of respondents preferring to work with vendors in these regions. Russia, Mexico, Brazil and Latin America dropped in favor, while Southeast Asia and China gained a little support, increasing from 13 percent to 16 percent in 2014. More than half of respondents (55 percent) said they plan to outsource other IT functions in 2015, while 33 percent said they had no outsourcing plans. Increased Security Initiatives Security remains a top concern when offshoring software R&D projects. Forty-two percent of companies surveyed indicated the need for advanced load testing security solutions and scaling up their ability to stress test solutions, while 40 percent of respondents wanted assistance from third parties to integrate security into quality assurance (QA) and build processes. To reduce the risk of hacking and data leakage, service providers have developed strict procedures and policies that are often superior to in-house processes. According to the SoftServe survey, most companies show an interest in working with third parties for independent audits, security process validation, and loading test security solutions. New Technologies The survey indicated that more companies are engaged in developing and implementing mobile applications, while early adopters are releasing products and entering the support stage. Buyers were mostly concerned about the challenge of mobile user experience while defining return on investment and tangible benefits. Twenty-one percent of respondents are also focused on defining their SaaS/Cloud strategy, a slight but notable increase from previous years. Service providers constantly update their offerings, skillset and technologies. Offshore software developers are aware of the impact of cloud services, big data, mobile apps and social business on software R&D, and they ensure that their solutions meet client needs. Small and medium-sized businesses that have limited resources can leverage the expertise of third parties to ensure that development is up-to-date. Agile Design Agile design is fast supplanting traditional development models. Companies today no longer offshore development of very large applications, then wait many years for the service provider to deliver a fully functional product. Agile development allows software to be designed in smaller pieces and implemented individually, increasing speed to market and reducing coordination complexities. This is critical in an environment where change is so rapid that applications get outdated by the minute.
Case Studies & Success Stories of Companies that Outsourced Software Development
U.S. Financial Services and Insurance Company An American financial services and insurance company wanted to reduce its software development costs through offshoring. Initially, the company partnered with a major Indian service provider that used waterfall development methodologies. However, the client failed to receive value from the engagement due to communication issues and unclear specifications and requirements. Deliverables often did not meet the requirements of end users, and the product needed to be reworked. How Outsourcing Helped When the company needed to develop a new pension plans system, it partnered with a different service provider. It is a high-end application development firm that uses a distributed agile development approach. The new contract was less expensive, and it included a mix of onshore and offshore teams. Team members travelled between the U.S. and offshore sites to ensure that the groups operated as a single team. As a result of agile methods, the vendor was able to provide value to the client quickly by delivering the most important features first. Delivery was done within budget and in half the time compared to the initial provider. Broadcom Corporation Broadcom Corporation designs and sells semiconductors for the wireless and broadband communications industry. The fabless chip firm is based in Irvine, California. When the company acquired Armedia Labs in 1999, it also acquired an offshore operations base for manufacturing single-chip solutions for HDTV. Broadcom handled market development exclusively while sharing all design and development work between its U.S. and offshore locations. In 2006, the offshore center employed 190 professionals that were divided into teams. Each team was part of a global team composed of engineers in the U.S., Israel, and Singapore. At any time, each team might be composed of over 100 people located locally and offshore. Due to the need for close coordination, the final chip design was assigned to one location only. This used to be done in California, but later on mostly in the offshore center. How Outsourcing Helped Unlike the teams in Massachusetts, Israel and Singapore, the offshore team from the new service provider was allowed to take the lead during the chip development process because of its capabilities and scale. For example, the offshore team was granted 10 U.S. patents out of the 140 that it filed, and Broadcom expected it to be granted up to 30 patents per year. This placed the offshore team on par with the best U.S. patent approval rates. Some tasks needed to be done locally, however. One member of the offshore team was located in the U.S. on an eight-week rotation to manage localization and customization of the fully designed chip for different types of customers. By employing a hybrid offshoring approach, Broadcom saved an average of one-third of U.S. costs and improved the skill level of its offshore operations in terms of very large chip development and embedded software. Agilent Technologies When offshore outsourced software development was in its infancy in 2001, Agilent Technologies was a pioneer in outsourcing software development. Agilent Technologies designs and manufactures test and measurement equipment for medical diagnostics and chemistry applications. The company chose its outsourcing partner based on its large talent pool of experienced developers, mature management talent, and a judicial system that favored intellectual property protection. However, Agilent retained most of its development work in-house, while outsourcing routine programming and maintenance work. The term of engagement was short in case of issues; all offshore operations had a six month overlap in staffing. How Outsourcing Helped Initially, Agilent’s engineering department assigned offshore workers to provide parts lists to its global customers and perform date entry for the CAD team in the U.S. The service providers assumed more complex development activities over time as Agilent grew confident in the vendor’s capabilities. Most support services were then offshored. In 2002, Agilent’s communications solutions department established a 10-person team offshore to automate test suites for the company’s Netexpert project. This engagement initially failed due to a lack of coordination, but the service provider recovered by increasing coordination time and implementing a quality improvement system. In 2005, both development and maintenance of software products were done by teams located offshore and in the U.S. NetScaler (Acquired by Citrix Systems, Inc.) Founded in 1998, California-based NetScaler manufactured network appliances. After developing a product that redesigned infrastructure that regulated internet traffic, NetScaler needed to add features to increase consumer acceptance. NetScaler believed that it could attract more customers that were moving to their product from legacy systems if they added more functionality. How Outsourcing Helped NetScaler had limited resources at that time and wanted to reduce costs while improving their product. In 2001, the company outsourced software development in order to develop added features. The offshore service provider the company hired delivered the requirements successfully, pushing NetScaler to establish offshore operations instead of continuing with a long-term outsourcing contract. NetScaler mostly hired local developers from the service provider. By establishing an offshore subsidiary, NetScaler was able to increase the number and complexity of development projects and improve engineering integration in that country. NetScaler started to offshore high-value work, while outsourcing routine engineering support to local vendors. With its U.S. and offshore teams, NetScaler was able to provide software documentation and 24/7 support to customers.
Software Development Outsourcing in the Philippines
Learn more about business process outsourcing and the Philippines as an outsourcing destination. You can also get more information about software development outsourcing by visiting our Software Development page. Previous Offshoring Software Development & Research: Industry Trends RELATED POSTS: How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries Software Development Offshore Outsourcing: Main Growth Drivers Why the Philippines is one of the Top Offshore Software Testing Destinations in the World How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries Software Development Outsourcing Destinations Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 5 Keys to Improving Quality in Offshore Business Process Outsourcing Flash Animation Design BPO Philippines 2015 News
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<![CDATA[ Offshoring Software Development & Research: Industry Trends ]]> Sourcefit Philippines Outsourcing Blog: Offshoring Software Development & Research - Industry TrendsOffshore software development is a fairly recent event in the history of outsourcing. According to The Globalization of Software R&D: The Search for Talent, a paper published in 1996 by Stanford University for the Stanford Computer Industry project, outsourced software development providers first appeared during the mid-1980s to early 1990s, when corporate information systems (IS) departments were in the midst of downsizing due to political reasons and a general misunderstanding of the importance of information technology (IT). Even then, offshore providers offered low rates due to wage differentials.
Beginnings of the Software Development Offshoring Industry
From the mid-80s to the early 90s, companies began to adopt client/server architectures to reduce hardware costs, which required new skills. Rapid technological changes and the rise of the internet continued to increase demand for relevant skills as the new millennium approached. Companies were forced to find talent in other areas and work with service providers locally or offshore. Fast internet connections powered other tools and facilitated remote design, development, testing and administration. As emerging markets were exposed to new technologies through the internet, people in areas like Russia and Eastern Europe acquired development skills and improved their English proficiency, reinforcing the offshoring trend. India has led the software exporting countries from then up to today. India’s population and its higher education system allow it to produce thousands of highly-skilled software engineers every year. For example, 1250 companies in India exported software (including CAD/CAM and enterprise resource planning software) in 1999 and 2000 alone. Companies also turned to Ireland and Israel for offshore software development, and more recently to Russia, China, and Eastern Europe.
Modern Offshore Software Research & Development
The authors of the paper Offshore Software Development: Is the Benefit Worth the Risk? said that offshore development can be divided into four general categories: sponsoring foreign professionals with employment visas, subcontracting development work to a local or offshore consulting firm, subcontracting recruitment of software engineers to an offshore company that sends the workers to the company’s locations, and establishment of development operations in offshore centers. Today, outsourced software development & research remains a development trend, as well as in-house agile development. There is pressure to work with outside experts to improve software quality, business flexibility, and scalability. Service providers also bring expertise to the table that may be too expensive to build in-house. A study of companies that outsourced software development offshore showed patterns in their experiences. The authors believed that offshoring “matured” through four stages: domestic sourcing only (stage 1), ad hoc sourcing (stage 2), proactive sourcing (stage 3), and strategic sourcing (stage 4). The authors expect that most companies in which IT is a core component of products and services or a significant source of competitive advantage will likely move towards stage 4 outsourcing. A 2011 survey by ExecutiveBrief involving about 300 software industry business leaders and development professionals showed that the priority for majority (86 percent) of respondents is new product and application development, with approximately 50 percent doing some degree of outsourcing. Majority of outsourcing projects (32.5 percent) are done both onshore and offshore, while 34.1 percent are purely offshore engagements (20.3 percent single-sourced and 13.8 percent multi-sourced). The study showed that companies outsourced almost two thirds (68.7 percent) of development work to India, while the rest are farmed out to Latin America, Eastern Europe, Southeast Asia, China, Russia, Romania, Ukraine, Australia/New Zealand, Canada, and other countries. The ExecutiveBrief study showed that more software development platforms are being added. Internet or web platforms account for the majority (66.5 percent), followed by software-as-a-service or cloud, enterprise applications, desktop applications, mobile/handheld, embedded, and other platforms. The respondents said that the greatest software development trends potentially impacting their business are SaaS or cloud and mobility.
Agile Software Development
More than a third (33.3 percent) of companies surveyed in the ExecutiveBrief study performed development work exclusively onshore. An article published on Microsoft Developer Network reported that agile software development is the reigning onshore software model, followed by iterative and waterfall models. With limited budgets and pressure to deliver high-quality products, the agile method proves beneficial in dynamic business environments. The hallmark of agile methods is flexibility or continuously evolving requirements and solutions through collaboration. The agile software development manifesto states that individuals and interactions, working software, customer collaboration and responsiveness to change are valued over processes and tools, comprehensive documentation, contract negotiation and following a plan. Agile methods are well-suited to internet-based companies, allowing them to do more with less and release products with limited budgets and small teams. However, agile software development is not one-size-fits-all, and it works best for small teams in rapidly changing environments. It is essential that the teams are co-located or located in the same area to reduce development time. In a larger corporate environment, it is more common to find distributed development teams that may be located on different continents. To make agile methods work with distributed teams, the teams must work as a single global entity where a member in any location can participate in the work. The offshore software development & research model must also encourage communication, collaboration and flexibility. Outsourcing contracts must therefore be flexible in terms of materials and time used, and teams must have shared common goals. To remove barriers among engineers, developers, managers and stakeholders, big companies may establish centers in offshore locations where there is an abundance of talented people. Successful offshore software R&D partnerships are characterized by better affinity between the developers and the client rather than between developer and service provider. Under agile development, architecture-based methods appear to work best, according to a paper published by Hamburg University. Architecture-centric development focuses on design and maintenance that emerges from the perspective of software architecture. The architecture dictates the assignment of work to teams, configuration management, and documentation. Software architecture also allows developers to maintain control over a large, complex system.
Offshore Software Development Trends in the Past 10 Years
In the mid- to late-1990s, offshore companies that were mostly based in India started bidding on routine software development projects in the United States. This trend took off as Y2K approached and companies needed to prepare their information systems for the turning of the century. As companies relied more and more on offshore resources, onshore consulting firms started to mine overseas locations for resources to remain competitive. Meanwhile, Indian companies started leveraging U.S.-based resources to work with their clients directly. The Indian companies were then able to bid on higher-value projects and move up. These onshore and offshore companies continued to grow, and majority of them were engaged in software consulting and project-based software R&D that used waterfall development methodologies. In the early 2000s, project-based offshore software development was typically fixed-price and fixed-scope engagements, where most of the requirements could theoretically be determined ahead of time and the service provider could estimate an accurate bid. In reality, it was impossible to determine all project requirements up front. What happened was buyers were forced to pay more as system requirements changed and were added to the project. During this time, organizations learned from software development disasters that while the waterfall approach was effective for some projects, it certainly was not applicable for all of them. Agile software development in a global development and delivery environment was born and became the new standard for many companies.
From India-Only Software Development Offshoring to Global Sourcing
In the early days of offshore software development & research, many companies transferred work to a single location, often in India, due to the availability of skilled programmers and developers, wage differentials and potential for huge savings. While Canada, Ireland, and Israel were attractive destinations due to the level of skill of their developers, India offered the best skills for the lowest cost. In 2005, India was the largest offshore software R&D and engineering provider, with $3.9 billion in revenues, according to Software Development: Globalization and Its Implications, a paper published by the National Academy of Engineering. In the mid- to late-2000s, organizations started to expand their horizons and establish development centers in multiple locations, although majority of these companies continued to outsource mainly to India and low-cost centers in China and Asia, Eastern Europe, and Latin America. Asia became an ideal location not only because of cheap labor, but also because of a larger pool of talent and resources, and the easier localization of software applications. Instead of establishing offshore centers right away, startups and larger organizations worked with service providers in India to test the waters and learn how the local government can facilitate setting up subsidiaries. In time, companies established local offices and extended their labor force. With multiple software developers across the globe working in different time zones, companies were able to extend the workday (follow-the-sun development) and even work 24/7. As teams in the West end their day, teams in the East come to work and pick up where the Western teams left off.
Strategic Outsourcing of Software Development
In the early 2000s, companies often selected a service provider based on the amount of resources they had for a project, whether the project was amenable to being offshored, and whether the service provider was a good fit in terms of the company’s goals. This tactical approach has since shifted to a more strategic one. Lower costs remain the primary driver for offshoring software R&D, engineering, and programming. However, buyers began to realize that offshoring could transform entire organizations into efficient, more productive entities. Ad hoc projects grew into highly-managed initiatives, and buyers started assigning services to people with the right skills, regardless of location. It’s common in the late 2000s and the past five years for companies to combine offshoring with local sourcing and near-shoring, and the trend continues today. Many companies now perform intensive evaluation of the impact of offshoring software development before selectively outsourcing development to multiple trusted providers and building relationships with new vendors.
Routine Programming to More Complex Development
Established corporations and startups in the U.S. initially offshored routine programming work only—both in-house software development and software services—to India (mostly Bangalore). As more companies started outsourcing over time, the sophistication of offshored development work also increased. In 2001, 68.9 percent of India‘s software export were routine programming and maintenance of existing applications. In 2005, this percentage dropped to 58.5 percent. The entry of foreign firms doing sophisticated software development and increased high-end projects undertaken by domestic firms (such as Wipro) led to decreased routine programming work. Software engineering, product development and research and development also increased from 8 percent in 1999 to 23 percent in 2005, according to a Nasscom study. By the late 2000s, application testing was on the rise, followed by development of new application technologies and components. By 2007 for example, India’s Tata Consulting Services (TCS) derived less than half of their third-quarter revenue from first time application development.
Decentralized Software Development and Delivery
In the early years of offshore software R&D, many organizations assigned each location to a project, and the team in that location was responsible for delivery. Global teams thus worked independently of each other. As companies expanded globally, organizational distribution of software development became increasingly decentralized. Multiple teams began collaborating when working on modules or components that were integrated into other components that culminated in a final product. The late 2000s saw the expansion of global development and delivery (GDD). Initially, only a few companies were willing to source technology, capabilities, and labor abroad, but it has become widely adopted in all industries. According to IBM’s Global Software Development and Delivery: Trends and Challenges, an estimated 80 percent of software projects are now global, and GDD is the new normal for most software publishers and companies that depend on software.
Flexible Engagement Models
Providers that offer flexible engagement models are more attractive to buyers. Flexible delivery allows them to scale up or down easily and make the most of the money they spend. Service providers are shifting towards fixed-price, outcome-based pricing from traditional time and materials-based pricing. When combined with agile methods and lean UX, fixed-priced contracts allow companies to adapt more easily to changes and increase time to market.
Software Development Outsourcing in the Philippines
Learn more about business process outsourcing and the Philippines as an outsourcing destination. You can also get more information about software development outsourcing by visiting our Software Development page. Previous How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries Next Outsourced Software Development Case Studies and Latest Industry Trends RELATED POSTS: Software Development Offshore Outsourcing: Main Growth Drivers Why the Philippines is one of the Top Offshore Software Testing Destinations in the World Software Development Outsourcing Destinations Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 5 Keys to Improving Quality in Offshore Business Process Outsourcing Flash Animation Design BPO Philippines 2015 News
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<![CDATA[ How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries ]]> Sourcefit Philippines Outsourcing Blog: How Outsourcing Software Development Helps Companies in the US, Canada, and Other Developed CountriesThe cost benefit of offshore outsourcing software development is obvious, and it is the one of the primary reasons companies in the United States do it. However, IT service providers have moved up the value chain and expanded their offerings to include high-level and complex development and testing. These services typically require development skills that are above average, meaning that labor cost is as high as and sometimes even higher than local costs. According to an article published by The Economist, extremely competent and good programmers in India and China are hard to find, despite the very large populations of these countries. These talented programmers command salaries equivalent to or higher than salaries of American or European programmers with the same skill level. Some companies are willing to pay the higher price for quality, and innovation, thus expanding the benefits of offshore software R&D beyond cost reduction. Still, the risks of offshore software R&D are real. It would take significant benefits that outweigh the risks for a company to consider outsourcing software R&D overseas. According to the Handbook of Business Strategy: Best Practices for Dealing with Offshore Software Development, U.S. companies that have experience with offshoring reported the following benefits: Reduced costs. The cost factor remains a main driver for offshoring. CIO magazine said that Otis Elevator, an elevator manufacturing company, spent almost half a million U.S. dollars in transition costs when it offshored 75 percent of its application development team to India. Otis recovered the investment after only one year, and it is currently saving $1.4 million in app development and maintenance. Access to larger talent pool. India, China and Russia have very large populations of software engineers and developers compared to smaller countries. These engineers are also more willing to work for lower wages than local engineers. An Intel manager reported that they were able to scale up more easily and increase the size of their development efforts due to access to a large labor pool. The manager said that outsourcing offers scalability when it is very difficult to find skilled engineers locally. Government incentives. Many offshore governments are highly invested in their country’s IT initiatives and software exporting capabilities. These governments aim to attract foreign investors by giving incentives to companies that want to outsource or establish offshore operations. In India, incentives include a 10-year tax holiday for R&D companies in certain industries and 150 percent deduction for scientific R&D spending. Improved focus. Some companies that were successful with their offshore software R&D projects reported that they were able to focus on core business activities as they transferred responsibility for non-critical software activities to service providers. Improved time to market. Global connectivity allows software development teams to function round the clock. As the development team in the U.S. ends their day, the offshore development team in India or the Philippines can pick up where the internal team left off, ensuring that products are delivered faster. High-quality, low-cost software. Many companies in North America continue to offshore software R&D because they claim that software produced offshore has better quality but lower costs. Many U.S. companies believe that reaching CMM Level 5 (the highest level of software quality) would be too costly if done internally. The company would have to spend on documentation, sophisticated technology and other costly requirements to maintain high-quality development. Increased innovation. In a global software development environment, programmers, developers and engineers come from different backgrounds. This enables companies to leverage shared best practices and innovation. This is particularly true for companies that establish offshore subsidiaries, allowing direct interaction.
Why Outsourced Software Development is a Business Trend
The goal of offshore software R&D is to develop high-quality software in low-wage countries at reduced cost. According to a study published in the Journal of Information Technology: Case and Applications, most companies in the U.S., United Kingdom, and Japan have adopted offshore software R&D because of high-quality but low-cost IT services that are available from offshore providers. Offshore Software R&D Contracts Offshore software R&D agreements vary in scale and complexity. The engagement spectrum ranges from hiring one software engineer on a freelance basis to billion-dollar outsourcing contracts between North American or European companies and offshore service providers. Outsourcing agreements may be fixed in scope and price, where the client and provider are expected to adhere to predictable processes and consequences. Other agreements are more flexible in terms of time, materials, and responsiveness to change. A good outsourcing contract helps both buyer and vendor achieve their goals and allows them to handle issues in a way that proscribes failure of the agreement. Large Enterprises Large enterprises that outsource big development projects often establish their own branch in the offshore location. For example, a company that wants to hire more than 100 software engineers and developers can save more money through local recruitment. The rapid growth of emerging markets like India and China mean that talent shortage is always a possibility. To compete with locally-established companies, the offshore branch may solve this by offering bigger salaries and better compensation packages. SMBs Small and medium-sized businesses have limited resources and may not be able to afford to compete in this way with bigger companies. Instead, successful SMBs outsource software development by building offshore development centers and virtual teams or using build-operate-transfer models. SMBs work with local service providers that handle infrastructure, legal, IT infrastructure, and HR services instead of direct development. The offshore centers are often called offshore development centers or virtual workgroups. The provider offers support and staffing solutions (i.e. recruitment and training of software developers), while the client is responsible for management and output monitoring. In this type of delivery model, the client and provider share responsibility for project delivery. According to Microsoft Developer Network, a team of software engineers must be assigned to one client and the team must have good retention rates to ensure the success of the partnership. There must also be transparent communications at all levels, from buyer-to-provider and developer-to-developer. Best practices and tools should be in place, like common coding standards, continuous integration, unit testing, bug tracking, one click build and deploy scripts, etc. For example, continuous integration leads to seamless communication and productivity even when issues arise. Communication between software engineers is of utmost importance in a distributed environment. Companies often deal with this dislocation by enforcing daily/weekly reports and meetings and through team-building events and other activities that strengthen employee relationships.
Why Companies Outsource Software Development & Research
The transformation of software development engagements from direct hiring to project-based work to complete outsourcing or offshoring is driven mainly by a company’s cost reduction initiatives, but it is not the only factor that comes into play. According to a report published by InformationWeek, enterprises are outsourcing software development to access hard-to-find technical skills, leverage the service provider’s expertise and mature processes, improve service levels, improve scalability, and focus on their core business. However, offshoring software development introduces a certain level of risk, from security vulnerabilities to poor quality products and systems. For a company to outsource software R&D, the benefits must outweigh the risks. Enterprises use different methodologies to control risks throughout the software supply chain. This includes risk assessment, setting security metrics and clear service-level agreements (SLAs), independent application security testing, establishing acceptance thresholds, and outsourcing to providers with security certifications.
Other Benefits of Outsourcing Software Development and Research
The potential to reduce development costs is the most obvious reason for software research outsourcing in the Philippines and other established offshore destinations. By hiring low-wage software engineers and developers, the company can produce or publish software at a fraction of the cost of local markets. According to Real World Offshore Development Practices by Bryan Campbell, offshore development can help an organization save 15 to 25 percent of its overall development costs. The 100 to 200 percent returns that many providers promise is possible to achieve but only with well-defined, well-designed, and straightforward projects. Cost reduction in a global software development setting can be complicated by issues arising from coordination complexities, however. Still, many companies offshore development because of other benefits: Time Zone Benefits When developers are scattered all over the globe, development work can go on 24/7 or at least allow organizations to increase daily working hours. Functionality gets written faster with round-the-clock hands-on coding. Some companies like Global Investments and International Semiconductor found that it was possible to do this during the testing phase and for support tasks and defect resolution. Not all stages of development are suitable for the “follow-the-sun” approach, however. Rapid Development Cloud-based offshore development can further speed up development. As soon as offshore developers are granted access to the cloud and remote infrastructure, coding can begin immediately. Developers do not need to replicate the technical environment. Due to the central nature of development, continuous integration happens more easily as remote developers deliver codes to the main bank. Code sharing among teams is also faster through the cloud. Better Developers Shortage of developers is usually not the reason companies outsource, but shortage of good developers. For example, there may be a surplus of developers in the U.S. and U.K., but only a few have the talent or skill level required to produce quality work. For companies willing to pay for talent at any price, outsourcing development work to Ireland, Canada and other near-shore locations is a viable solution. Modularized Development Offshore software R&D allows processes to be divided into modules and developed simultaneously across several sites to reduce cycle time. Companies have different ways of “packaging” work into bundles. Some treat offshore team members as members of one large team, while others treat them as a separate team per location that are coordinated to achieve the project goal. Managers may assign development work that does not require a lot of shuttling back and forth to Indian developers to foster independence and a sense of goodwill. Proximity to Markets and Consumers With offshore software R&D centers, companies are closer to their target market and to consumers. For example, software publishers catering to the Chinese market benefit from hiring local developers who are culturally closer to their customers, share their language, and better understand local markets. Improved Flexibility In a climate where technologies evolve at breakneck speed, organizations must be vigilant, responsive and flexible. Instead of building internal development teams and adding full-time staff, many companies choose to offshore outsource software development to reduce the cost drain and become more flexible to market conditions and customer needs. Offshoring also prevents high emotional costs associated with downsizing and lay-offs. Better Testing In many cases, it is more affordable and efficient to obtain expertise and tools from third party than sourcing or building them. Because buyers demand it, providers now offer technical expertise as well as practices that assure high quality at every stage of software development. Service providers offer new development methodologies (such as Agile), tools, frameworks and techniques that can speed up deployment of products and systems and increase process transparency to customers.
Staff Leasing in the Philippines for Outsourced Software Development & Research
Get more info about business process outsourcing and the Philippines as an outsourcing destination. You can also learn more about software development outsourcing by visiting our Software Development page. Previous Software Development Offshore Outsourcing: Main Growth Drivers Next Offshoring Software Development & Research: Industry Trends RELATED POSTS: Software Development Outsourcing Destinations Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Software Development Offshore Outsourcing: Main Growth Drivers ]]> Software Development Offshore Outsourcing: Main Growth DriversThe main drivers of growth are quality of infrastructure, global connectivity and availability of human capital.
Quality of Infrastructure
Infrastructure refers to basic facilities like telecommunications, power or electricity, satellites, and transportation facilities for roads, railways, ports all over the country, and air travel. Quality of infrastructure is the stability, pervasiveness and robustness of a country’s infrastructure. In the Gartner report, the quality of infrastructure of each country was rated on a five-point scale: poor, fair, good, very good, and excellent. Infrastructure assessment can be scored through individual components like the number of fixed telephone lines, mobile phone subscriptions and available airline seat kilometers. A fixed telephone line is an active line connecting the subscriber’s equipment to the public telephone network. Cell phone subscriptions cover the number of active prepaid SIM cards and subscriptions to a public mobile telephone service. The number of airline seat kilometers is a variable measure of the passenger-carrying capacity of domestic and international scheduled flights originating from the country. Quality of infrastructure has a great impact on a destination’s economy as well as its attractiveness to foreign investors. For example, poor or low‐quality infrastructure and limited transport can increase transaction and logistical costs and limit the population’s access to markets, reducing the competitiveness of a product or service. Improvements in infrastructure quality and existing investment climate often lead to gains in economic performance metrics such as productivity, employment, exporting activities, and foreign direct investment. However, congestion, rising property prices, and lack of business-equipped infrastructure in Tier 1 cities may drive BPO companies and investors to consider smaller areas outside central business districts (CBDs). For example, India has many cities that belong in all tiers, a good indication that the country has plenty of space for foreign investment and economic expansion. As rental prices rise in Tier I cities, the country offers many alternative locations for offshore software R&D. Tier II and Tier III cities make it possible for companies to expand and establish operations quickly and easily.
Global Connectivity
Global connectivity is a component of infrastructure. A country’s global connectivity can be measured in terms of investment in information and communications technology (ICT), the intensity of use, and its pervasiveness. Strong global connectivity drastically lowers barriers to research, knowledge and entrepreneurship. Destinations that rank high in global connectivity enable software R&D providers to become more agile, innovative and collaborative. Buyers can easily communicate with their offshore software developers through global connectivity, turning offshore R&D teams into seamless extensions of internal development teams. Countries ranked highest in global connectivity boast higher internet speeds, strong reliability and security, zero wait time, real-time display, and ubiquitous coverage. However, global connectivity alone does not make a destination an ideal location for offshore software R&D. Buyers also consider the labor pool, other infrastructure, political stability, and most importantly, costs, when choosing service providers. For example, China has high telecommunications investment per GDP with its Broadband China policy, widespread 4G availability, and massive ICT consumption (from Huawei’s Global Connectivity Index 2014), making it a very attractive market for offshore software R&D. However, some firms may be put off by the level of English proficiency of software developers and the lack of intellectual property/privacy protection. Similarly, Canada’s international bandwidth per user and IPs per capita are very strong, combined with fixed broadband affordability. Costs are high, but buyers in the U.S. and Western Europe may be willing to pay the price for the ability of software engineers to handle advanced and complex software development as well as near-shore benefits.
Availability of Human Capital
Human capital is the collection of skills, knowledge, habits, experience and abilities possessed by individuals or a population in term of its ability to produce economic value through labor. A country’s human capital is the collective value of its labor force. Like any other type of capital, human capital can be improved through different means, like investing in education and training to raise productivity and quality. According to many global competitiveness studies, the most competitive countries tend to have more highly-skilled and better educated workforce than others. This is also true about a country’s attractiveness as an offshore software R&D destination. Although it remains an important channel through which high software R&D proficiency can be acquired, education is not the only way to attain skills. Work experience and doing other activities increase an individual’s proficiency. Gartner used the labor pool measure to assess the availability of human capital and the attractiveness of the destination for offshore software R&D. Gartner looked at both quantity and quality of the current labor pool and future scalability, evaluating skill levels in areas of expertise. These included software development competency (design, architecture and analysis), R&D experience, business process experience, and project management skills. Gartner assessed the number of graduates in the country’s existing talent pool and made future projections. They also assessed career opportunities, work conditions, employee benefits, quality of facilities, labor advocacy, and adherence to high standards that ensures a country can provide the labor skills and experience required by software R&D buyers. Gartner rated the country’s labor pool as poor, fair, good, very good or excellent. India’s strong ratings in the labor pool category combined with a solid performance in all other categories, the country’s track record, and ongoing improvements in delivery, made it one of the best destinations for offshore R&D. The very large pool of software engineers, programmers, and developers and excellent IT education system also contributed to India’s rating. On the other hand, companies are attracted to the Philippines’ young and experienced labor pool.
Staff Leasing in the Philippines for Outsourced Software Development & Research
Get more info about business process outsourcing and the Philippines as an outsourcing destination. You can also learn more about software development outsourcing by visiting our Software Development page. Previous Why the Philippines is one of the Top Offshore Software Testing Destinations in the World Next How Outsourcing Software Development Helps Companies in the US, Canada, and Other Developed Countries RELATED POSTS: Software Development Outsourcing Destinations Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Why the Philippines is one of the Top Offshore Software Testing Destinations in the World ]]> Sourcefit Philippines Outsourcing Blog: Why the Philippines is one of the Top Offshore Software Testing Destinations in the WorldThe Philippines consistently leads rankings of offshore outsourcing destinations in the world. Currently, Metro Manila is no. 2 in the 2015 Top 100 Outsourcing Destinations list by Tholons. The IT and Business Process Association of the Philippines (IBPAP) projects $25 billion in revenues from the IT and BPO sector and employment of 1.3 million workers by 2015. The country’s traditional strength is contact center services, but Philippine providers are increasingly expanding into higher value services like information technology and outsourced software development and testing.
Outsourced Software Development Testing in the Philippines
According to World Bank study, the country’s IT-Enabled Services which includes outsourced software development to the Philippines, has not grown as fast as call centers, but the growth of the IT segment has certainly picked up. One study estimated the number of software firms in the country at 300, 19 percent of which employ over 100 workers (Briefer on the 5 ICT Priority Sectors, ICT Division, Board of Investments). The Philippine software association reported there were about 1739 “IT” firms in the country in 2006, using a broad definition of IT. Most of these companies are located in Manila or Cebu. Besides major testing providers, there are many local firms and subsidiaries of global software development companies that offer software testing, maintenance, app development, analysis and design. A number of them are certified at level 5 of the software Capability Maturity Model.
Attractive Destination for Offshore Software Development
Despite a relatively smaller pool of qualified and experienced developers and testers, buyers continue to find the Philippines an attractive outsourced software testing destination due to several reasons: Low Labor Cost Outsourcing software development and research can potentially reduce the cost of IT and IT-related services, including software testing, by as much as 60 percent (Outsource, Outsource, and Outsource Some More by Griswold, D. T., National Review). In Metro Manila, entry-level IT professionals receive a monthly salary of about $320 to $340 (Tholons and Global Services Top 50 Emerging Global Outsourcing Cities, 2009). Workforce The success of offshore testing projects depends on the quality and availability of a well-educated and highly-skilled IT workforce. According to the 2010 KPMG study Philippines: The New Outsourcing Hub, the country has the human resource capacity to develop a strong ITES industry. Majority of the population is young, and the literacy rate is at 92.3 percent. The country produces about 380,000 college graduates every year, of which 50,000 to 70,000 are IT/computer science or mathematics majors. Metro Manila alone produces about 22,000 technical majors each year (Global Services Media, 2010). According to KPMG, the Philippines is the number three producer of IT and technical talent behind China and India. KPMG also mentioned that unemployment and underemployment rates in the country are favorable to businesses because the ITES sector can expand more quickly. Everest Group ranks the Philippines only second to India in terms of cumulative talent competitiveness based on the size of graduate pool, experience, scalability, and quality of English. The IT industry works with educational institutions to incorporate short-term training programs in the curriculum and make graduates immediately employable. Another program involves partnerships with top-tier universities to promote post-graduate courses in BPO management to fill the demand for mid-level managers. Government Support The Philippine government is a strong supporter of outsourcing in the Philippines, aggressively promoting key sectors, including software development. Through the Technical Education and Skills Development Authority or TESDA, the government provides training for work scholarship programs and qualifications for the Philippine outsourcing sector. The government works with IBPAP, local chambers of commerce, and the Board of Investments (BOI) that provides tax incentives, brings companies together in networking events, trade missions and exhibitions, and coordinates efforts in every segment. The government has formed the Philippine Export Zones Authority (PEZA) to give foreign businesses and BPO locators tax breaks and other incentives. Infrastructure Software development and testing centers require robust, low-cost IT infrastructure. According to the Top 50 Emerging Global Outsourcing Cities study by Tholons and Global Services, telecommunications companies in the country continue to improve and expand their networks to ensure reliability. The government also continues to upgrade transport infrastructure. Low-cost and multiple international direct dialing services are readily available, and three transpacific undersea cable systems connect the Philippines to North America. Another cable system that will connect the Philippines to Hawaii, California and other Southeast Asian countries is currently under construction. The new cable system will greatly help the IT industry and companies that use up large bandwidths. In addition, the country’s supply of office space is expected to reach 6 million square meters by 2015 in Metro Manila alone (The Philippines: Outsourcing’s New Destination by KPMG, 2011-2012). Business Environment Countries that outsource to the Philippines include the United States, Canada, Europe, Australia, New Zealand, Japan, Korea, the Middle East, and others. The Philippines enjoys an investor-friendly regulatory environment, attracting software development and testing firms, both new and established. Board of Investments incentives include an income-tax holiday for four to six years and additional deduction on labor expense for the first five years from registration. PEZA incentives include income tax holidays, the option pay a special 5 percent tax on gross income thereafter, exemption from import duty fees and taxes on imported raw materials and equipment, and permanent residence status for foreign investors with initial investments of a certain amount. Cultural Compatibility The Philippines and the U.S. has had a long history of business, political and cultural affiliation (Outsourcing in the IT industry: The case of the Philippines, International Entrepreneurship & Management Journal). The Philippines has better cultural affinity with the West than other countries in Asia, making communication among buyers, providers and IT employees easier. English (typically American English) is taught from pre-school to college, making IT graduates and technicians highly articulate. According to the local Social Weather Stations (SWS), 83 percent of college graduates write in English, 72 percent speak in English, and 60 percent think in English. Economy and Political Stability Philippine President Benigno Aquino III succeeded Gloria Macapagal Arroyo during a peaceful transition in 2010. According to former IBPAP CEO Oscar Sañez, the Philippine economy has fared better than most countries during the recent global financial crisis. The strong inflow of remittances from Filipino workers overseas sustained the economy during that period. Outsourcing in the Philippines also pulled its own weight and made up for zero growth in electronics and semiconductor exports. The economy grew by a record 7.3 percent in 2010, the highest figure for over two decades. The International Monetary Fund projects a 6.7 percent GDP growth for 2015 due to higher government spending and private construction activity, while the government expects the economy to grow by 7 to 8 percent (Reuters, 2015).
Staff Leasing in the Philippines for Outsourced Software Development & Research
What is Outsourcing provides more info about business process outsourcing. For additional information about software development outsourcing, please visit our Software Development page. Next Software Development Offshore Outsourcing: Main Growth Drivers. RELATED POSTS: Software Development Outsourcing Destinations Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Software Development Outsourcing Destinations ]]> Sourcefit Philippines BPO Blog: Software Development Outsourcing Destinations, Offshoring HubsThe attractiveness of a destination for offshoring software R & D can be determined using comparative analysis of various metrics: the availability of trained, well-educated, English-speaking software programmers and engineers, low wages of skilled professionals, low production costs, availability of infrastructure like electricity and internet, favorable government policies, political stability, economic stability, cultural affinity or compatibility, existence of intellectual protection laws, and geographic location. In the early 2000s, India, Ireland, Canada and Israel were the top four software development outsourcing destinations. According to a BBC News article, India remains the world's top exporter of IT services, with the volume of offshore contracts doubling every three years. Gartner Group also said that India, China and Russia are capable of scaling up to meet the demands of large-scale software R&D projects. Other destinations for offshore software development are Argentina, Brazil, and Chile in the Americas and Ireland, Romania and Ukraine in Europe. In terms of general business process outsourcing (BPO) services, India is still the leader, followed by the Philippines. An article published on Computer World’s website reported that software development remains a work-in progress in the Philippines, and that it is viable to build a team of developers in this outsourcing destination.
Top Cities for Offshoring Software R&D
Gartner named the following cities as top outsourced software development destinations: Bangalore, Yerevan, Mumbai, Ahmedabad, Bucharest, New Delhi, Hyderabad, Chennai, Pune, Indore, NOIDA, Gurgaon, Thiruvananthapuram, Greater Toronto Area, Ottawa, Montreal, Haifa, Tel Aviv, Dublin, Lahore, Kiev, Moscow, and St. Petersburg.. India The Stanford paper reported that Indian programmers first became available through intermediary software services companies in the early 1990s when companies began to downsize their IT departments. The combination of India’s very large population, excellent engineering education system, telecommunications technology, government incentives, and ingenious business strategies helped the country become one of the world leaders in outsourced software development. Besides India, named five other top outsourcing destinations for software R&D. The Philippines According to the Computer Weekly article, the Philippines has the lowest wage and telecoms costs among the countries in this list. IT providers in the Philippines are proficient in Java and .NET and specialize in app development and maintenance of legacy applications. The country is a good location for building development teams, outsourcing straightforward software development and research projects, and legacy application maintenance. China China’s IT sector is growing, and like India, it is worth considering for low-cost cost outsourced software development. However, there is a risk of software product and systems duplication due to lack of intellectual property and privacy protection policies. There is also a language barrier as the English ability of Chinese developers may not satisfy foreign companies. Argentina Argentina has low labor costs and a large pool of highly-skilled IT professionals proficient in Spanish and English. Argentina’s programmers are tech savvy, well-educated, and demand reasonable rates. The country also has a robust telecommunications network. The country started developing its IT talent pool during the 1990s, supplying about 65 percent of software design and implementation for internet start-ups. However, according to the report from, Argentina’s government lacks support for IT outsourcing. Bulgaria Bulgaria’s software providers are good with C++, Java and open source. The developers are also good at more challenging programming due to a mix of high-level skills, strong education system, and good production quality. Many firms in Western Europe are attracted to Bulgaria and other Easter European countries because of high cultural compatibility. Software development outsourcing costs in Bulgaria are higher than in the Middle East or Africa, however. Egypt Egypt is a rising IT and software development outsourcing destination, with a highly-skilled programming workforce and solid IT infrastructure. The country claims to have the largest pool of talent in the Middle East. Its workforce is young and multilingual, and costs are very competitive. Major IT service providers like Wipro and Satyam have established outsourcing centers in Egypt. However, political volatility may deter some Western businesses from establishing operations locally or working with Egyptian providers.
Offshoring Software R & D Hubs: Tier I, Tier II & Tier III Global Cities
Gartner Group used a tiered system to rank the best cities to establish offshore IT-BPO services, including offshore software R & D. Classification was based on multiple factors, including language proficiency, government support, labor pool or human capital, infrastructure, educational system, cost, political and economic environment, cultural compatibility, and data and intellectual property security and privacy. Tier III Software Development Outsourcing Destinations Tier 3 cities are mostly emerging IT-BPO destinations, some of which are at the earliest stages of offshore software development and exporting of IT services. In India, cities with a population of less than 1 million are considered Tier III cities. Very low labor and operating costs drive some foreign companies to invest in Tier III cities or partner with vendors located in Tier III cities. Offshoring software R & D to these locations is usually done at a small scale with limited scope and clear, well-defined specifications. Tier II Software Development Outsourcing Destinations Tier 2 offshoring software R&D hubs follow closely at the heels of Tier 1 cities. These cities are approaching the level of Tier 1 locations, some at a very rapid pace. However, Tier 2 cities are considered less developed and are usually located outside central business districts. Tier 2 cities are often regional hubs with industrial and IT parks. The talent pool is smaller because of the geographic location or the size of the population. Companies may outsource to Tier 2 cities to expand or grow their business (those that already have a presence in Tier I cities) or establish pioneer IT centers and leverage the area’s lower labor costs. When rents are too steep to bear and labor cost becomes less competitive in Tier 1 locations, companies may be forced to move to Tier 2 cities. Tier I Software Development Outsourcing Destinations Tier 1 cities are considered ideal for offshoring software development and research because of their good ratings across all criteria. Tier 1 cities are considered highly commercialized urban areas with large labor pools, large supplies of prime office space, robust telecoms and IT infrastructure, high-speed internet, strong support from the government, and strong political stability. Foreign companies can typically find the largest pool of software developers and programmers employed by vendors in Tier 1 cities. Tier 1 cities are also the best places to establish offshore operations; there are many providers that assist with setup and help companies transition into the new location.
Outsource Staffing Philippines for Offshore Software Development & Research
What is Outsourcing provides more info about business process outsourcing. You can also learn more about software development outsourcing by visiting our Software Development page. RELATED POSTS: Offshore Software R & D: Guide to Outsourced Software Development & Research Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Women in Outsourcing Companies Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing Guide to Banking BPO, Financial Services Outsourcing Flash Animation Design BPO Philippines 2015 News
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<![CDATA[ Offshore Software R & D: Guide to Outsourced Software Development & Research ]]> Sourcefit Philippines BPO Blog Offshore Software R & D – Guide to Outsourced Software Development & ResearchOffshore software research and development (R&D) is the process of subcontracting a company’s software development needs to a third party or information technology (IT) service provider located overseas. Software R & D or software development in a corporate context typically refers to applied research, from conception and design to prototyping and testing of new products and systems. Software R & D covers a set of tasks that include conception, design, specification, code development, testing, and documentation. According to the paper The Globalization of Software R&D: The Search for Talent published by, the majority of software R&D projects features well-defined specifications that a service provider can easily work with. However, some outsourced software R&D projects evolve during the course of the project and require intensive participation from both the buyer and the service provider in all stages the process, from design to completion. The software development team starts by understanding the specifications or requirements and translating them into instructions for the computer that will perform a certain task. Testing is then done to check the accuracy of the specifications and translation, followed by documentation and maintenance of the program as end users request modifications. Unlike other IT R&D processes, software R & D does not involve manufacturing of the product. When the R&D process is completed, the program is ready to distribute, ship and use. According to the Stanford paper, more software is written for a company’s internal operations (in-house software segment), such as administration and finance and accounting, than is produced for products and services sold to end users (software products/services segment). Corporate software development was originally performed to improve efficiencies in finance and admin data processing. Today, software products and systems are essential in both backend and front-facing processes in all business areas and across industries.
Evolution of Offshore Software R & D
Most companies offshore software development to reduce costs. Advances in technology have made it possible for the global distribution of IT services, including software development. Highly-skilled software developers and R&D talents are increasingly in demand in a technology-driven market. Lower wages in offshore locations like India and the Philippines have also stimulated companies of all sizes to hire foreign software development professionals The evolution of offshore software R & D can be traced back to different paths. Influences such as downsizing, rapid advances in technology, global markets and customers, mergers and acquisitions, labor arbitrage or wage differentials, foreign government actions, and skills shortages have continued to push offshore software R&D forward. Downsizing In-house IT departments are the major consumers of software products produced offshore. In the mid-80s to early 90s, many companies downsized their information systems (IS) departments due to political reasons and a general misunderstanding of the importance of IT. Outsourced software development providers appeared during this period, and companies began to outsource big software development contracts, replacing in-house software employees. Rapid Advances in Technology During the same period, corporations began shifting towards client/server architectures to reduce hardware expenses and later on to manage the changes that came with distributed computing. This conversion to new systems required skills that were not available in the downsized IS departments. New skills are always required as technology keeps changing. In the early 2000s, programmers and webmasters were in demand, and companies were forced to look to third parties and locations such as staff leasing Philippines for outsourcing software R & D. Skills Shortage The growing demand for software worldwide may exhaust local labor resources, in which case the company will look to foreign locations for talent. The search for specific skills drives corporations and software publishers to offshore outsource software development. While there may be a surplus of IT professionals or technicians in a particular country, good programmers and software developers are hard to find. Some studies show that good programmers are 20 times better than average programmers, indicating that a high level of talent is important for companies who want the best people on board. Mergers and Acquisitions As a result of acquisitions or mergers with a foreign software firm, companies may gain an offshore development team. For example, a Japanese software publisher partners with a company in the U.S. to distribute their products in North America. In turn, the American software publisher gains local distribution channels and technologies because of the partnership. Global Markets and Consumers Offshore software R&D in the software publishing segment is one of the best ways to reduce development costs and additional spending. “Localization” or customizing the software to accommodate local language and standards was often outsourced to a provider in the end-user’s destination. For example, a company that produced German personal finance software outsourced some or all software development to a German subcontractor. Because software publishers must also offer support for their products (sometimes requiring local service technicians), companies often employ offshore workers. Offshore technicians handle inquiries from local customers, and install, customize and maintain software for local companies. These local services allowed the parent company to understand the systems environment and keep up with changing demands. Low-Cost Software Development Emerging markets like India offer skilled software developers at much lower rates, driving most companies to outsource. However, cost reduction is merely one factor. Some software publishers are willing to pay higher prices for offshore software R&D if the provider improves speed to market, reliability, and quality. Foreign Government Incentives Many foreign governments are helping locators (businesses that want to establish software development operations overseas) by giving them incentives to invest. Incentives may be in the form of changes in import restrictions, training and education, and tax breaks.
Staff Leasing Philippines for Outsourcing Software R & D
What is Outsourcing provides more information about business process outsourcing. Learn more about offshore outsourced software development by visiting our Software Development page. RELATED POSTS: Outsourced Software Development Case Studies and Latest Industry Trends Software Development Outsourcing Destinations Why the Philippines is one of the Top Offshore Software Testing Destinations in the World Software Development Offshore Outsourcing: Main Growth Drivers How Outsourcing Software Development Helps Companies in the US, Canada and Other Developed Countries Offshoring Software Development & Research: Industry Trends Software Development Offshore Outsourcing: 2015 Trends Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Why Outsource Data Processing: Document Process Outsourcing Solutions in Terms of Input ]]> Sourcefit Philippines BPO Blog:  Why Outsource Data Processing: Document Process Outsourcing Solutions in Terms of InputDocument-intensive tasks represent about 5 to 15 percent of an organization’s revenue, making this area a significant opportunity to reduce costs, improve the bottom line, and retain customers. Effective document process management also ensures that a company maintains brand integrity. According to the Document Outsourcing Market Forecast: 2013-2018 (covering Europe and the United States) published by InfoTrends, companies outsource document processing to reduce print volumes, reduce operational costs, access new technologies, and improve regulation and compliance. Benefits of document process outsourcing (DPO) go far beyond cost reduction. The higher costs and increasing complexity of document management in a technology-driven, digital market means that business process outsourcing is one of the best ways for businesses to achieve process transformation. Service providers have the technology (including cloud and on-premise solutions) and the domain expertise to help companies of all sizes achieve their objectives.
Cost Savings through End-to-End Document Process Management/ DPO
Cost savings remains the primary reason companies outsource document processing and data entry. Third parties offer end-to-end services that include infrastructure, the latest software and hardware, labor, support and maintenance at much lower costs. Services can also be scaled up or down based on the company’s changing needs. Xerox illustrated how a company can control costs while optimizing efficiency through records management. The client, Marriot International, wanted to streamline their accounts payable and claims management processes and reduce time-consuming paperwork. Xerox developed a single, scalable platform that integrates easily with Marriot’s enterprise resource software (ERP) and claims processing system. Xerox also reengineered workflows to reduce dependence on paper-based processes. As a result, Marriott quadrupled their processing capacity, optimized costs, and improved cash flow management.
Improved Process Efficiency with Advanced Technology & Business Process Outsourcing
One of the biggest benefits of DPO is direct access to the latest technology without upfront investment. Software is customized to the client’s needs, and the third party provides support and management during the transition process. An example is automated accounts payable solutions that integrate with ERP systems. The employees log in invoice data into the ERP software and send the documents to the provider’s service centers to be imaged and hosted. This streamlines the AP workflow and eliminates time-consuming steps like data validation. The end users can then access the digital documents and authorize payment easily. Because of increased efficiency, an organization can better manage its cash flow and suppliers. Similar outsourcing platforms can also be applied to content management, mailroom, data entry and imaging services.
Increased Speed to Market through Document Digitization Services
At all levels of the organization, large components of business processes are increasingly dependent on digitized documents. For example, when Dow Chemicals needed to safeguard and preserve 5.5 million pages of critical documents that date back to 1937, the company outsourced document digitization to Xerox. Xerox scanned, organized, and enhanced the documents and made them available online for easy access. The result was a streamlined global R&D process and improved time to market.
Improved Customer Satisfaction through Multichannel Communications
Many companies maintain close ties with their customers through regular marketing and business-critical communications. These paper-based and electronic documents include invoices, promotional catalogs, credit notes and leaflets that are sent out to customers every single day. Business process outsourcing service providers can help improve customer satisfaction by personalizing promotional materials and emails and managing outgoing mail more efficiently. For example, digital communications provider Neopost helped a UK-based bakery grow their business through automated mail sorting and reduction of paper-based statements.
Outsourcing Document Process with Staff Leasing Philippines
To effectively outsource document process management, you need to work with a service provider that’s the right fit for your company. Learn more about Outsourcing and Outsource Staffing Philippines to have a better idea of the process, the outsourcing destination and their respective advantages. RELATED POSTS: Assessing the Impact of a Document Process Outsourcing Solution Document Process Outsourcing Case Studies & Success Stories Outsourced Document Processing: Top 10 Things to Learn Document Process Outsourcing (DPO) Services: Streamline Workflows & Drive Innovation Back Office Outsourcing: Industry Trends in 2015 Why the Philippines Remains a Top Global Back Office Services Provider & BPO Destination Data Processing The Document Scanning Industry – The Role of Outsourcing in the Movement Toward Scanning-to-Process POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Assessing the Impact of a Document Process Outsourcing Solution ]]> Sourcefit Philippines BPO Blog:  Assessing the Impact of a Document Process Outsourcing SolutionOrganizations believe that they spend about 3 percent of annual revenues on document expenses, including labor, supplies, and hardware. However, the actual spending averages 5 to 15 percent of annual revenues, according to a recent study by InfoTrends. The study showed that majority of overall document expenditures are “hidden” or fragmented within the business, making actual spend value difficult to determine without a thorough assessment. These hidden costs are driving companies to reach out to Document Process Outsourcing (DPO) providers for both end-to-end solutions and assessment services. According to the paper Making it Personal: The Role of Trusted Document Advisors published by document process outsourcing provider Xerox Global Services, document-intensive functions and spend across the organization must be carefully analyzed before a solution is implemented. Benchmarking is one type of evaluation tool that allows the company, the service provider, document outsourcing firms, and office equipment manufacturers to gain insight into the market, competition, state of internal document processes and how these processes can be improved. Information uncovered from the analysis is used to create a document process solution that is integrated and in line with the company’s goals. Unlike traditional document process delivery models that focus on discrete delivery, end-to-end and integrated DPO solutions allow the company to leverage the provider’s expertise and technology without ceding control of the process. Regardless of an organization’s objectives (more efficient processes, paperless office, targeted sales collaterals), a comprehensive assessment of document processes, costs, and inefficiencies can reveal all of the company’s document needs. Assessing the impact of DPO solutions before implementation is becoming the norm. According to the InfoTrends study, a growing number of companies are including assessment services as a prerequisite before a service provider can submit a proposal. As organizations focus on reducing document-related costs and improving efficiencies through intelligent solutions, assessment services will continue to be in demand.
Levels of DPO Impact Assessment
DPO service providers use different models to evaluate a company’s document processes or data processing. InfoTrends categorizes document assessment intro three levels based on complexity, cost, and level of detail. All levels of assessment uncover actual document processing costs throughout the business and give the company a clearer understanding of what devices or solutions are required to improve efficiency and reduce costs. Level I Level I assessments are typically done in-house. These assessments often have very limited scope and require little or no assistance from an outside expert. Analysis at this level generates information that gives the company an overview and preliminary understanding of cost per page (CPC) of document processing machines and devices based on use and specifications. Level II Level II assessments are performed outside the organization by third parties. The provider gathers basic document processing data and information from secondary research then compares company data and performance metrics to data from a similar business and to industry best practices. Level III Level III is the most sophisticated and complex level of assessment. The workflow assessment involves close collaboration between the organization and service provider. The evaluation usually takes from a few weeks to a few months. Assessments may be performed in commercial print environments, in-plant/CRDs and other areas outside the organization.
Outsourced Service Assessment Process
DPO providers use different terms for the steps of the assessment process, but the underlying methodology is the same. InfoTrends identified key components of document assessment: Preparation or Planning Service providers follow a clear plan when assessing document processes. This step includes establishing a support structure internally. The provider must ensure that top management supports the project and understands why the evaluation stage is important to the success of the assessment. When the provider and management are on the same page, the result is a smooth operation. Gathering Data After the planning phase comes information gathering. The goal is to obtain spending and performance data about the organization’s document processes. Analysis The next step is assessment of the company’s current state. Data is compiled and analyzed, and key indicators are identified, including technology specs, causes of lag times, workflow inefficiencies, and potential bottlenecks. Recommendations After evaluating document processing data, the provider will recommend one or more solutions to help the company move from its present performance to a future state that eliminates inefficiencies and reduces cost and waste. The provider may suggest investing in new equipment and software, workflow reengineering or outsourcing end-to-end document management to a third party. Xerox Global Services identified specific steps when assessing the impact of a DPO solution: 1. Client information gathering. This step focuses on the qualitative aspects of the process. The provider and client discuss ideas to determine areas where the organization can improve. The provider uses tools to uncover new patterns of information and gain insights about current issues. A report is generated at the end of the process. 2. Decision support based on return on investment (ROI). The provider uses tools and methodologies to help the organization make informed business decisions. The provider gathers data to have a deeper understanding of the company’s current state and how a future state will affect costs, benefits, and risks. 3. Phased implementation. The provider creates a solution and develops a detailed implementation plan. The goal is for the company to outsource document management, data entry or data processing to a specialist or outside expert. Xerox reported that a successful outcome depends on change management and process control. A phased implementation that supports the company’s long-term goals, delivers early benefits, and makes the whole process manageable for the client and provider is recommended. In the early stages of the project, the client sets the direction and manages staff affected by the change. This approach minimizes disruption by anticipating and addressing potential problems.
Philippines Outsourcing for DPO and Back Office Support
Learn more about the Philippines as an outsourcing destination by visiting our Why the Philippines and Staff Leasing Philippines. RELATED POSTS: Document Process Outsourcing Case Studies & Success Stories Outsourced Document Processing: Top 10 Things to Learn Document Process Outsourcing (DPO) Services: Streamline Workflows & Drive Innovation Back Office Outsourcing: Industry Trends in 2015 Why the Philippines Remains a Top Global Back Office Services Provider & BPO Destination Data Processing POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Document Process Outsourcing Case Studies & Success Stories ]]> Sourcefit Philippines BPO Blog:  Document Process Outsourcing Case Studies & Success Stories
Fortune Global 500 Insurance Company
A leading Fortune Global 500 insurance company worked with document process outsourcing (DPO) provider Ricoh to improve efficiency of its mission-critical document processes, improve customer satisfaction, transition into digital services, and reduce cost. A third party supplier of banks and insurance companies, Ricoh provided securely-managed solutions and leveraged its domain expertise in the banking industry to help achieve the company’s goals. Ricoh implemented a two-stage solution. The first stage involved transferring in-house production to Ricoh’s document processing office, while the second stage focused on developing improved document processes. Ricoh handled capture and distribution of inbound documents, close-loop printing and distribution, and page-level reporting,
How Outsourcing Helped
Risk Mitigation To eliminate risk, Ricoh used closed-loop production systems as it handled over 60 million documents every year for the company. Ricoh provided a secure intranet portal where users can order a multiple print services such as brochure and poster printing. Users can also submit documents for printing, check the documents and track production. Reduced Costs A company executive said that Ricoh’s service-based approach saved them money and improved shareholder return. By allowing Ricoh to manage mission-critical document processes, the company was also able to invest resources into core and strategic business activities. Improved Process Efficiency In the first phase of the project, the company’s print and distribution services were moved to Ricoh’s external document center. Ricoh also helped manage labor and asset issues related to the transition and shutting down of in-house departments. In the second phase, Ricoh introduced automation to speed up production and closed-loop systems (such as lot check controls) to reduce errors and improve auditing compliance. Because the documents were error-free, they reached the customers faster and increased satisfaction. Digital Transformation Ricoh provided digital mailroom solutions that reduce the company’s paper trail. Instead of paper records, inbound documents were archived, validated, and uploaded to the company’s management information system. The original records and data hub were thus easier to access.
Canon UK
Canon is a world-leader in imaging products for home and office. To maintain its strong market position and improve service levels while reducing costs, Canon UK (based in Reigate, Surrey) decided to work with document processing specialist Swiss Post Solutions. Canon realized that transforming the company’s document-intensive processes would require an outside expert. By working with Swiss Post Solutions, Canon gained access to innovative solutions and facilities required to run the company’s busy operations more efficiently.
How Outsourcing Helped
Increased Focus Outsourcing document processing to Swiss Post Solutions allowed Canon UK to invest internal resources into its core business. Access to Domain Expertise Canon UK understood that some processes were outside their domain expertise. Working with Swiss Post Solutions ensured that the right documents were sent to customers as quickly as possible, data was easily accessible, documents could be destroyed when required, and customer service exceeded expectations. Swiss Post Solutions started by using its benchmarking database to compare Canon’s practice with market best practices. It gave the company insight into the market and their competitors and ways to improve. Improved Process Efficiency Swiss Post Solutions scheduled mail rounds to prevent congestion during peak hours. Because the in-house staff was trained to cover for absent workers or those on holiday, it reduced the company’s dependency on untrained contract employees. New Technologies Introduced uFile, uBook, and iTrak were among the technologies that Swiss Post Solutions introduced to improve courier process efficiency. uFile is a data archiving management system, uBook is a booking and management system, and iTrak is a tracking system for inbound signature deliveries. According to Canon UK’s Facilities Manager, iTrak helped the company reduce waste by eliminating paper records and allowed packages to be tracked from dispatch to delivery. Improved Staff Retention and Productivity To improve career progression and retention of Canon UK employees, Swiss Post Solutions introduced personal development plans to guide the workers and basic equipment training to reduce reliance on engineers. When machine problems arise, mailroom staff checks the machine first and fixes the issue, if minor. Only serious problems are escalated to engineers.
Baltimore Gas and Electric (BGE)
Baltimore Gas and Electric Company (BGE) is Maryland’s largest gas and electric utility provider, employing about 3,200 people and serving over 2 million customers in the entire state. BGE is a subsidiary of Exelon Corporation, with approximately $27.4 billion in revenues in 2014. BGE partnered with document process outsourcing provider Xerox to realize cost savings, improve process efficiency and boost customer satisfaction.
How Outsourcing Helped
Streamlined Billing Statements BGE wanted a more efficient, cost-effective way to send regular billing statements to its clients. BGE knew that outsourcing was the best way to achieve these goals. Xerox served as a single source provider of printing services, printing management and client communications. Xerox streamlined information to reduce the number of pages (reduced two-page billing statements by 99 percent), reduce print and mailing costs, speed up turnaround time to ensure regulatory requirements are met, and make the statements easier to understand. Xerox also increased the font size and positioned relevant information prominently for better accessibility and visual appeal. The provider planned to customize the statements with targeted information in the future. Reduced costs A BGE senior analyst reported that the company achieved dramatic cost savings ($297,000 savings in printing and mailing costs alone) as a result of the partnership with the DPO provider, as well as a reduction in paper output by 7 million sheets annually. Improved Customer Satisfaction Because the billing statements were simpler and easier to understand, Xerox helped lower complaints and call center inquiries while increasing customer satisfaction.
Seco-Carbology (Seco Tools)
Seco-Carbology or SC (now Seco Tools, Inc.) is a multinational developer, manufacturer and provider of innovative metalworking products for machining, including milling, hole-making, holding, and turning tools. SC wanted to support the sales activities of its distributors while retaining control over its brand. Specifically, SC wanted their dealers to access and customize sales collateral materials directly. The company’s existing sales collateral production system was time-consuming and prone to errors. The goal was to eliminate printing and storage in the document lifecycle and shorten the turnaround time in obtaining sales collaterals by allowing dealers to order preprinted sales materials easily and customize them. SC chose Xerox to provide full-service marketing and document processing solutions to achieve its goal.
How Outsourcing Helped
Reengineered Communications Reengineered documents were the key to driving down costs and improving client acquisition and retention rates at Seco Tools. The document advisors at Xerox combined the latest design techniques and behavioral science studies to improve the effectiveness of paper and digital communications. Xerox drew on variable data showing that personalized, one-on-one sales collaterals increased their value to the recipient, and that color personalization was more effective than black and white personalization at increasing the response rate. Personalized sales communications also reduced cost per response to 54 percent and increased sales by an average of 93 percent. Using their domain expertise, document advisors at Xerox were able to improve brand recognition, boost sales and improve the bottom line. Increased Dealer Participation Due to the streamlined process of obtaining sales collaterals, both dealer participation and sales of certain products increased more than 300 percent to meet demand. Customized Sales Collaterals Xerox created an almost 100 percent automated web-to-print portal that allowed dealers to customize and easily order sales and marketing materials from SC. A job ticket and a PDF file were created for each order received. Xerox also designed a tutorial for the distributors to help them learn the new system. Reduced Turnaround Time It used to take about a month for dealers to obtain sales and marketing materials from SC. Through the web-to-print on-demand portal, Xerox eliminated pre-printing and reduced the turnaround time from four weeks to one week.
Staff Leasing Philippines for Document Process Outsourcing
There are many takeaways from these outsourcing case studies and success stories. One of them would be finding a service provider that’s the right fit for your business, whether this would be staff leasing in the Philippines or any other outsourcing location. These success stories also point out how crucial it is to work with a BPO company that can provide securely-managed solutions and domain expertise. Another common thread from these case studies of successful document process outsourcing projects – knowing exactly how the business process outsourcing company will handle risk mitigation, reducing costs, process efficiency improvement, reducing turnaround time, reengineering communications, increased focus, improved customer satisfaction, and digital transformation for your company. It’s also worth noting if your business can gain new technologies, better staff retention and productivity, and, if applicable, streamlined billing statements to clients, increased dealer participation and sales as a result of the streamlined process and increased productivity. Is outsourcing document process right for your business? Learn more by visiting our Should You Outsource page. You may also want to gain more information about Outsource Staffing Philippines. POPULAR POSTS Women in Outsourcing Companies Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing BPO Philippines 2015 News Flash Animation Design
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<![CDATA[ Evolving Workplace, Technology and How they Affect Women in Outsourcing, Shared Services & Managed Operations ]]> Sourcefit Philippines BPO Blog: Evolving Workplace, Technology and How they Affect Women in Outsourcing, Shared Services & Managed OperationsThe business process outsourcing environment has many unique features that distinguish it from traditional workplaces. BPO services range from low-level data entry and back office processing to high-value solutions like consulting and strategic roadmaps, and the sector depends on a steady influx of skilled knowledge workers. Employees tend to go where the jobs are instead of settling down permanently in one location and working from there.
The Evolving Workplace: How it Affects the Outsourcing Industry & Women BPO Employees
BPO employees are also more likely to be shifted between different centers, and some may be sent abroad frequently for assignments or training. This can make employees itinerant and unable to stay in their jobs long periods, particularly in the early years of their careers (Gender Issues of Women Employees in the Workplace in the Indian BPO Sector by Murty, Pedireddi and Imtiyaz). In India, majority of the IT-BPO workforce is less than 30 years old, of which 25 percent or more are women (NASSCOM Foundation). A large proportion of the female BPO workforce is made up of young single females, who are likely to find job stability less attractive than older, married women in managerial positions, which makes up less than 6 percent of the female workforce. However, a new workplace trend is shifting from people mobility to mobility of products and services through the use of technology, which may somewhat reduce physical mobility in the BPO sector. The Philippines is another powerhouse that employs over 1 million people in the IT-BPO sector, more than half of which are women (IBPAP 2008). Like female BPO workers in India, women mostly work as call center agents and data processing specialists. In early 2015, the attrition rate in the IT-BPO sector hit an all-time low of 20 percent (2015 Towers Watson’s annual BPO/Shared Services/Call Center Industry Total Rewards Survey), indicating that companies are improving their compensation and benefits package to reward performance and retain employees. Many companies are also offering wellness and programs exclusively designed for female employees. Safer Workplaces One study reported that for women, feeling safe is the number one factor affecting their job satisfaction. This is also true for women in the IT-BPO sector, with its 24/7 nature that requires employees to work at night. BPO companies are enforcing stronger policies to ensure the safety of their female workers. In India, many firms provide free pick-up and drop off of women workers, with all vehicles equipped with GPS. Elsewhere, companies are taking a closer look at perceived security levels and taking immediate action in case of threats of violence. More Women in Leadership Roles While there are plenty of women entering the IT-BPO industry, women in leadership/boardroom roles and highly-skilled technology positions remain underrepresented. However, the industry predicts that more women will reach the top in business roles. Wipro senior VP for healthcare and life sciences said that in a few years, India’s IT industry will start looking like India’s banking industry, which is dominated by women CEOs. This trend of upward mobility for women can be traced to the flat-structured and informal work culture at leading Indian IT companies that also implement world-class HR practices. Earlier Financial Independence The rising wages in the BPO sectors of India and the Philippines are giving women more disposable income at a young age and opportunities for promotion even for those with minimum educational qualifications. This helps women reach their career and financial goals earlier than expected (Health, Social and Psychological Problems of Women Employees in Business Process Outsourcing: A Study in India by Amrita Gupta). Better Work-Life Balance Women look for companies that offer work-life balance, especially married women and women with children. Some BPO companies are revamping their compensation and benefits packages to better attract and retain women employees. These companies offer benefits like flexible shifts and work-from-home options, generous maternity leave policies, and sabbaticals to further the education of their female employees.
Technology, the Outsourcing Industry & Prospects of Women Employees
Sourcefit Philippines BPO Blog: Women in BPO, Shared Services, Managed Operations, Offshore IT - Technology, the Outsourcing Industry & Prospects of Women Employees
Rapid advances in technology have ushered in an era of female empowerment in the IT-BPO industry. Information and communication technology has greatly improved income and wages and increased the number of jobs in the sector. The impact of technology is clearly seen in leading BPO destinations India and the Philippines. According to the paper Digital Technology and Women Empowerment: Employment Dimensions in India by Ranjana Agarwal, India’s IT-enabled services grew at a rate of 65 percent in the last decade. The IT industry was expected to create 2.2 million jobs by 2008, employing women in IT-enabled services like call centers, technical support, medical transcription, back office processing, engineering and creative services, payroll and HR, and insurance claims processing. The IT-BPO industry is unique among other industries in that hiring is dependent on skills and talent and not gender. In India, about one third of the IT-BPO workforce is made up of women (Nasscom 2013), and about 25 percent of all science and engineering graduates in the country are women. Tata Consultancy Services Ltd (TCS), India’s largest IT services provider, employs about 100,000 women, which is 33 percent of its total workforce. Women also make up 34 percent of the workforce at Infosys and 30 percent at Wipro. In the Philippines, women represent about 50 percent of the overall IT-BPO workforce, which is expected to employ 1.3 million people by 2016 (IBPAP, 2014). Studies attribute the growing number of women in the IT workforce to the nature of the work. Women are suited to IT roles because these require good communication skills, excellence at multiple tasks, and alignment of individual goals with business goals—attributes that are most common in female professionals (Frost & Sullivan). However, the proportion of women in leadership positions and very technical roles remain low. Men continue to outnumber women in the tech field by 4 to 1. While female IT leaders perform as well or even better than their male counterparts, there are very few female tech CEOs. Their number has also remained static since 2004 (Gartner CIO Agenda Survey Analysis by Gender). Gartner reported that the IT security segment in particular is short on women, representing only about 11 percent of the overall IT security workforce.
The Future of Women in IT and Outsourced IT Services
Online IT Work A new survey called Women in Technology by online staffing platform Elance indicates that virtual work may help close the gender gap in IT work. In the study that polled over 7,000 professionals worldwide, women found more IT jobs online than in the real world. Seventy percent of these women said that virtual work gives them more opportunities to succeed than traditional on-site work, and 60 percent said that it is easier to work as a contractor with multiple clients than finding full-time work in the IT sector. Working mothers also said that virtual work allowed them to balance work and family time better. Majority of women found that online IT jobs allowed them to improve their skills through more learning opportunities than traditional on-site work. To further encourage women to enter the IT-BPO field, respondents in the Elance study suggested providing equal pay to men and women with the same skills, having parents and teachers inspire girls and young women to study IT, providing more mentoring support for women, and providing more female role models in IT. IT Entrepreneurship According to NewRelic’s infographic The Fiercest Women in Tech, IT companies with more women in leadership roles have 34 percent higher return on investment. Over 187 million women worldwide own businesses and are opening businesses 1.5 times faster than men, suggesting that IT entrepreneurship is another field where women can close the gender gap. PREVIOUS Women in Outsourcing POPULAR POSTS PROMOTING EQUALITY, PROMOTING DEVELOPMENT: Empowerment and Opportunities for Women in BPO Celebrating Women’s Day and Month: Women in the Offshore Outsourcing Industry Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World 5 Keys to Improving Quality in Offshore Business Process Outsourcing
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<![CDATA[ Women in Outsourcing ]]> Sourcefit Philippines BPO Blog:  Women in OutsourcingMore than 50 percent of the world’s population is made up of women, but their contribution in the workplace and global economic growth remains under-represented. According to the International Monetary Fund Staff Discussion Note study Women, Work, and the Economy: Macroeconomic Gains from Gender Equity, men continue to lead in terms of labor force participation, while women do the majority of unpaid work. The number of women entrepreneurs and those in senior management positions also remain low, and labor market issues continue to restrict women’s options for paid work. Part of the reason is a global market that remains divided along gender lines. Although there has been significant progress in the last 100 years, women’s participation in the labor market could be greatly improved.
Women in the Workforce: History & Workplace Changes in the Past Decades
Historically, women have been stereotyped as weaker than men, and this belief continued to resonate in the modern workplace. The primary role of the female was seen as a caregiver and the male was considered the provider. Companies once hired women only before they reached marriageable age and fired them when they got married. Forty percent of single women had jobs in 1900, while only five percent of married women were employed (In pursuit of equity: Women, men, and the quest for economic citizenship in 20th-century America by Kessler-Harris 2001). Women college graduates of 1900 and 1920 also had to choose between family and career (The meaning of college in the lives of American women by C.D. Goldin, 1992). Teaching was one of the few professions open to women in the 1900s to 1930s, but married women were excluded. Female teachers who wished to have a career in education during this period were thus prevented from having families, and the few women teachers who were successful in combining career and family taught only later in life and for short periods (Career or family? Choices and constraints facing Radcliffe College graduates by J.A. Preston, 2003). The shortage of men in World War II started to open up opportunities for women in the workforce. Both single and married women were recruited for work suitable only for men, and teachers with or without children were able to teach when the male teachers went to war. However, women were forced to leave factories when the war ended, and their jobs were given to returning soldiers. The female “nurturer” myth was reborn and allowed companies to fire pregnant women as well as preventing women with young children from seeking work (Unbending gender: Why family and work conflict and what to do about it by J. Williams, 2000). In the 1970s, male wages started to flat line, making way for more women to enter the workplace. Women started to work in areas previously dominated by men, and even mothers with young children entered the labor force. By the year 2000, there was a significant increase in the number of two-income families or dual-earner couples, with 40 percent of wives earning higher salaries equal to or larger than their husbands’.
Modern Trends
Today, more women than men receive bachelor’s and master’s degrees. According to The First Measured Century by Caplow, Hicks & Wattenberg, the number of women getting doctorate degrees are also approaching that of men. One third or incoming MBA students and half of law and medicine incoming classes are women (University of Michigan Business School & Center for the Education of Women, 2000). Due to decreased fertility rates and longer life spans, activities outside of child-rearing and child-bearing are also taking up a larger percentage of a woman’s life, allowing women to pursue careers full-time and until retirement. A 2013 Pew Research Center survey and census data analysis found that young women (25 to 32 years old) today are better educated than their male counterparts and are making more money compared to men their age due to rising wages of women and falling earnings of men. However, young women are more likely to say than young men that they do the same job and get paid less. The survey also found that women are more likely than men to say that change is needed to achieve gender equality in the workplace. Like men, women want job security, but women are more likely to say that being a working parent makes career advancement more difficult.
Women in Outsourcing: IT Outsourcing, Call Centers, Outsourced Accounting & Other BPO Jobs
Sourcefit Philippines BPO Blog:  Women in Outsourcing - IT Outsourcing, Call Centers, Outsourced Accounting & Other BPO Jobs
Companies in the United States and Europe have been outsourcing manufacturing for decades, but it was in the late 1990s when tech firms were preparing their information systems for the Y2K threat that offshoring as we know it today took off. Due to a unique mix of information technology expertise and a very large talent pool, India became the primary destination for offshore services during this time. India continues to lead the world today in IT and business process outsourcing, followed by the Philippines, Poland, China, Costa Rica, Ireland, Czech Republic and many countries in the Asia-Pacific region (Tholons 2015 Top 100 Outsourcing Destinations). India BPO Parallel to the steadily eroding myth in the West that women are the center of home and family, workplaces in India, the Philippines and other emerging economies have undergone similar transformations. According to a Nasscom India study, women account for about 50 percent of the business process outsourcing workforce in urban areas in India, while women working on night shift in the BPO sector constitute over 40 percent of the total workforce. However, despite the major economic contribution by women to the Indian BPO industry, there are many challenges that can undermine the progression of gender equality in the workplace. According to the CEO of Indian home portal, communication and self-expression are key challenges for women in the country’s BPO sector. Women at junior levels often fail to speak up against issues like lack of safety measures in the workplace and graveyard shift work. Female BPO workers do not feel 100% safe despite considerable improvements like company pick-up and drop-off vehicles, hotlines and SMS services that monitor commuting employees, and background checks on taxi drivers. Issues also arise when a female BPO worker gets married. Instead of taking a leave of absence, women are often forced to quit their jobs because of pressure from her husband and family members. A Mercer and Nasscom survey on gender inclusivity in India’s IT-BPO sector showed that besides safety concerns, female workers struggle with flexible working hours and policy on leaves and absences. The study also revealed that companies wishing to attract and retain female BPO talents should have anti-harassment policies in place, healthcare and awareness programs, women’s recreational activities and family days. The Assocham Social Development Foundation (ASDF) suggested that the Indian government should make it mandatory for companies to install GPS in cabs and CCTVs in the workplace, and introduce self-defense training classes and efficient systems to address complaints by female employees. Philippines Outsourcing
Sourcefit Philippines BPO Blog:  Women in Outsourcing – Philippines Outsourcing
The Philippines’ BPO sector has grown exponentially in the last decade, with a projected $25 billion revenue target and a 1.3 million employment target by 2016 (IT and Business Process Association of the Philippines). Call center and back office services (finance and accounting, data entry, medical transcription, IT) remain the biggest service segments, accounting for 70 percent of BPO revenues. BPO companies are concentrated in urban areas like Manila and Cebu, and the main market is the United States (Philippines IT-BPO Investor Primer, IBPAP 2012). The BPO sector accounts for only about 1.7 percent of the Philippines’ total employment, but it remains a key source of jobs for college-educated women in the country. In 2008, women accounted for 55 percent of all BPO workers. About 80 percent of women employed by BPO companies have degrees in the social sciences, engineering, and business (Gender Equality in the Labor Market in the Philippines, Asian Development Bank).
Impact Sourcing and Women Workers
Impact sourcing is the employment of disadvantaged but high-potential people in web-based or BPO jobs. Because work in the BPO industry has the potential to raise the standard of living of disadvantaged communities, some companies are providing work to the world’s poorest citizens in low-employment areas. According to the co-founder and chief development officer of Digital Divide Data (DDD), an impact souring company that provides content services to high-profile clients like Harvard and Stanford, there are more than 24 BPO companies in Bangladesh, Cambodia, Ghana, Haiti, Kenya and Pakistan that hire disadvantaged workers to deliver services to global clients. Organizations like DDD can help expand opportunities for low-income women to gain better skills and get the career they want in locations were education and jobs in the IT industry are very limited. The growth of global business process outsourcing is furthering employment opportunities for women all over the world. To maintain this positive trajectory, governments must ensure that women have the necessary skills for BPO jobs, introduce initiatives that make it easier for women to be employed in areas previously dominated by men (e.g. information technology), improve safety and working conditions especially for night-shift female workers, and analyze reasons for pay differentials between men and women in these sectors.
Outsourcing Industry: Benefits for Women
Business process outsourcing is a growing sector of the global economy, presenting expanded employment opportunities for women and increasing the demands made on them. The impact of outsourcing on women is shown clearly in emerging markets and top BPO destinations India and the Philippines, where the sector has generated new income and entrepreneurship opportunities especially for well-educated women. Despite the challenges, the IT-BPO industries in India and the Philippines are noted for extremely high diversity in terms of gender. Above all other factors, workers are hired based on talent, allowing highly-educated women to assume a wide range of positions in the industry. Improved Income Global impact sourcing alone is projected to reach $20 billion in revenues by 2015 ($10 billion of which will be the direct income for 780,000 people) and employ 2.9 million people by 2020 (Avasant). The Monitor Group (2011) suggested that employees in data entry and conversion, content management, transcription, call center services, digital publishing and other BPO segments will increase their income from between 40 percent up to 200 percent. New Skills Acquisition Employment in call centers and BPO firms help women acquire new hard and soft skills, not only improving their product knowledge and technical proficiency, but also their assertiveness, communication, listening and interpersonal skills (Health, Social and Psychological Problems of Women Employees in Business Process Outsourcing: A Study in India by Amrita Gupta). Empowerment Relatively high wages and benefits provided by BPO firms allow female workers to gain more autonomy and freedom, empowering them. Well-educated women working in call centers gain knowledge and experience from both their local environment and the West, making them better equipped to be global employees. For example, some Indian women work in call centers not only to support their family but also to advance their education and do work that they truly want (Can Career-Minded Young Women Reverse Gender Discrimination? A View from Bangalore’s High-Tech Sector by Clark and Sekher, 2007). Increased Investment in Healthcare Thanks to higher wages and female-friendly policies, the BPO industry is helping women invest more in health and wellness. Many Indian companies provide generous maternity benefits and 24/7 childcare for their female employees (How Outsourcing is Boosting Prospects for Indian Women, CNET 2012). Changing Perceptions of Female Roles and Abilities In India, parents traditionally have enormous influence over their daughters’ career choices. With the growth of the IT-BPO sector, middle-class parents are becoming comfortable with their daughters working in graveyard shifts or travelling for business.
Greater Participation in the Male-Dominated Outsourced IT Segment
Sourcefit Philippines BPO Blog:  Women in Outsourcing – Outsourced IT Segment
Information technology is a male-dominated segment, but the global expansion of IT and BPO has opened up new avenues for women workers. The IT-BPO outsourcing industry in India and the Philippines is a meritocracy that favors skills and talent above gender, allowing highly-skilled, educated women to hold positions in an environment previously open only to men. The promise of higher wages and female-oriented benefits can encourage women who are still in school to major in IT and software degrees to further improve their employability. Nasscom India estimated that women made up 20 to 25 percent of science and engineering graduates in the country. In 2008, women accounted for 28 percent of the country’s overall IT workforce, a relatively higher proportion compared to other sectors of the economy. Gender equality in the Indian workplace has spread to rural areas and small towns as well, where IT-BPO jobs are giving disadvantaged women better earning opportunities and ways to learn new skills and knowledge-based services. Improved communications technology is breaking down barriers to women’s economic advancement. Women can now engage in electronic activities like e-commerce, e-government, and e-learning, and without the need for face-to-face interaction with men, especially in areas where the practice is discouraged.
Case Studies & Examples in BPO: Opportunities for Growth and Self-Reliance
Employment for Women in India’s Rural BPOs According to industry estimates, women make up about half of the BPO workforce in urban areas in India, but the percentage is even higher in rural BPOs. An article published by the Times of India found that some rural business process outsourcing firms hire more women than men. The BPOs reported that over 60 percent and sometimes even 100 percent of their employees are women. Women are just as good as men in terms of skills and understanding a task, and they are more likely than men to stay in a job for the sake of loyalty, said the HR manager of rural BPO firm Desicrew Solutions. The employees of Desicrew Solutions are 80 percent women, housed in seven offices in the villages of Tamil Nadu and two centers for women in the area. Sometimes, necessity drives rural BPOs to operate all-women facilities. The CEO of JSoft Solutions said that many fathers do not want to have their daughters working with men, and the social stigma of seeing a boy and girl together is so pervasive that they had no choice but to hire only female employees. Vintes is another rural BPO operating in Kerala that has an all-female workforce. The Vintes director explained that young men in rural areas are better equipped to go to cities and seek better paying jobs, while young women, including those who are educated, often stay behind in the villages due to family and societal pressures. The surge in employment of women in rural BPOs is also driven by better entrance test scores in women compared to men. HDFC Bank gave the same test to men and women applying for jobs, and the women were more successful. Today, 75 out of 125 employees in HDFC’s captive BPO in Andhra Pradesh are women. JSW Steel: Improving Living Standards of Women in Vidyanagar Women in rural India face many challenges: lack of access to education, lack of employment opportunities, early marriage, and family responsibilities. JSW Steel helped improve rural women’s economic status and raise their standard of living by establishing BPO operations in Vidyanagar, an emerging industrial complex. JSW set up a center to train over 1,000 female high school graduates in the area. The women were also given a stipend and transportation allowance for six months. Currently, 150 women are hired as business associates, while others have found jobs in JSW steel and other companies. Due to skills-based employment opportunities, JSW also helped reduce migration to other areas and retain skilled workers for new industries in the region. Political and Capital Empowerment of Women in Kerala In 1999, the government of Kerala State in India started outsourcing IT services, data entry and digitization, and PC assembly and maintenance to cooperatives made up of below-poverty-line women. In the study called Social Outsourcing as a Development Tool, published in 2009 by the University of Manchester, the women described their empowerment in terms of improved self-identity, self-confidence, and status. They were more confident when dealing with other people and approaching institutions. Other members of the community also approached them with IT-related questions and questions on how to set up a business. Ten percent of the respondents reported that they were more involved in politics, and a similar proportion of women said that the project increased their participation in social functions. These women were also responsible for hiring and managing male employees, breaking away from traditional female goals of static security. Economic Diversification for Women in Saudi Arabia Saudi Arabia’s firs all-female business process outsourcing center opened in 2014, giving local women employment opportunities in HR, finance and accounting, materials supply, and back office services. In a country where the unemployment rate among women is 34 percent in 2013, the center’s opening is good news to female graduates. The center’s inauguration will boost Saudi Arabia’s competitiveness in the outsourcing sector, and more important, create jobs for skilled Saudi women. Owned by General Electric (GE), Tata Consultancy Services (TCS), and Saudi Aramco, the 3,200 square meter facility is expected to create 3,000 jobs for women over the next three years. About 300 employees have already been hired, of which 90 are fresh graduates. The center’s first female employees received more than 80,000 hours of intensive training in areas like MS Excel, presentation skills, corporate etiquette, global culture, and communications. TCS CEO Natarajan Chandrasekaran called the event a “new era” for the country’s IT-BPO industry.
Increased Employment in India, China and the Philippines
Sourcefit Philippines BPO Blog:  Women in Outsourcing – Increased Employment in India, China and the Philippines
Top outsourcing destinations India, China and the Philippines are experiencing strong economic growth through BPO, and the women in these countries are benefiting from improved employment prospects. In the Philippines, for example, the BPO sector employs over 1 million workers, half of which are women. India’s ICT ad back office services boom is also increasing job prospects for women. The BPO sector offers unprecedented flexibility in time and space, allowing scores of women to work at home or outside the office for the first time. Women can now improve their incomes and become more financially independent while having the option to assume traditional roles. PREVIOUS Promoting Equality, Promoting Development: Empowerment and Opportunities for Women in BPO, Celebrating Women’s Day and Month: Women in the Offshore Outsourcing Industry NEXT Evolving Workplace, Technology and How they Affect Women in Outsourcing, Shared Services & Managed Operations POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing
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<![CDATA[ Celebrating Women’s Day and Month: Women in the Offshore Outsourcing Industry ]]> Sourcefit Philippines BPO Blog:  Celebrating Women’s Day and Month: Women in the Offshore Outsourcing IndustryWe are closing the month on a high note – celebrating International Women’s Day (IWD) and National Women’s Month with two posts about women in the outsourcing industry. IWD is celebrated globally on March 8. In the Philippines, the entire month of March is celebrated as National Women’s Month (Proclamation No. 227 s. 1988). You can learn more about the 2015 celebration on the Philippine Commission on Women (PCW) website. This year's celebration is doubly memorable because it also marks the 20th anniversary of the Beijing Declaration and Platform for Action. This historic declaration from the Fourth World Conference on Women in 1995 was signed by 189 governments. It’s a roadmap that sets the agenda for realizing women’s rights across the globe. You can also find out more about the goals of equality, peace and development from CEDAW. The Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) was adopted in 1979 by the UN General Assembly and serves as an international bill of rights for women. Our first post, Women in Outsourcing, gives an overview of women in the workplace, not just in the BPO industry, and the changes that happened in the recent decades that helped make taking on jobs in the outsourcing industry an option for women. We also specified some of the ways the outsourced services industry can help women become more self-reliant and provide financial stability for themselves and their families. The post also features some case studies or examples of how women gained opportunities for growth in BPO. The second article, Evolving Workplace, Technology and How they Affect Women in Outsourcing, Shared Services & Managed Operations, provides more information on workplace changes and technology. These two factors are driving change in business and in the outsourcing industry as they also help women gain employment and the opportunity to improve their prospects. Figures from the PCW website indicate that more women in the Philippines are attaining higher education. During the school year 2005-2006, for example, 54.48 % or more than half of 2,483,645 total enrollees are females.

SY 2005-2006 Enrollees in the Philippines





54.48 %


Source: Philippine Commission on Women

On the same school year, majority of female enrollees in the Philippines took up Medical and Allied Discipline courses, followed by Business Administration and Related Discipline courses.


Medical, Allied Discipline

Business Administration, Related Discipline

SY 2005-2006 Total

27.44 %

24.35 %

SY 2004-2005 Total

23.25 %

24.77 %

Source: Philippine Commission on Women

Figures released on July 2009 by the Philippine Statistics Authority indicate that there are more female employees handling business process outsourcing tasks in the Philippines:

2005 Total Workers in BPO Philippines






Source: National Statistics Office, 2005 Annual Survey of Philippine Business and Industry

Women outnumber men in at least three outsourced services: Medical Transcription, Data Processing and Call Center services.

Outsourced Services



Medical Transcription

74.4 %

25.5 %

Data Processing

65.2 %

34.8 %

Call Center

58.8 %

41.2 %

Source: National Statistics Office, 2005 Annual Survey of Philippine Business and Industry

Majority of the 45,225 women surveyed work in call center companies in the Philippines:

BPO Service


Call Center

62.8 %

Data Processing

14.4 %

Other Software and Consultancy and Supply

8 %

Other BPOs

11 %

Data Activities and Online Distribution of Electronic Content

3.8 %

Source: National Statistics Office, 2005 Annual Survey of Philippine Business and Industry
Skills, education, training, technology, and an evolving workplace are helping open doors for more women to gain employment and opportunities, at least as far as these services in the Philippine outsourcing industry are concerned.We hope that the two new posts, Women in Outsourcing and Evolving Workplace, are continuing explorations of some of the ideas in our 2012 article Promoting Equality, Promoting Development: Empowerment and Opportunities for Women in BPO . If you want to learn more about outsourcing, please visit What is Outsourcing. We are certainly eager to see the figures from 2006-2015 at the PSA or PCW websites. Did the trends seen in this survey continue? Let us know what you think through our comments section below or through our social media channels. Share This: ]]>
<![CDATA[ Document Process Outsourcing (DPO) Services: Streamline Workflows & Drive Innovation ]]> Sourcefit Philippines BPO Blog:  Document Process Outsourcing (DPO) ServicesDocument-intensive business functions account for about 5 to 15 percent of an organization’s revenue, according to a paper published by document process outsourcing provider Xerox Global Services. Document processing is a key area where businesses can realize significant savings, improve the bottom line, streamline workflows, and drive innovation. A growing number of DPO providers are offering document processing solutions beyond traditional, discrete services and moving towards end-to-end process management. This service delivery model enables buyers to retain control of their brand, achieve end-to-end cost transparency, and achieve an ideal balance of stock quantities. Key DPO providers like Canon, Xerox and HP offer integrated services that digitize, capture, organize, print, distribute, and archive information. Providers also help optimize transactional documents through real-time, interactive, and high-volume document creation using market-leading methodologies and advanced technology. Smaller providers may focus on delivering discrete or individual DPO services that are tailored to a specific industry.
Document Process Outsourcing Services by Industry
Banking, Financial Services and Insurance Service providers handle processing and printing of loan, mortgage and credit card applications, tracking and updating applications, creating and maintaining commercial and individual lending documents, storing signature cards, digitizing statements, creating and presenting reports and documents, and financial data entry. Manufacturing In the manufacturing industry, DPO services include order requests processing, scanning of purchase orders, processing warranty claims and safety communications, creating floor plan agreements and updating, tracking, retrieving and maintaining invoices. Healthcare The Affordable Care Act or ObamaCare has initiated sweeping changes in healthcare document processing. DPO service providers are rising to the occasion with broader offerings that include cloud-based services. Traditional DPO services in the healthcare sector include printing, mailing, management, and production of bills and statements (including explanation of benefits or EOB statements), customizing and presenting medical bills and statements, processing beneficiary changes, and scanning claims. Consumer and Retail DPO services in the retail sector include printing, archiving, and storing contracts, creating and presenting bills and statements, bulk mailing, producing electronic bills and documents, scanning invoices, and processing customer surveys. Public Sector or Government Government DPO services include managing paper and electronic communications, processing government forms and property tax records, storing sensitive and private data, processing mail room tax returns, scanning and archiving communications from citizens, and digitizing, scanning, and extracting data. Transportation For efficient document processing, businesses in the transportation sector hire providers to process, and manage invoices, rental agreements, maintenance records, compliance and regulatory documents, tickets, travel contracts, customer correspondence and scheduling distribution.
Back Office or Transactional DPO Services
Some providers offer only discrete or transactional DPO services using flexible service delivery models. Individual DPO services include document scanning, data capture, document preparation, printing, data entry and validation, and cloud-based document access and storage. The provider may also offer workflow engineering, consultancy and other services that are on the high end of the DPO value chain. Document Preparation Documents are inventoried, labeled, and organized before they are scanned. The service provider will scan, route or dispose of related documents (as required) in the preparation process. When office space is limited, some providers offer mobile scanning to keep information on-site. Data Capture and Data Entry Providers use advanced imaging and character recognition technology to acquire data from paper and electronic sources and convert information into machine-readable format. Third parties also provide high-resolution scanning for critical documents and linking related documents for easy retrieval. The technology used is often proprietary to the company, like OCR (optical character recognition), ICR (intelligent character recognition), and ADR (automated document recognition) software. Some providers offer multi-channel capture at the enterprise level to receive, sort and open documents, and extract useful data from scanned digital images. Data Validation Data is checked or validated after it is scanned and entered into a database. Major DPO providers use advanced automated transaction processing (ATP) technology to automate manual and repeatable processes, especially when processing large volumes of information. Cloud-Based Storage and Access or Digital Vault With secure cloud-based document storage and retrieval, managers can tailor a customer’s access privileges and security. Documents can be editable or set to read-only with 24/7 availability via an internet connection. Providers can make documents accessible from any location for distribution or archiving, regardless of the location of the original document. Other services include secure records management from creation to scheduled disposal. Data Encryption DPO providers offer encryption and securitization of sensitive information and for meeting regulatory requirements such as the HIPAA (Health Insurance Portability and Accountability Act) and Financial Modernization Act. Customer Communications Management The DPO service provider can improve customer relationships, promote corporate branding, promote products, and communicate information to customers by creating and managing personalized communications. Presentation and delivery channels are tailored based on client preferences. Customer communications are generated in real time and can be produced in high-volumes through the use of automatic character recognition technologies. Output/Printing Output services include print and mail (creating forms, distributing invoices, financial statements and customer correspondence), design (creating, merging and distributing content to multiple channels), and electronic documents (creating and presenting documents digitally instead of printing paper documents). Help Desk Services Document-related inquiries from staff, vendors and customers can be handled by a third party. Help desk service personnel are trained and have in-depth understanding of business and customer needs, allowing them to serve as a seamless extension of the in-house staff. Disaster Recovery DPO providers have tested disaster recovery and business continuity plans in place in the event of force majeure or unforeseen circumstances. Services include dual-site processing and redundant storage. Workflow Engineering and Consultancy Document imaging specialists or advisors help organizations reduce errors, speed up processes and eliminate middle layers and needless steps in a document lifecycle. Document specialists also integrate their services with legacy systems, workflow automation software, and application processing software.
End-to-End Document Process Outsourcing Services
An organization has different document-intensive functions, including customer-facing, technical, marketing, legal/regulatory and finance and accounting. The DPO service provider takes over management of one or more document-intensive business processes while allowing the company to retain ownership and control. The third party provides technology and domain expertise to improve process efficiency and reduce costs. Enterprise Content Management (ECM) Services Major DPO providers like Xerox and HP offer cloud-based and on-premise document processing solutions to organize and manage data for large businesses. End-to-end management includes creation, processing, retention, and archiving, as well as automation of business critical processes. Customer-Facing Services Customer-facing processes focus on fulfillment of customer requests or orders. DPO providers handle production, distribution and management of documents like invoices, customer communications, and customer records. Technical Document Services Technical document processing is the production and management of technical documents delivered to customers or other businesses. A DPO provider may handle creation and distribution of repair manuals, product manuals, design specifications, blueprints, supplier documents, and service bulletins. Sales and Marketing Services Marketing services are typically external-facing and involves the production and management of marketing and communications documents. Service providers may manage an organization’s communications programs and handle customer collateral fulfillment. A third party may also optimize transactional-promotional communications by adding marketing messages to post-sales bills, statements and invoices. Legal and Regulatory Services Service providers handle production and management of documents that ensure regulatory compliance, typically in the insurance, product safety and banking and financial services sectors. Finance and Accounting F&A document processes include invoicing and payment of buyers and suppliers, and capture, scanning, reporting, updating, and archiving of financial information. A third party may handle specific functions like management of invoice matching and dispute resolution or general services like design, storage, and management of operational forms (electronic or paper-based). Administrative Services DPO service providers undertake end-to-end administrative document management, production and printing using the latest technologies.
Comparison: Document Process Outsourcing and Business Process Outsourcing
Document process outsourcing (DPO) is the practice of hiring a third party or outside expert to handle an organization’s document processing functions. The service provider employ data entry professionals and use advanced document processing tools to convert data from paper-based or electronic documents into machine-readable information. Besides providing individual services like scanning and printing, third parties also offer end-to-end document processing and consulting or advisory services. Document process outsourcing is a special area of business process outsourcing (BPO), which encompasses a wide range of services: front office (customer service), back office (finance and accounting, human resources), information technology (infrastructure, maintenance, support, software development), legal (patents, research), and knowledge processes (core activities). Differences Process Ownership According to the article Document Process Outsourcing vs. Business Process Outsourcing in 2013 & Beyond published on the blog, one of the main differences of DPO and BPO is how the organization retains ownership of the process. DPO allows a company to take full ownership of the process and retain responsibility for outcomes, while taking advantage of technology that improves the function. For example, third platform technologies (like the cloud) have enabled business of all sizes to leverage advanced document processing tools that streamline workflows and improve efficiency. With cloud-based document processing services, what used to be accessible only to enterprises or large companies can now be easily accessed by small and medium-sized businesses (SMBs) with limited resources. The cloud-based DPO service delivery model in particular enables business to improve process efficiency without turning over responsibility for the entire process to the third party. Other benefits of the DPO model over traditional BPO service delivery models are reduced cost (small investment in infrastructure and labor) and shared risk (the third party also assumes responsibility when things go wrong). Level of Engagement In its study Document Process Outsourcing: Business Strategies for Successful Market Engagement, InfoTrends reported that traditional BPO contracts differ from DPO agreements in terms of the level of engagement. While traditional BPO models focus on the delivery of discrete or individual services, DPO focuses on a specific business process and their associated metrics. For example, a DPO provider handles end-to-end management of document-intensive processes in an organization’s Finance and Accounting department, including processing of accounts payable, insurance claims, sales order, and mortgage applications. As a subset of BPO, DPO is tied directly to a provider’s document processing expertise. The outsourced process (Finance and Accounting is an example) includes management of multiple document lifecycles and delivery of documents to end-users. DPO and BPO Trends According to an InfoTrends study, cost reduction remains the primary driver for BPO market growth, but it is not the only driver. Today, companies outsource strategically; that is, to improve business processes and drive innovation. The number of companies using metrics that go beyond cost savings is increasingly growing, indicative of the move towards market-facing outsourcing solutions. Modern BPO is all about long-term value, and companies that outsource document processing are following that trend. Like other BPO providers, DPO providers are expanding their offerings to include end-to-end process management. Another trend that informs BPO is third platform technologies that include big data, mobility, social business, and cloud-based services. The cloud in particular is changing the way companies process documents. Service providers are wooing buyers with cloud solutions that will transform businesses into paperless organizations. DPO provider CloudX said that BPO is headed towards an integration of technology and process outsourcing. Buyers will be able to improve document-intensive processes while retaining control through advanced workflow automation, intelligent character recognition, flexible solutions, business intelligence, and advanced document management technology that providers offer. CloudX added that the DPO approach is best used for functions like accounts payable invoice processing, explanation of benefits (EOB) processing, sales order processing, and human resource onboarding. POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year
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<![CDATA[ Outsourced Document Processing: Top 10 Things to Learn ]]> Sourcefit Philippines BPO Blog:  Outsourced Document Processing: Top 10 Things to LearnOutsourced Document Processing is the transfer of responsibility for an organization’s document-intensive functions to a third party or specialist. Document processing is the conversion of paper-based or electronic documents containing handwritten, typed or scanned text and images into a digital format. The digitized images and captured data are typically uploaded into an Electronic Document Management System (EDMS). The provider may utilize the services of experienced data entry professionals and various document processing tools for conversion, such as Intelligent Character Recognition (ICR) and Optical Character Recognition (OCR). Document-intensive functions are at the heart of most business processes, from procurement to accounting to corporate strategy. Common document processing services that are outsourced include document preparation, document scanning, document indexing and linking, data capture, data encryption, records conversion and retention, records management, document process or workflow engineering, help desk, disaster recovery, integration with legacy systems, and cloud-based secure document access. An InfoTrends study reported that companies outsource document processing mainly to reduce cost, improve process efficiency, drive innovation, and add value. Service providers have the technology, domain expertise, and deep understanding of customer needs to provide a high level of efficiency at a lower cost.
1. Market Size and Forecast
According to the Global Document Outsourcing Market 2014-2018 study by TechNavio covering the Americas, APAC, and EMEA regions, the global document outsourcing market will grow at a compound annual growth rate (CAGR) of 5.25 percent from 2013 to 2018. The increasing number of companies looking for end-to-end document process outsourcing is driving growth. However, TechNavio reported that while offerings from service providers are expanding, lack of flexibility with service level agreements (SLAs) may challenge the growth.
2. Evolution of Outsource Document Processing Industry
Sourcefit Philippines BPO Blog:  Outsourced Document Processing- Evolution of  Outsource Document Processing Industry
Canon Group and InfoTrends charted the history of outsourced document processing in its 2011 white paper The Evolution of Document Process Outsourcing. In the early 1990s when BPO contracts were in its infancy, document outsourcing providers saw opportunities to offer document-intensive services as standalone agreements or in collaboration with major BPO providers. InfoTrends predicted that the United States document outsourcing market will reach almost $1 billion in value by 2014. Meanwhile, Western Europe’s document outsourcing market was expected to reach €2.7 billion in 2014. Today, outsourced document processing continues to grow, driven by demand from companies looking for end-to-end document processing solutions. DPO is increasingly seen as more than just a cost-reduction tool, but a strategic solution that improves business process efficiency and drives value. DPO continues to evolve within the segment, with a growing number of service providers expanding their offerings beyond traditional document processing services. From traditional document processing where individual services or tasks like scanning and printing are undertaken by a third party, DPO service providers today perform all steps within the outsourced process (end-to-end DPO). InfoTrends now defines DPO as the outsourcing of a document-intensive process with multiple tasks to support a single business function. For example, an organization hires a DPO provider to handle end-to-end document processing for its entire Finance and Accounting (F&A) division. According on InfoTrends, a document process has a specific input and output, and the process consists of a well-defined sequence of activities and a well-defined output recipient. The specific business process can also be named. For example, the input is sales leads, and the output is physical and electronic promotional materials. The activities may include web and graphic design, data management, distribution, and tracking. The recipient in this case is the client, and the business process is new customer acquisition.
3. Mergers and Third Platform Impact
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - Mergers & Third Platform
Industry mergers and the so-called “3rd platform” (four key technologies that include mobility, big data, social business and cloud) are driving transformations in all BPO segments, including DPO. A few years ago, major BPO providers like Accenture and IBM partnered with DPO specialists to provide standalone services. Today, BPO and DPO services are becoming closely integrated due to customer demand for comprehensive services. Bundled services allow companies to reduce the cost of managing multiple vendors, better utilize vendor resources like multi-location outsourcing, and build closer, more collaborative relationships. This in turn leads to better value and greater innovation. DPO providers are leveraging cloud services, social media, mobile devices and big data to help companies become fully digital, market-facing businesses.
4. Outsourced Document Processing Trends
Outsourced document processing in the 21st century is more than just a cost reduction activity. InfoTrends reports that companies are increasingly turning to DPO to drive innovation and process improvement. According to a study conducted by Forbes Insights and Infosys, more companies are using metrics that evaluate more than just than bottom line savings. While it is true that cost reduction remains a number one concern, companies are also looking for other ways to improve workflows and drive long-term value. Value-added benefits like higher productivity, improved customer service and new revenue streams are some examples of what companies are looking for when they partner with third party DPO specialists. In turn, DPO providers are expanding their offerings to meet demand. For example, DPO vendor Océ Business Services helped a rental car company cut costs and improve efficiencies by handling the reorganization and management of the client’s internal document process. Océ took over end-to-end document processing, from document origination to digital conversion of vehicle contracts and maintenance records. Océ also handled document scanning and process management and control. As a result of outsourcing document processing to Océ, the client saved $700,000 annually on rental contract imaging and indexing and reduced their turnaround time by 12-24 hours.
5. Intelligent Character Recognition (ICR)
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - Intelligent Character Recognition
Intelligent Character Recognition (ICR) refers to technologies that recognize and analyze handwritten characters from scanned images. It is a more specific type of optical character recognition (OCR) that is ideal for digitizing documents containing different styles of handwriting. In document processing, ICR software is used to identify any character contained in a digitized image. The ICR software returns this information in a way that is recognizable to the machine and end user. Process The document is scanned and saved as a high-resolution digital image (usually TIFF) and fed to the computer. The ICR software analyzes the image and translates the data into machine-readable characters. Modern ICR software consists of a neural network (self-learning) system that automatically updates the recognition database. In this sense, the software’s level of intelligence can be programmed. Accuracy levels vary when digitizing hand-printed text with ICR software. To achieve high recognition rates and accuracy, multiple engines are often used. According to Top Image Systems’ Principles of Character Recognition, ICR software may use semantic, statistical, or hybrid character recognition. Statistical The statistical approach involves looking for spatial distribution patterns of pixel values in a scanned image of a handwritten character or digit. For example, looking at the handwritten digit “1” and “8,” the ICR software would identify the ratio of black pixels to white pixels in each image (as represented by histograms of the two digits) and differentiate between them. Semantic Scanned images of handwritten characters form lines, contours, and spaces. The semantic approach to character recognition identifies the contours and lines formed by pixels of scanned images and looks for patterns or relationships for each character. For example, there are various but not unlimited ways to write the letter “a.” All the possible depictions can be compiled in a database and used by the software for analysis and comparison. However, the semantic approach may fail to recognize a character when the scanned image of the character is broken and the contour cannot be traced properly. Hybrid Hybrid intelligent character recognition is a combination of statistic and semantic approaches, designed to overcome the limitations of each method. Character recognition engines perform best with a specific image or document; ICR software can thus incorporate all of these engines to create the best possible result. When digitizing handwritten numbers for example, ICR engines designed to read numbers have higher “voting” rights. When digitizing handwritten text, ICR engines designed to read letters take preference.
6. ICR in Forms Processing
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - ICR in Forms Processing
Form processing used to be performed by data entry workers who read the documents and manually keyed in data into a computer. Automated Forms Processing was born in 1993 and involved a three-step process: capturing the image of the original document and preparing the image for ICR, capturing the information, and processing the results for automatic validation. Today, companies use scanners and ICR/OCR form processing software to automate this process and achieve about 98 percent accuracy, similar to the accuracy achieved during manual data entry. Forms processing software often uses a combination of ICR, optical character recognition (OCR), and optical mark recognition (OMR) systems to digitize handwritten text, machine-printed type, marks on check boxes, bar codes, and signatures from scanned images. ICR technology automates data entry functions when digitizing hand-filled forms, surveys and applications. The software interface may include scanning, recognition, verification, and management tools for processing large volumes of data. Organizations that collect data on paper-based forms may use forms processing software to automate data entry. Data entry professionals may then validate and proofread the data to improve accuracy. Data entry automation with ICR software is recommended for companies that handle 100 or more forms per month.
7. Optical Character Recognition (OCR)
Optical character recognition (OCR) is the process of converting scanned text images into a form that machines can easily recognize, edit, search, store and display. Optical character recognition systems are commonly used in document processing to transform data from paper and digital records into machine-encoded text. Besides reducing their paper trail, businesses use OCR to reduce data entry errors, consolidate data entry, create human readable text, and encode large volumes of data. The OCR input (original document) can come from several sources, including handwritten text (prescriptions, snail mail correspondence), printed material (passport, invoices, business cards), and scanned images with printed text and handwriting. The output is stored and delivered in a specific file format, such as PDF. The PDF file can be further optimized for the web to ensure fast download and access. History The Internet has changed the way users access printed material and library resources. Many prefer documents in electronic format that can be easily accessed with an internet connection. Digitized text is also easier to use in document processing activities like text-to-speech, data and text mining, and machine translation. For businesses that have massive legacies of paper records, optical character recognition was a strategy towards a better organized, paperless office. In its infancy, OCR involved the use of high-speed scanners and advanced OCR software that automatically converted thousands of pages into user-friendly electronic text. According to the article Optical Character Recognition published by MacUser magazine in August 2012, companies in the late 1980s that had invested in expensive scanning equipment and OCR achieved only 98 percent accuracy, meaning that there were 10 or more errors on an average page. Today, many OCR software makers claim 99 percent accuracy, but only when used on good-quality, clean images like Microsoft Word documents and not on historical newspapers and material.
8. OCR Process
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - OCR Process
Digitizing printed matter typically begins with the scanning of original documents. The data is then saved as various digital formats and made accessible online. Data entry professionals and archivists work with two types of print documents (text-based and graphic based) and use different techniques to digitize them. Graphic-Based Materials Graphic-based printed materials include drawings, manuscripts, slides, posters, historical photos and documents with illustrations or images. Many old and historical documents (newspapers, magazines, books) are considered graphic-based because they often have unusual fonts, stains, and colored backgrounds. The documents are scanned in color at very high resolution to create reproductions that are as faithful to the original as possible. The reproductions are then saved in image formats that suit the method of presentation. For example, archival images may be saved as TIFF (Tagged Image File Format) master files and converted into JPEG (Joint Photographic Experts Group) access files for online viewing. Text-Based Materials Text-based materials include journal articles, reports, meeting minutes, dissertations, research papers, and modern books, magazines, and newspapers. Text-based materials are scanned and converted into machine-encoded text.
9. Optical Character Recognition Software
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - Optical Character Recognition Software
OCR software works with a bitmapped image of the document to separate each character or glyph. The software analyzes each glyph and matches it to one that is in the character set of a recognition language. After the blocks of characters are separated into words, each word is checked against a dictionary. The word that fits best is the output. When there is no good word-character match to be found, the software returns recognized characters and marks. Modern OCR engines use multiple algorithms and average the result to obtain a single reading. Unlike humans, however, OCR software has yet to assemble words into the context of sentences or paragraphs, which increase the chances of errors. Recognition performance is also affected by the quality of the scanned image and the type of software used. OCR works best with high-quality, black and white images without blurs or smudges and with a dedicated software package. To further increase accuracy, human proofreading is a must. OCR Core Algorithms To recognize characters, OCR uses two basic algorithms: matrix matching and feature extraction. Matrix matching involves comparing what the OCR scanner “sees” as a character to a library of character templates. When a match is found, the software names the image with a corresponding ASCII character. Matrix matching is recommended for documents with a limited set of type styles and with little or no variation within each style. Feature extraction (also called intelligent character recognition or topological feature analysis) is a more advanced process. The software looks for features like closed shapes, stroke edge, the background color, diagonal lines, open areas, etc. and compares these features with an abstract representation of that character. Feature extraction works best when the characters are less predictable.
10. Data Entry
Sourcefit Philippines BPO Blog:  Outsourced Document Processing - Data Entry
Data entry is the process of entering text, numbers or facts into an electronic spreadsheet or database. Data can be keyed in manually into a computer by an individual (manual data entry) or by a machine entering data electronically (automated data entry). Data entry belongs under the broader umbrella of data processing or information processing. Data processing is the gathering and manipulation of data, while information processing refers to stages or changes that information undergoes. Data processing functions include capture, entry, validation, sorting, summarization, aggregation, analysis, reporting, and classification. In business, the term data entry is often used in the context of forms processing and commercial data processing. History Humans have been processing data for centuries. The history of electronic data entry can be traced back to the 1700s when punched cards were first used to control machinery and record and process data. From the 1900s to the 1950s, most organizations used punched cards for data entry, storage and processing, thus increasing demand for workers to run keypunch machines. In the 1970s, typewriters and keypunch machines were gradually replaced by computers with video display terminals or screens that allowed the typist to see the data before it was printed. Today, data entry is performed by data entry clerks or typists with the help of computers, scanners and forms processing software. Data usually comes from paper documents or scanned images, which are transferred into the database using a keyboard, recorder or scanner. Modern organizations accumulate vast amounts of data, including operational/transactional data (cost, sales, payroll), non-operational data (forecast, industry figures) and meta data (information about the data). Manual Data Entry Manual data entry is performed by humans entering data from a paper document or scanned image into a physical database (such as a record/tally sheet) or into an electronic database. According to Teresia R. Ostrach’s Typing Speed: How Fast is Average?, the average typing speed of data entry professionals is between 50 to 80 words per minute, which is relatively sluggish compared to the speed of automated scanning equipment. Other issues with manual data entry are the high labor and overhead costs associated with employing data entry professionals and the possibility of typographical errors. Automated Data Entry Automated data entry is performed by human operators but with much of the work done by machines or computers. Computers feature customizable interfaces, built-in templates that map the document, and different character recognition software that analyze scanned images of paper documents. Optical character recognition (OCR) is used to read machine printed characters, while intelligent character recognition is used for handwritten characters. Check boxes, bar codes and magnetic ink are read using optical mark recognition (OMR), bar code recognition (BCR) and magnetic ink character recognition (MICR) software, respectively. Data Entry Professionals A data entry professional records, updates, maintains, and retrieves data held in computer systems. Data entry workers may use special keyboards to speed up the work and reduce the risk of repetitive strain injury. Companies typically require data entry workers to be proficient in touch typing and have basic knowledge of databases, word processing software, and spreadsheets. The job description vary depending on the industry, but the general nature of work requires little or no technical knowledge. Organizations may choose to hire data entry professionals in-house or outsource data entry to a third party. Data entry tasks can be integrated with customer service tasks. These include entering customer information into a database during new account openings, lead generation, and new customer acquisition. A data entry/customer service professional may also be assigned to update electronic medical records, process invoices and confirm or verify client records through phone, SMS, chat or email. POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year
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<![CDATA[ Definitive Guide to Technical Support Outsourcing & Offshore IT Services ]]> Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services Technical support or tech support refers to services that assist users of electronic services or mechanical products. Products include mobile phones, tablets, laptops, desktop computers, software, hardware, IT infrastructure, and cloud-based services. The goal of technical support is to resolve issues related to a specific product or service. Companies provide free or paid technical support for the products they sell. Support can be given in person by support staff in a brick and mortar store, over the phone, and online via chat, email, forum comments or incident reporting. Many enterprises also have in-house IT departments that provide troubleshooting and support for their own employees. Some small and medium-sized businesses (SMBs) may outsource technical support for their employees to reduce costs and gain strategic benefits.
Technical Support Outsourcing
Technical support outsourcing is the practice of hiring a third party or outside expert to handle an organization’s tech support functions. Tech support outsourcing is typically included in a company’s IT outsourcing budget and IT outsourcing campaign. According to a study by market research firm Parks Associates, the technical support market for SMBs in the United States will grow 14.4 percent (compound annual growth rate) from 2012 to 2016 and reach $25 billion by 2016. Market growth will be driven by increasingly complex networks and trends like cloud services and bring your own device (BYOD). As companies rely more and more on 24/7 uptime, major outsourced tech support providers are introducing new and robust forms of technical support that targets small businesses. Providers will leverage their existing relationship with SMBs to deliver these new products. Similarly, large enterprises are under pressure to keep pace with technology and reduce massive expenses associated with business disruption due to unexpected downtime. Enterprise tech support providers are expanding and improving their offerings to meet these needs.
Technical Support Coverage
Technical support professionals are also called technicians, tech support officers, help desk operators, maintenance engineers, and applications support specialists. Tech support specialists have in-depth understanding of technology products and information systems, and they apply their technical knowledge to resolve hardware, software, network, or systems issues. Tech support professionals help customers through various channels: direct questions and basic issues can be answered through telephone, SMS, or online, while face-to-face interaction may be reserved for complicated hardware or software problems. The quality of technical support that a customer receives usually depends on whether the service is paid or free. Most companies offer free technical support to customers through various channels, but only a few provide dedicated, one-on-one support. Premium technical support services are typically available as a subscription or pay-as-you-go model. The pay-as-you need model is a one-time charge for resolving issues in a one-off manner. Monthly or annual subscriptions can be customized to expand or reduce the amount of support the customer receives. This is ideal for companies requiring routine maintenance and support.
Technical Support Responsibilities
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services - Responsibilities
Responsibilities of technical support professionals vary. In general, an organization’s internal tech support staff is mainly responsible for the smooth operation of computer systems, ensuring that employees get maximum benefits from them. Individual tasks may also include: • Installation, configuration and diagnostics of hardware, software and applications • Customer support and issue resolution through telephone, online or face-to-face interaction • Network and systems monitoring • Network and systems maintenance • Troubleshooting systems and network problems • Parts replacement • Safety checks on computer equipment • Procedure documentation and reporting • New account and password setup • Timely call-out response • Testing and evaluation of new applications • Knowledge and supporting of new applications and technology initiatives • Virus and malware support • Data recovery • Customization
Technical Support Tiers or Levels
Technical support can be classified into four levels or tiers. Businesses may use more than one level of support depending on their internal and customer needs. A multi-level support system is designed to address problems in the most efficient way possible. Tier 0 refers to scripted answers to non-technical problems (like status of an order, incident reports) and short-duration client interactions. Tier 1 support includes scripted answers to known issues with well-defined client interaction durations. Tier 2 refers to free-form or unscripted problem analysis, resolution or escalation to tier 3. Tier 3 covers engineering, bug fixes, key releases, and new features or enhancements.
Call Out IT Support Service Agreement
Call out or maintenance technical support is a type of IT service contract where the services rendered and payment are pre-negotiated. The customer “calls out” the technician or service provider to address a technical issue. The customer pays for the services of the technician as well as the materials used based on an agreed-upon rate. Call out differs from a fixed price service arrangement, where the customer pays the technician a fixed amount regardless of number or hours worked and materials used. The terms of the call out contract are usually for a fixed duration, typically 12 months, with a minimum fee to be paid by the customer on a monthly basis. The call out terms can be 24/7 support or for certain hours in a day for 12 months, and the rate applied is based on a previously agreed schedule. For example, company ABC hires a technical support professional to install a network in their office. The technician may charge the company for time (the number of hours it takes to install the network) and materials (the cost of direct materials like cables, hard drive, software, etc. plus any markup).
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services - Benefits
Call out is similar to a time and materials service contract in other industries, particularly construction. “Time and materials” refers to payment for the number of hours of work performed by the technician, direct expenses incurred, and necessary materials purchased during the project. Call our or time and material contracts are often used when the full scope of the project is not well defined or understood. Most consulting contracts begin as call out, with the technician being paid by the customer for hours of work and direct expenses. Once the project scope is defined and the duration is determined, the technician may bill the customer using milestone payments or fixed-price billing.
Block Hours Tech Support Service Contact
Block hours technical support is a type of service contract that allows a customer to buy a block of time of support services for a fixed price. Block hours are usually prepaid or paid in advance. Instead of charging by the hour for a technician’s services, block hours are offered at a reduced rate per hour. However, block hours are sometimes offered at a standard rate. This type of technical support arrangement gives customers the flexibility to use the hours when they need it and whenever problems arise, while avoiding the trouble of having to pay multiple bills. Block hours are ideal for businesses or individuals that require regular and routine tech support, but cannot or are unwilling to pay for managed services or ongoing subscriptions. Most providers offer block hours that can be used for any and all of the services provided by the company. For example, IBM offers prepaid block hours for premium software support that allows customers to access the company’s software expertise. Support services are delivered on an hourly basis over a 12-month period and covers general technical consulting, operations support, developer support, emergency support, and other services. Other providers also allow customers to access reports that itemize services performed and the remaining balance of block hours.
Block hours tech support is a simple and flexible way to access comprehensive professional IT services, from routine maintenance of servers, network, and workstations to premium consultancy services. Block hours support is relatively more affordable, allowing individuals and businesses to easily get started with a company’s professional tech support services and access value-added services like project management and consultancy. Block hours can be used anytime within the terms of the contract, allowing customers to manage and control IT budgets. There is no need to pay upfront for on-demand support whenever you encounter IT issues. Some companies allow customers to top-up their existing block hours balance.
Managed Services Tech Support
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services - Managed Services
Managed services tech support is a type of service agreement where the customer pays for management of day-to-day IT support for a fixed or variable fee. The suite of services and resolution times are well-defined and may be provided proactively or when necessary as determined by the managed services provider (MSP). MSPs often use remote monitoring and management (RMM) software to deploy and control managed IT support services. Besides providing IT support services, managed services providers may be hired to manage multiple IT support vendors and evaluate their performance according to the client’s requirements. In this type of service agreement, the MSP acts as a neutral party that offers comprehensive and best in class IT support solutions at a reduced cost. The MSP uses a vendor management system (VMS) to manage the contingent IT support workforce. The managed services provider usually charges an upfront fee for setup and then a fixed or variable monthly fee on an ongoing basis. This gives the client predictability when budgeting for IT support costs and allows them to pay only for what services and materials they use. In general, the customer retains overall control and responsibility over the managed services. A comprehensive suite of managed IT support services may include IT management, setup, helpdesk support and maintenance, onsite support, project management, IT advice and consulting, cloud services, application services, reporting, short-term/contingency staffing, and IT roadmap.
Managed IT support is a way to reduce cost and complexity by transferring the IT management burden to a third party and to free up resources for core activities and business growth. Managed services are designed to provide a single point of accountability and simplified structure for hardware, software, infrastructure, and IT workforce support. Managed services also help improve reliability and efficiency and reduce downtime through proactive monitoring. Instead of being responsible for troubleshooting and coordination in a multi-vendor environment with different service levels, the company transfers responsibility to the managed services provider.
Crowdsourced Technical Support
Crowdsourced IT support is a type of support provided by or sourced from a group of people, usually online and through discussion boards, website forums, and online communities. Crowdsourced tech support is typically free, but some companies may charge for premium tech support services. Many companies have some form of crowdsourced support for their products and services. It allows them to reduce support costs and shift work away from IT professionals or store help desk representatives to online experts who typically offer their services and expertise for free. For example, Microsoft and Apple have online discussion communities where anyone can register and become a member. Members can then sound off on various topics, ask for help, and provide troubleshooting support for tech issues. Many online discussion boards also have extensive knowledge databases, often compiled by the in-house technicians, that free to access for members. Tech support knowledge databases usually provide responses to routine questions. The paid crowdsourced tech support model is on the rise. Vodafone Germany’s peer-to-peer tech support model charges its users an hourly rate for face-to-face or online tech support provided by its crowdsourced IT support team. The technicians are not all IT professionals (many are in their teens or 20s) or formally trained by Vodafone; instead, they are invited and chosen based on their tech support skills. Companies that choose to crowdsource a part of their tech support services realize that the long-term investment in the platform costs less than hiring full-time IT support technicians. While there are costs associated with content moderation and customer feedback monitoring, the overall expense is significantly less than traditional tech support.
Customers today feel that they have a say in how a company does business with them. In an age where end users expect not only high-quality tech support but acknowledgment and personalized service, the most successful businesses are those that use technology to adapt to their clients. For customers with an internet connection, crowdsourced tech support is a fast and easy way to troubleshoot problems with mobile devices, computers, software, hardware, and consumer electronics.
Outsourcing Technical Support
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services -- Outsourcing Technical Support
Technical support outsourcing is the transfer of responsibility for an organization’s internal IT support to an outside expert or service provider. Technical support can be outsourced to a provider within the state or country (local), in a neighboring area (nearshore), or in a far-flung location (offshore). The third party handles an entire business function and provides process expertise, technology, operations and support. Depending on the service agreement or contract, the customer may or may not give up control over management and operations. Most companies outsource their IT support functions to reduce cost, reduce complexity, and keep pace with advances in technology. Companies also see IT support outsourcing as a strategic tool that can improve focus and productivity, streamline processes, grow the bottom line and help them stay competitive in an increasingly global market. Tech support outsourcing began as a solution to organizational complexities introduced by globalization and free trade economies. Outsourcing IT support and maintenance functions to third parties was seen as the best way to reduce overall costs and access domain expertise. Due to the non-tangible nature of IT services (making it unnecessary for the goods to services to be produced at the site of consumption), IT outsourcing will always be an attractive business model.
Tech Support Outsourcing Market and Trends
The global technical support outsourcing market is expected to grow at 5.92 percent CAGR from 2014 to 2018, according to a recent study by TechNavio. Most companies outsource tech support services because outsourcing reduces risk and is more affordable. The report showed that market growth is mainly driven by reduction in total cost of ownership associated with adopting innovative models from service providers. A key market trend is changing consumer preferences, forcing companies to innovate and offer new and improved support services. The rise in available service delivery options also mean new system integration and hardware/software troubleshooting processes. According to the report, one of the biggest challenges for the tech support outsourcing market is data security. Providers and customers struggle with lack of control over security and the risk of privacy loss and misuse of confidential information. In the United States, market research firm Parks and Associates predicted that the technical support market for small and medium sized businesses will grow at a 14.4 percent CAGR from 2012 to 2016 and reach $25 billion by 2016. Primary drivers of market growth are network complexity and trends like cloud services and bring your own device (BYOD). Large enterprises are also under pressure to reduce expenses associated with business disruption due to unexpected downtime.
Tech Support Outsourcing Benefits
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services – Outsourcing Benefits
Providing high-quality in-house technical support is expensive, with massive investment required in labor, overhead, and maintenance. As new devices, consumer electronics, and applications are released, the cost of IT support grows even higher. Companies that outsource IT support save money and realize other value-added benefits. Cost reduction through tech support outsourcing is achieved by transferring the cost burden associated with recruitment, training, infrastructure, and systems maintenance to the third party. Offshore IT support outsourcing allows companies to realize even greater cost savings due to labor arbitrage. Scalability is the ability of an organization’s systems and infrastructure to keep pace with market and customer needs. Outsourcing tech support to a third party allows companies to scale up or down easily and do so without significant upfront investment. The service provider can handle both IT workforce management as well as IT support to simplify operations. Managed services providers (MSP) can control hiring of regular and contingency staff during periods of rapid or slow growth. IT support providers deliver additional value to customers by increasing company focus. Outsourcing tech support frees up limited resources (human capital, infrastructure, funds) for use on core business activities and business growth.
IT Support Levels or Tiers
Technical support can be classified into levels or tiers that characterize the complexity of support given. Businesses may utilize more than one level of support depending on their internal and customer needs. Some companies have as many as five to six levels of support, while others have three or fewer. A multi-level support system is designed to address problems in the most efficient way possible, with basic queries assigned to lower tiers and advanced and complex issues escalated to the highest tier.
Tier 0 or Online Knowledge Base/Self-Service
The lowest level of support, Tier 0, is the gateway to a provider’s IT support services. Tier 0 typically refers to general information, FAQs, and responses to non-technical queries. The script and responses are compiled in an online knowledge base that both customers and technicians can easily access. The duration of client interaction is usually short. Customers can access knowledge base articles, order a service, check the status of an order, check the status of a support ticket, and view notifications. Technicians can access dashboards, analytics reports, build new services, and send notifications. Customers and technicians can also customize the Tier 0 site.
Tier 1/Level 1 or Front Line Service Desk
Tier 1 is the first line of technical support. Tier 1 technicians possess general knowledge about the product or service, but may not have in-depth understanding of the system. Tier 1 technicians usually refer to a knowledge base and basic workflows during customer interaction. Most companies provide Tier 1 support round the clock or 24/7, with many firms outsourcing basic support offshore to reduce cost. Tier 1 technicians are expected to resolve majority of user issues before escalating to higher support levels. When an issue arises, customers have the option to access Tier 1 technical support through various channels: telephone, chat, SMS, email, discussion board, social media or face-to-face contact. The Tier 1 technician would gather customer information, identify the problem, and use a scripted workflow to attempt to resolve the issue. If the issue cannot be resolved during the interaction, the Tier 1 technician may categorize the problem, issue a support ticket, and escalate the issue to the appropriate support level.
Tier 2 or Level 2 Technical Support
 Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services -- Level 2 or Tier 2
Tier 2 or Level 2 support refers to a higher level of support characterized by free-form or unscripted problem analysis, resolution and escalation. Tier 2 specialists are more experienced (three or more years of experience) than Tier 1 specialists and have advanced certifications or pursue additional training. Tier 2 specialist responsibilities typically include installation, diagnostic testing, parts replacements, software repair, diagnostic testing, and remote control. Because of the greater support complexity and experience required, Tier 2 support costs more. Some companies may provide free Tier 1 support and charge for premium Tier 2 support (in-house or outsourced) for their products. Tier 2 technicians have a deeper understanding of software, hardware, systems and workflows than Tier 1 specialists. Tier 2 technicians handle a variety of technical issues regularly, making them better equipped to resolve complex issues and provide in-depth troubleshooting. Based on information gathered by the Tier 1 specialist, the Tier 2 technician will analyze the problem, determine if it belongs under L2 domain, and categorize the issue as new or existing. The technician then performs advanced diagnostics and data analysis. For existing issues, the Tier 2 technician looks for a solution or workaround in the database and gives it to the customer. If no solution can be found (as in the case of open bugs), the technician may record the issue in the bug list. Depending on the number of incidents reported, the technician may ask the developers to fix the bug immediately. For new issues, the Tier 2 technician will perform further analysis using diagnostic tools to determine if the problem can be resolved immediately. The solution is then offered to the customer. If there is no workaround for the new issue after exhausting all Tier 2 resources, the technician may escalate the problem to Tier 3 support, where the developer directly responsible for the product or service can resolve it. Escalation to Tier 3 may also be done if the Tier 2 technician is unable to resolve the issue due to limited access.
Tier 3 or Level 3 IT Support
Tier 3 or Level 3 support is the highest support level in a three-tier technical support model. Tier 3 support covers bug fixes, releases, new features and enhancements, and engineering. Tier 3 technicians (also called high-end support or back-end support) are typically senior engineers or product developer with 10 or more years of experience. They hold many advanced certifications and accreditations. Their realm of expertise is specialized and they may serve as subject matter experts (SMEs) for a particular product or IT department. When new, unknown or complicated issues arise, it is usually the Tier 3 specialist who is consulted and asked to troubleshoot. Tier 3 specialists also assist Tier 1 and Tier 2 technicians and perform research and development for solutions to unknown issues. Like Tier 2 support, Tier 3 specialists review workflows and analyze the duration of client interactions to prioritize tasks and better manage time. Sometimes, issues are escalated to Tier 3 support because lower level support failed to discover an existing workaround. In this case, the Tier 3 technician will work to resolve the problem immediately. For new or unknown issues, the Tier 3 technician may resolve the problem immediately or ask for more time, in which case the customer is contacted and informed. In extreme cases where the product or service cannot be repaired or must be replaced, the issue is sent to the original developers for in-depth analysis. If the problem can be solved, the expert-level technicians are responsible for developing and testing several solutions, and implementing the most successful one. Once the solution is verified, it is delivered to the customer and included in the database. For example, Microsoft Windows developers receive support tickets from tech support staff located all over the world. Sometimes, the problem requires deeper analysis of the operating system, and the solution is rolled out as a Windows OS update.
Tier 4 or Level 4 IT Troubleshooting and Support
Sourcefit Philippines BPO Blog:  Definitive Guide to Technical Support Outsourcing & Offshore IT Services -- Tier 4 or Level 4
Tier 4 or Level 4 technical support refers to IT support performed outside the organization. Tier 4 tech support is less common than the three-tier support model. Delivery is usually business to business (enterprise support) instead of business to consumer. Companies that utilize Tier 4 support may work with multiple vendors involved in creating a product or service. The Tier 4 specialist is usually a hardware or software engineer employed by an IT vendor. Like Tier 3 specialists, Tier 4 engineers have several years of experience with technical support and in-depth knowledge of database systems architecture, hardware/software, networks and cloud-based technology. They also hold many advanced industry certifications. Many companies require their Tier 4 engineers to be proficient in development languages like Java, C++, Ruby, and others. Tier 4 engineers fulfill many roles besides technical support, but their main focus is troubleshooting complex or difficult issues across multiple platforms. They are responsible for developing high-level tools that analyze crash reports and logs, streamlining analytics processes, and reducing tech support time. They examine crash dump reports, log files, and network traces for root-cause analysis and resolution. They also develop documentation and provide support to the IT and engineering departments. Tier 4 engineers may work in a lab environment with similar T4 professionals assigned to an IT product or service. In the lab, the engineers reproduce issues, isolate problems, and understand how customers use the product or device, focusing on patterns and providing feedback on areas that can be improved. An example of Tier 4 support is between a mobile app developer (company A) and a mobile OS vendor (company B). Company B employs a team of Tier 4 engineers that analyze logs and troubleshoot problems with mobile operating systems (OS). When company A (mobile app developer) encounters problems with the OS designed by company B, company A escalates a support request to company B. The Tier 4 engineers will handle analysis, development, testing, implementation, and resolution. POPULAR POSTS Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year
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<![CDATA[ Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services ]]> Sourcefit Philippines Outsourcing Blog:  Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Banks and financial institutions have outsourced non-core activities like payroll and customer support for years. Even before the year 2000, 39 percent of U.S. banks outsourced at least some processing or transactional service. Recently, however, banks have included higher-value functions like internal audits, budgets, financial planning, and investment management in their outsourcing campaigns. Worldwide, banks and lending companies are increasingly working with third parties locally and offshore to reduce costs, improve process efficiency, re-engineer core business activities, and achieve strategic goals. The pressure to remain competitive in a global market is higher than ever, and offshoring is seen as a powerful tool to expand and grow while keeping costs at a minimum. Initially, banks were wary of farming out regulated activities because offshoring transfers management and risk. Today, clearer regulations, sophisticated service delivery models, and improved risk management frameworks are encouraging banks to outsource both regulated and unregulated functions in increasingly complex outsourcing arrangements. The impact of banking BPO offshoring extends to multiple areas of business, from traditional back office processing to contract services to information technology. Outsourcing contracts or arrangements differ in various ways. There are contractor relationships that are relatively short-term and ideal for commodity services like customer acquisition and mortgage servicing. There are also fully-integrated, long-term partnerships or joint ventures where both the financial institution and service provider share risk and revenues. These arrangements typically support large and complex information technology initiatives. Banks may assign certain functions to a specialized industry provider locally, and let unrelated service providers perform other tasks.
Market Size
According to a 2013 study by consultancy firm HfS, the banking and finance services BPO industry will grow at a rate of about 5 percent every year until 2016, with global spending on finance and accounting (BPO) services expecting to grow at a rate of 8 percent until 2017. The market size is expected to reach $200 billion in 2016 based on a 5.2 percent compound annual growth rate (CAGR). NelsonHall forecasts that North America will remain the biggest market for banking BPO services in the next five years, in spite of having the lowest growth rate among major markets. Capital markets BPO (trade processing) will be the fastest growing vertical, followed by portfolio services and retail banking BPO.
Banking BPO Services
Banking and financial services BPO is the largest and most mature sector of the Banking, Financial Services and Insurance (BFSI) BPO industry. The other two industry segments are investments/capital markets and insurance. Due to its large market size, banking and financial services BPO has always been ahead of other industries in terms of adopting BPO and offshoring. Retail Banking and Commercial Finance Services Retail banking BPO services support individual consumers (B2C) while commercial BPO services support merchants and other businesses (B2B). Banking and finance services cover origination, customer acquisition, account servicing, collections, customer care, consumer lending, mortgages, brokerage, verification and processing, underwriting, research, monitoring, and analytics. Service providers improve process efficiency and cost competitiveness through standardization, automation, and end-to-end service delivery models. Investment Management and Capital Markets Capital markets BPO services support the management of wealth or assets. Service providers offer management of securities, derivatives, equities, fixed income, structured products and pitchbook creation in the capital market segment. Wealth management services include portfolio management, consulting and advisory services, compliance, risk management, reconciliation, and trade operations. Insurance Insurance BPO services cover collections and disbursements, pensions, property and casualty claims, property and casualty policy, and life and annuity policy. As insurance companies deal with a shrinking market, rising costs, legacy IT systems, and customer volatility, service providers are offering these services to help streamline operations, reduce costs, and grow their business.
Finance and Accounting Outsourcing (FAO) Market & Services
The finance and accounting (F&A) business process outsourcing (BPO) market provides services such as payroll processing, bookkeeping, auditing, and tax return preparation to small, medium and large enterprises. Finance and accounting BPO belong under the wide umbrella of enterprise BPO services, and are sometimes included among shared services in the Banking, Financial Services and Insurance (BFSI) industry. “Shared services” refer to an operating model that consolidates transactional activities within an organization, with the goal to reduce costs. Finance and accounting BPO is part of the shared services operating model. For example, many internal finance and accounting departments that used to serve departments and international branches grew to become businesses in their own right and went on to provide F&A services to other companies. Typical FAO shared services include accounts payables and receivables, general ledger, company reporting, tax returns, and fixed assets. Services have since expanded to include end-to-end processes like financial reporting, order to cash, HR, and compensation and benefits.
FAO Market Highlights and Trends
Sourcefit Philippines Outsourcing Blog:  Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services:Market Trends
Finance and accounting were the first functions to be outsourced by organizations, but the FAO market is far from mature. In fact, HfS said that it has a long way to go to reach saturation because majority of companies still prefer to manage all F&A functions in-house. According to the 2013 HfS Blueprint Report for Finance and Accounting BPO, the FAO market has grown 13 percent in deals, with multi-scope engagements stabilizing at $25 million annual contract value (ACV). At a growth rate of 8 percent, the finance and accounting BPO market was expected to surpass $25 billion in 2013, with four out of ten enterprises planning to expand their FAO BPO operations. Currently, the finance and accounting Outsourcing (FAO) market is rapidly evolving due to increasing buyer demand for more value and permanent administrative cost reduction. The HfS Blueprint Report showed that demand for high-quality, low-cost FAO services is highest among four key industries: telecommunications, software/high technology, media/publishing, and retail/hospitality. Demand for FAO from the BFSI industry covers a third of the market, although growth has slowed. Buyers continue to demand lower costs and standardization from F&A BPO providers. Although buyers want the value of innovation and analytics, they demand execution and delivery first. Innovation is the ability of service providers to improve services (like integrating BPO with IT), while execution is the ability of service providers to deliver real world solutions, provide high-quality customer relationships, and improve market share.
FAO and Other Outsourced Services
In a survey of more than 399 enterprise buyers, HfS identified three tiers of FAO services according to strategic importance: transactional (low-level) processes, analytical services, and consultancy products and services (services that have the potential to transform the business for the long-term). Transactional Services Low-level FAO processes include accounts payable, cash and accounts receivable, travel, entertainment and expense, credit, and billing and invoicing. Analytical Services Higher-level FAO activities include internal audits, risk management, treasury, inter-company accounting, regulatory reporting, management reporting, financial planning and analysis, and business intelligence. Consultancy Services FAO Products and services that are considered strategic include financial process consulting, change management, communications support, and innovation roadmaps.
FAO Services Value Chain
The finance and accounting outsourcing value chain is the range of value-creation activities (from design to support) that service providers deliver to buyers. At the lower end of the chain are procure-to-pay services (accounts payable, credit and travel & expense), followed by these groups: order to cash services (accounts receivables, collections, billing, revenue accounting), record to report services (fixed asset accounting, tax filing, payroll), and controllership services (inter-company accounting, regulatory reporting, management reporting, risk management, treasury, internal audits). The top end of the value chain belongs to transformational services (financial process consulting, supporting innovation roadmap, change management support).
IT or ITO Systems and Software Outsourcing
Information technology (IT) outsourcing is the practice of sourcing or subcontracting technology services (software, hardware, systems, infrastructure, maintenance, and support) outside the organization. In the banking and financial services (BFS) industry, organizations work with service providers or third parties that offer IT functions ranging from software development to automation to cloud migration. Most large enterprises outsource only a portion of any given IT function. The banking industry has always carried the torch for information technology and business process outsourcing (IT-BPO) because of its very large market size (estimated to reach $200 billion in 2016) and the crucial role technology plays in service delivery. Mobile consumers and digitization have been sweeping the industry, impacting multiple market segments.
Banking ITO Spending and Market Forecast
According to Accenture’s Technology that Matters: Harnessing the Technology Wave in Banking report, up to two thirds (about 67 percent) of the uplift required to be a high-performing financial organization in the future may come from technology-led initiatives. It’s not surprising then that the banking industry’s overall IT spending and IT spending as a percentage of revenue (8.1 percent for BFS compared to 3.5 percent cross-industry average) are way ahead of the average in all other industries. Celent projected that IT spending in the BFS industry alone would surpass $180 billion in 2014. HfS analyzed 75 top service providers of banking and IT services and found that the IT and business services market was approaching $170 billion in 2011 (2013 HfS Market Report). Banking BPO services accounted for about half of the total, while the rest belonged to banking IT services, including application and IT infrastructure management and project-based IT-related professional services. The banking IT and business services outsourcing market is projected to hit $200 billion by 2016, based on a compound annual growth rate of 5.2 percent. Compared to both emerging (procurement and analytics) and established banking BPO markets (payment processing and core bank administration), the banking IT outsourcing market is way ahead in terms of growth because of increasing commoditization. HfS reported that buyers in the banking and financial services industry will focus on IT outsourcing and line vertical processes in the coming years. The survey participants said that they will retain CRM (customer relationship management), procurement, and marketing in-house to restore customer confidence.
Importance of IT Outsourcing
To optimize consumer relationships and experience, banks will need to provide their products and services through new channels and devices, automate many processes, and upgrade core, legacy systems. Technology is also reducing transaction and distribution costs of financial services, giving banks the opportunity to reach consumers that are currently excluded from the financial system, but whose income is increasing. Accenture’s Technology that Matters report also advised banks to think about re-engineering their legacy model to fit an information-led model of the future. Today, banking ITO is not only about cost reduction and improving the bottom line, but about keeping pace with technology and adapting to change. Banks will leverage the four main technologies (big data, cloud, social media and mobility) to become fully digital and connected.
Banking ITO Service Providers
Sourcefit Philippines Outsourcing Blog:  Finance & Accounting Outsourcing (FAO) Overview and Related Outsourced Services: Banking ITO
Technology will have the biggest impact on these key areas of the business: customer experience, data and information (social media). Much of IT investment will be centered on creating a more customer-centric experience. As buyers continue to expect cost savings, service delivery models will feature innovation and flexibility and solutions that combat regulatory risk. Service providers can help banks and financial institutions deploy the right technology architecture and policies that allow banks to operate synchronized processes, increase productivity, and improve real-time processing. Service providers also allow banks to obtain new capabilities, gain scalability and flexibility, and focus on strategic priorities.
Human Resources Outsourcing
Human resources outsourcing (HRO) is the transfer of responsibility and risk for HR functions to an agency outside the organization. The agency or HRO service provider performs a part of all HR services for the organization. Some companies prefer to outsource their entire HR department, while others outsource only non-core administrative tasks. Human resources outsourcing in the BFS industry belong under enterprise BPO services and shared services. Common HRO services that are outsourced include payroll, compensation and benefits administration, recruitment administration, workforce administration, employee helpdesk, and learning management.
Market research covers both multi-process human resource outsourcing (MPHRO) and single-process human resource outsourcing (SPHRO). Everest Group defines MPHRO as the practice of outsourcing multiple HR services to one provider in an integrated way, while SPHRO is practice of outsourcing a single, standalone HR activity. Integrated MPHRO include transactional and analytics-level services: payroll, benefits, employee data management, compensation, recruitment, learning, performance and succession, global mobility, regulatory and compliance, and employee relations. SPHRO covers transactional and lower-level analytics services: payroll, recruitment, learning services, and benefits administration.
HRO Value Chain and Core Processes
In its 2014 Blueprint Report for multi-tower HRO, research firm HfS identified core processes in the HRO value chain. The value chain refers to services, programs and departments that support an organization’s workforce. The HRO value chain ranges from low-level transactional processes, mid-level judgment/analytics processes, and high-level strategic services. Data management, benefits, payroll are transactional, while compensation, recruitment, learning services, global mobility, regulatory and compliance, and employee relations are judgment-intensive. Strategic HRO services include HR strategy.
HRO Market Forecast
In its Global HR Outsourcing Market Forecast: 2014-2018 report, NelsonHall analysts predict that the global HRO market will grow at a compound annual growth rate (CAGR) of 12.34 percent from 2013 to 2018. The HRO market remains strong across payroll, benefits administration, recruitment process outsourcing, learning BPO, and multi-process HR outsourcing (MPHRO). The need to cut operational costs, standardize processes, and support globalization of operations remain key overall market growth drivers, while the biggest main market challenge is the disconnection of organizations from their workforce. The key market trend is the increasing use of social media to recruit potential candidates. Due to a slower global economic growth, organizations are facing the pressure to maximize productivity while reducing hiring and recruitment costs. Organizations are also facing disconnection from their employees due to the lack of direct access to an HR department. This leads to reduced efficiency and delays in addressing problems.
HRO in the Banking and Financial Services Industry
HRO in the banking and finance services (BFS) industry is mainly driven by the pressure to reduce costs, improve process efficiency and focus on more strategic activities. Major HRO service providers understand that large companies outsource human resources not only to be cost competitive, but to improve employee experience and build a strong support system as the organization grows. Deloitte Consulting’s Human Resources Benchmark for Banks report stressed that HRO buyers and providers in the banking sector have realized the need to gain insight from client organizations to achieve better performance. Banks are starting to look for providers that can help them select top performers, improve retention of key performers, and speed up time to competency. According to Deloitte, the primary driver of cost efficiency for banks and lending institutions is the development of an effective service delivery model. To be cost-competitive in an uncertain market, banks need to work with service providers that forecast and fulfill talent gaps and align workforce plans, capabilities, and worker performance with business strategy. As HRO buyers continue to prize industry-specific domain expertise and deep process knowledge, key service providers will offer sophisticated analytics to gain insights and drive better decision-making among human resource managers and executives.
Training or Procurement Outsourcing
Procurement is the process of acquiring and managing raw materials or services needed to create a product or service. Procurement outsourcing is the practice of hiring a third party to handle an organization’s procurement activities and related functions. In the banking and financial services (BFS) industry, procurement outsourcing is the transfer of key procurement activities like sourcing, supplier management, and transaction management to a third party. According to the HfS Procurement Outsourcing Blueprint for 2013, the procurement outsourcing (PO) market will grow at an annual rate of 12 percent over the next 5 years. HfS reported that procurement contracts are piggybacking on the established finance and accounting outsourcing (FAO) market, driving the growth of the PO segment. Across all industries, CFOs and procurement officers outsource procurement activities not only to reduce labor costs, but to take advantage of core values like provider expertise, effective spend management, and the latest technology. From low-level procure-to-pay (P2P) processes like invoicing and accounts payable, companies are now outsourcing high-value procurement services like spend analytics and vendor governance. Leading procurement providers are those that offer specialized vertical expertise and geographic market sourcing presence.
Procurement BPO Services
Banks, lending institutions and other finance organizations do business with thousands of vendors that provide a wide range of goods and services. Common purchases include supplies (office supplies, paper), facilities/building services (housekeeping, construction), equipment (information technology (or IT infrastructure, servers, automobiles) and professional/technical services (consulting, software, marketing). Procurement activities generally fall into two categories: direct and indirect. Direct procurement is the purchase of goods and services that enter directly into the company’s production process, while indirect procurement is the purchase of goods and services that support the company’s activities. Direct categories are typically proprietary or sourced internally by a financial institution. Indirect categories are wider in scope, covering everything from IT (software, hardware) to human resources (recruitment and training) to facilities (construction, cafeteria/foodservice, cleaning). Everest Group further classifies direct procurement activities under core or non-core spending. Core Spending
Sourcefit Philippines Outsourcing Blog: FAO Overview and Related Outsourced Services - Procurement BPO
Under direct procurement, core spending refer to raw materials or ingredients that are proprietary or specific to the organization, while non-core spending refer to commodities required to deliver the service. Non-Core Spending Non-core direct spending and indirect procurement activities are generally more commonly outsourced than direct procurement. Depending on the contract, the procurement service provider may ask for fixed fee against realized savings or a performance-related fee (a percentage of savings). Everest Group also classifies procurement processes into procure to pay (P2P) and source to contract (S2C). P2P activities like requisition and invoicing are transactional or low level, and S2C activities like spend data management and strategic sourcing are judgment intensive or mid-level. In-house processes like mission and business strategy are considered strategic or high-level activities.
Procurement BPO Benefits
Indirect spend can account for 15 to 40 percent of a company’s total revenues. According to research by Accenture, most companies achieve only a fraction of potential savings in the real world. Companies with efficient procurement processes realized 30 percent more savings than low performers. These “procurement masters” also leveraged outsourcing more than their competitors. Financial institutions that outsource procurement expect to reduce overall costs, increase focus on core competencies, and achieve bottom line savings. Procurement outsourcing providers allow companies to benefit from specialized support and domain expertise, avoiding the expense of setting up, managing and supporting an internal procurement team. It is difficult to match the enormous functional, industry and category expertise that procurement service providers bring, even with a dedicated in-house team. With savvy market intelligence, advanced sourcing tools, and deep best practices gained from managing the procurement activities of several banks and lending institutions, procurement service providers are well-positioned to help CFOs realize maximum potential savings.
Finance and Accounting outsourcing (FAO) Services
Finance and accounting outsourcing (FAO) is the transfer of an organization’s bookkeeping activities to a third party, whether in whole or in part. Third parties provide services like payroll processing, tax preparation, audits, budget, and consulting services. In the banking, financial services and insurance (BFSI) industry, finance and accounting outsourcing belongs under enterprise or shared services. According to the HfS Finance and Accounting BPO Blueprint Report for 2013, a third of the demand for FAO services comes from the banking and financial services industry, with demand gradually slowing down. Most banks and lending institutions outsource finance and accounting processes to realize cost savings and access service provider category expertise. Finance organizations increasingly value execution or the ability of service providers to deliver real-world solutions and drive business growth, followed by innovation.
FAO Services Value Chain
The finance and accounting outsourcing value chain is the range of activities or processes that support a bank or financial institutions product or service. At the lower end of the chain are procure-to-pay services (accounts payable, credit, and travel and expense). Mid-level FAO services include order to cash services (accounts receivables, collections, billing, revenue accounting), record to report services (fixed asset accounting, tax filing, payroll), and controllership services (inter-company accounting, regulatory reporting, management reporting, risk management, treasury, internal audits). At the top end of the FAO value chain are transformational services (financial process consulting, supporting innovation roadmap, and change management support).
FAO Services
HfS identified three tiers of FAO services according to strategic importance: transactional (low-level) processes, analytical services, and consultancy products and services (services that have the potential to transform the business for the long-term).
Transactional Services
Low-level FAO processes include accounts payable, cash and accounts receivable, travel, entertainment and expense, credit, billing and invoicing, and payroll processing. Accounts Payable Accounts payable is money owed by the organization to creditors. Service providers handle invoice scanning, coding, matching to P.O., scheduling, account reconciliations, and related activities. Providers also offer software to streamline these processes. Accounts Receivable Accounts receivable is the money owed by clients or customers to the organization in exchange for the sale of products or services on credit. Service providers handle drafting, sending, and monitoring of outstanding bills and offer virtual account reconciliation services. Payroll Processing Service providers handle employee payroll processing (employee benefits and compensation, tracking vacation and leaves, W-2 forms processing) and manage IRS regulations, ensuring that correct taxes are paid on time.
Analytical Services
Mid-level FAO activities include internal audits, risk management, treasury, inter-company accounting, regulatory reporting, management reporting, financial planning and analysis, and business intelligence. Internal Audit Providers handle financial and operational internal auditing, IT internal audits, fraud analytics, risk assessment, finance and supply chain management to improve or augment a financial institutions current internal audit initiatives. Risk Management To meet complex risk and compliance challenges that banks face, service providers offer enterprise risk management solutions, consulting, and assurance services that cover risk management areas like market, credit, and Basel, Dodd-Frank, CRD, and EMIR. Treasury Services Outsourced treasury services are activities that manage a bank’s enterprise's holdings and operational and reputational risk. Service providers help banks establish more efficient systems for reporting cash flow and reserves and allow CFOs to make informed business decisions. Treasury services include disbursements, investment and funding, trading (bonds, currencies, financial derivatives) and financial risk management. Regulatory reporting In a market with unprecedented reporting and compliance standards, third parties help banks review books to identify and resolve potential tax issues in advance. Service providers help banks meet both compliance and cost efficiency goals with services like record-keeping, transaction reporting, and reconciliation.
Consultancy Services
FAO services that are considered high-level and strategic are financial process consulting, change management, communications support, and innovation roadmaps. Financial Process Consulting Outsourced financial process consulting services in the banking industry include income statement analysis, balance sheet or cash flow analysis, group consolidation, planning, and budgeting. Service providers have in-depth knowledge of business intelligence tools and enterprise resource planning (ERP) systems to drive efficiency and reduce errors. Change Management A bank may hire a third party to head or manage the organization’s change management activities during transition periods, market changes, or in response to new and stricter regulations. Innovation Roadmaps Third parties can provide innovation roadmaps to identify key capabilities that will improve an organization’s innovation performance.
Some Reasons Managers May Choose to Outsource offers more helpful insights. To learn more about the opportunities and possibilities of building your own team of professionals in the Philippines, contact Sourcefit today and talk to an expert. Share This: ]]>
<![CDATA[ Guide to Banking BPO, Financial Services Outsourcing ]]> Sourcefit Philippines, BPO Blogs: Guide to Banking BPO, Financial Services OutsourcingBanking and financial services outsourcing is the use of third party providers to deliver services or perform tasks normally undertaken internally by financial institutions. The third party financial services provider may be located locally or offshore. Banking BPO (business process outsourcing) is a strategic tool that supports business growth and account servicing functions. At the start of the last decade, professional services firm Deloitte estimated that in the United States alone, $356 billion of the financial services industry will be offshored to third party providers within five years after 2004. More recent studies done by consultancy firms KPMG ad HfS show that global spending on finance and accounting business process outsourcing (BPO) services will grow at a rate of 8 percent until 2017. In an increasingly competitive market, many banks and financial institutions are positioning themselves for growth by turning to offshore providers to take advantage of low cost, high-quality services. Deloitte reported that organizations increasingly leverage banking BPO as a cost reduction tool and a sourcing strategy. Many investment banks have offshored or outsourced over 50 percent of their finance services and are planning to offshore highly complex responsibilities, according to KPMG. Trends indicate banks and lending institutions are moving from outsourcing transactional functions to specialized core roles like financial and internal management reporting, budgets, capital management/reporting and regulatory returns.
Banking BPO Services
The impact of banking BPO and finance services offshoring extends to several business areas and can be seen throughout the lending lifecycle. Areas include information technology (IT), finance and accounting (FAO), discrete back office functions, and contract services. Industry research shows that finance organizations outsource both regulated and unregulated functions within outsourcing contracts that vary in scope and complexity. Banks and lending institutions typically offshore transactional functions such as new customer acquisition, account servicing, consumer and commercial lending, and back office process management. Less commonly outsourced are higher-value functions like budgets, forecasts, regulatory returns, and capital management.
Customer Acquisition Services
Customer acquisition services include a set of functions and systems that generate and manage prospective customers, leads, and inquiries in the banking and finance sector. Customer acquisition management is considered a link between advertising and customer relationship management. Customer acquisition management services provide an organized environment for managing large volumes of leads and inquiries at various stages of the customer lending lifecycle and across local or offshore sales departments. Third parties also provide closed-loop reporting that measures the effectiveness of promotional activities and allows clients to realize improvements. Offshore providers utilize various marketing techniques to acquire new customers like customer loyalty programs and customer referrals. Customer acquisition management also covers services like telemarketing, credit evaluation, verification and approval, document and application processing, underwriting, and customer support. Credit Evaluation and Verification Offshore third party providers allow banks and financial institutions to minimize credit risks and frauds through verification services like risk profiling, telephone re-verification, payback capacity evaluation, and implementation of a credit decision-making model. Document and Application Processing Application processing in the banking industry is a time-intensive task that requires a critical and experienced eye. It starts with digitization of physical forms and supporting documents and transmitting the scans to a centralized location. Data is captured, completed, indexed and checked for errors before the validated file is sent back to the original location. Post-processing is then done at the core location. Third parties provide document and application processing services as well as proprietary application processing software that simplify and improve existing processes. Software can be configured to specific workflows, quality needs and any type of application form. Telemarketing and Promotions Customer acquisition management also covers telemarketing and promotions to generate leads and respond to a prospect inquiry. Besides telephone, marketing efforts to heighten the prospect’s interest can be done through brochures, letters, e-mails, SMS, and chat.
Account Servicing Processes
Offshore providers offer account servicing processes and software to manage consumer and commercial accounts like debit cards, credit cards, and consumer/commercial loans. Offshore consumer banking services allow organizations to adapt to changing regulations and technology, launch new products quickly, and exceed customer expectations while keeping costs low. By offshoring account servicing processes, banks and financial institutions also achieve full regulatory and policy compliance, reduction in payment turnaround time, reduction in average cost per transaction, and a four-fold increase in productivity. Account servicing processes that can be offshored include consumer account management, merchant or commercial account management and capital market services. Consumer Accounts Effective management of consumer accounts help foster customer loyalty. Third parties can handle transactional functions like customer service (online, telephone, mail), retail banking, originations, end-to-end consumer lending and mortgage services, account renewals, loans disbursement, and cards services, as well as core operations like wealth management. Third parties also offer fraud and anti-money laundering (AML) and risk analytics. Commercial Accounts Offshore commercial account servicing can reduce total cost of ownership, reduce operational risk, and provide a unified solution for several banking products. Third parties provide a wide range of services that include payment processing (fund transfers, liquidity management, fraud analysis, pension and dividend payments, billing, reporting), commercial loan processing (including credit evaluation, underwriting, and collateral evaluation), and trade finance services (analytics, fraud management, origination, customer service, reconciliation). Capital Markets Offshore account servicing for the capital markets industry improves business performance and standardizes processes at the lowest cost. Capital markets account servicing processes cover front, middle and back-office. Services include research and analytics across industries, valuations, model development, data analysis support, valuations, trade processing, clearing and settlement, data management and reconciliations.
Consumer and Commercial Lending Services
Third parties provide lending solutions for all phases of consumer and commercial lending, from loan origination to asset management. For consumer loans, outsourced services include sales, processing, underwriting and closure, research and analysis, foreclosure and pre-foreclosure, loss mitigation, debt protection services, bankruptcy, loan modification, data management, and risk management. Offshore commercial lending services include automated processes, analytics and reporting, flexible capacity models, and end-to-end process management. Third parties also provide mortgage services that help banks preserve capital, increase business forecasting, and generate revenue from growth markets. Research by Everest Group pegged the global lending BPO market at about US$ 21 to 23 billion in 2011, split evenly between third party providers and shared services. The share of BPO-centric service providers are growing nearly three times faster than the utility-based providers, which dominate the market. Part of the reason is that new and stricter lending regulations are segmenting the demand for loan products. Financial institutions are under pressure to reduce costs and grow revenues in a highly volatile environment, and many are turning to offshore providers to achieve their business goals. Offshore banking BPO services help companies align their operations with dynamic market requirements using automation and flexible capacity models. Businesses can gain more than 50 percent savings through standardized processes, automation, and lowest industry rates for compliance management. Organizations can do more with data acquired from digital and physical products by combining information with offshore analytics, research, and reporting. Offshoring is also a way to boost IT initiatives (such as online self-service loan origination and collections) that support revenue generation. With standardized processes across multiple locations, quality improvements and operational flexibility from third parties, companies can speed up loan origination, increase time-to-market for products, and provide topnotch customer service.
Back Office Transaction Process Management
Third parties provide management of back office financial transactions for consumers and merchants and for banking products that range from credit cards to mortgages. Common services that can be offshored include fraud detection, anti-money laundering (ALM) services, regulatory compliance monitoring, custody services, portfolio analytics and reporting, asset/investment management, and IT management. Custody Services Custody services refer to safekeeping services that a financial institution provides individuals and merchants. On behalf of the customer and for a fee, the custodian collects dividends, interest and proceeds from the sales of securities and transfers the funds to the client’s account. This process reduces the risk of the client’s assets being stolen. Unlike banks, custodians cannot use securities for their own ends. Third party providers can handle these functions for the organization providing custody services, allowing the company to reduce costs significantly, improve process efficiency, and streamline workflows through automation, standardization, and other best practices. Fraud Risk Management and Anti Money Laundering (ALM) Banks handle local and foreign accounts that are highly profitable but also high-risk. Fraud risk and AML officers perform customer due diligence (CDD) and ensure that accounts comply with regulations and pass government scrutiny. Back office processes like fraud risk review, AML monitoring, account verification, chargeback, recoveries, regulatory reporting, and risk analysis can be offshored to an experienced third party. Third parties can help improve a financial institution’s risk management efforts through standardization, automation, and process improvements while cutting costs. With their domain expertise, offshore providers can also better track fraud losses and fraud trends across regions and help organizations optimize fund recovery efforts. Portfolio Analytics Portfolio analytics is the evaluation of the performance of a consumer or merchant’s investments and how it affects returns. Third parties offer consulting services and portfolio analytics software to manage portfolios. Typical analytics software may include charting and attribution tools, detailed reporting, weights and variables, and data that drive returns.
Current Trends in Banking BPO Services/Financial Services Offshoring
The Banking, Financial Services and Insurance (BFSI) business process outsourcing (BPO) industry is composed of three verticals: banking and financial services, capital markets and investment banking, and insurance, of which banking and financial services BPO is the largest and most mature. In general, BFSI has always been the sector that is most open to business process outsourcing/offshoring (BPO). BFSI is unlike no other industry in that the regulatory landscape is the most stringent, and the volume of transactions handled is the highest. The expectation of completing transactions in real time is also very high, and the consumers are the most demanding. In turn, finance organizations also place the greatest demands on local and offshore BPO providers. Banks and lending institutions have led other industries in technology spending and adoption of new trends, especially outsourcing, mainly because of these drivers: extremely stringent regulations, economic challenges and uncertainties across geographies, changing customer engagement channels, and the importance of technology and digital transformation in improving the bottom line. According to Everest Group’s BFSI BPO Market Report in 2013, the pressure to cut costs and to be more agile, to acquire new customers and exceed customer expectations, and to grow beyond traditional markets drive financial institutions to work with experienced partners. Banking BPO is increasingly seen as a strategic tool to achieve business goals and stay competitive in the marketplace.
Banking BPO Market Forecasts
In 2013, research firm HfS studied the banking and finance services (BFS) outsourcing market and evaluated the top 75 providers of banking and IT services. Its 2013 Market Report in the banking and finance services BPO industry showed that the BFS BPO industry will continue to trend at a 5 percent compound annual growth rate (CAGR) until 2016. Based on a 5.2 percent CAGR, the BFS BPO market is projected to be worth about $200 billion by 2016. With that market size, BFS remains the most attractive vertical for BPO service providers. While banks and finance organizations focus on cost reduction and business growth, service providers try to create new offerings, improve service delivery models, and increase market share. NelsonHall’s Global BPO Market Forecast for 2014-2018 reports that overall, North America will be the biggest market for banking BPO in the next five years in spite of having the lowest growth rate among major markets. NelsonHall predicts that retail banking BPO will grow more slowly than capital markets BPO, with growth driven by core banking, loan administration, and merchant acceptance processing. The fastest growing vertical will be capital markets BPO in trade processing services (with reference data BPO services as the fastest growing in capital markets), followed by portfolio services and retail banking BPO. Meanwhile, check processing BPO will continue to shrink.
Banking BPO Trends
The same NelsonHall study confirmed that economic uncertainty and increasingly tighter industry regulations have greatly impacted the banking BPO market. In the past year, activity has increased in the banking BPO industry as new policies were rolled out and clarified. The growth is expected to continue over the next five years, even faster than the growth of the entire BPO industry. 1. The offshoring advantage. Banks and financial institutions, like any other company that aims to maximize resources and reduce costs, are working with third parties in offshore locations to benefit from labor arbitrage. Emerging markets like India and the Philippines still offer the lowest industry prices for banking BPO services that compares in quality with services from local or near-shore providers. 2. Onshore resourcing. Everest Group practice director Anupam Jain reported in late 2014 that regulatory concerns are driving banks and lending institutions toward onshore resourcing. Although companies retain control over offshore captive centers, risks related to compliance pressure make the finance sector wary of full-blown outsourcing. Instead, companies prefer to offshore “transactional” or non-core back-office functions while holding on to highly-regulated services. 3. New offshoring projects. As service providers increase their local, near-shore and offshore capabilities to stay relevant, costs will remain competitive and give banks more comprehensive options to choose from. This will lead to expansion of current projects and new initiatives like mobile solutions to improve customer engagement and improve the bottom line. 4. Growth of banking analytics. According to Everest Group’s BFSI BPO Market Report 2013, service providers are creating new analytics solutions to help organizations process Big Data and leverage information to gain customer insights. Companies can also expect better risk management solutions. For example, capital markets companies are partnering with offshore third parties to meet regulatory requirements and manage risk more effectively.
This case study provides helpful insights on accounting and payroll services outsourcing in the Philippines. Or talk to an expert today. Contact Sourcefit and a member of our upper management team will help you determine the opportunities in building your dedicated team of professionals in the Philippines. Share This: ]]>
<![CDATA[ Telesales and Customer Service Outsourcing Trends in 2015 ]]> Sourcefit Philippines, Outsourcing Blogs: Telesales and Customer Service Outsourcing Trends in 2015The beginning of the year is a great time to tune in to trends and understand where customer service and telesales are headed. What should your company focus on to make the customer experience even better? Whether you run a startup or a corporation, here are some telesales, customer service and outsourcing trends to watch:
Customer Service, Telesales Outsourcing and the Mobile Consumer
2014 already saw consumers flocking to mobile phones and tablets to interact with stores and companies. Insiders expect this trend to continue to 2015 and beyond. As mobile devices increasingly simulate the power of desktop computing, consumers are using applications for richer and more seamless experiences. The retail industry stands to gain the most as mobile payment options and mobile e-commerce apps and websites proliferate. In 2014, the number of people who visited websites from mobile devices exceeded those who visited from desktops. For business owners, this means providing a satisfying digital experience for clients is of top importance. While customers will continue to use traditional lines of contact like phone and email, managers should build a stellar service delivery model focusing on mobile customers. The best setup is not merely an add-on to your existing website or a mobile-optimized interface; mobile software is geared to become a brand on its own and a standalone product. How do you make mobile consumers happy? The same principles of great customer service apply: quick solutions and the right answers to their questions. The right software should let your customers find what they are looking for easily and quickly; otherwise, they will look for more readily accessible alternatives. Besides mobile assistance, make sure your customers can also reach you through live chat, phone, social media, e-mail and SMS. As you interact with customers across multiple channels, let your customer service team use the same knowledge base for consistency. Other customer service trends for 2015: 1. 24/7 Help 24/7 assistance is not exactly new, and customers will continue to demand round the clock service in 2015. Whether you run a small business or an international conglomerate, you should aim to be there for your clients during after-hours. 2. Merging of e-commerce and traditional retail. A growing number of customers are shopping online, and businesses must ensure a seamless, integrated experience whatever the channel of interaction. Your customers should be able to find and buy what they need easily and quickly. 3. Changing customer loyalty. It’s easier than ever before for customers to pick and choose among the multitude of shops available. If they can’t find what they want quickly or if they feel that you don’t listen or treat them with respect, they will gladly look for another company that makes them feel appreciated. 4. Customers value quick response time. The longer it takes for a company to respond to a customer’s question, the greater the feeling of overall dissatisfaction. To retain loyal customers, it is crucial for customer service agents to respond in a timely manner. 5. Flexible guidelines are better. Rules that are set in stone tend to leave customers dissatisfied. Instead, design guidelines that adapt to changing customer needs and train your employees to make decisions based within those guidelines. 6. Live Chat and Text Messaging are here to stay. More businesses will use Live Chat and Text Messaging to interact proactively with their customers in 2015. The key is a thoughtful campaign that will make your customers feel valued without putting them off with a barrage of meaningless text. Make it as easy to opt out as it is to sign up for e-mail, text, SMS, and other communication channels. 7. Customers rely on great reviews. Many customers look at review sites like Trip Advisor and Google ratings before choosing a product, restaurant, dentist, etc. Focus on increasing five star reviews of your company in these sites by providing a great product and excellent customer service.
Telesales Strategy for Profitability in 2015
Your company can significantly increase the bottom line by making small adjustments to each part of the business process. It begins with lead generation from three customer categories: new, current, and past customers. Don’t focus too much on attracting new customers that you forget your existing customers. With a solid marketing plan, a potential customer will initiate contact with your company. The job of your telesales team is to convert these leads into buyers. At the very least, you should have a script that allows your team to deal with customer questions in a way that is consistent with your brand and values. Monitor the average number of sales (total sales/total transactions) and figure out a system to increase this number. It can be in the form of discounts, packaging redesign, a new product mix, upselling a complementary product or a combination of these tactics.
Outsourcing Customer Service and Telesales to the Philippines
One of the best ways to improve productivity, reduce risk, and increase profits is outsourcing some of your non-core activities. It can be difficult to build, oversee, and monitor a dedicated customer service and telesales team in-house, particularly if you run a startup or small business. Even if you own a large company, establishing a separate customer service hub overseas can greatly streamline your processes and cut costs. The Philippines is one of the world’s top telesales and customer service provider. Small businesses and large corporations alike have long established operations in the country due to its growing talent pool that is college-educated and highly proficient in English. Best of all you can find a BPO provider in the Philippines such as Sourcefit which offers custom solutions that any type of business can leverage. The flexible service delivery models can be tailored for small, medium-sized, and large businesses. The ultimate advantage is gaining access to top quality sales and customer support services at the lowest prices in the industry.
Click on this case study for a great resource on customer support and telesales outsourcing in the Philippines. Or contact Sourcefit. We’ll help you build your own team of experienced professionals in the Philippines. Share This: ]]>
<![CDATA[ IT Outsourcing Growth & Offshore IT Services Trends in 2015 ]]> Sourcefit Philippines, Outsourcing Blogs: IT Outsourcing Growth & Offshore IT Services Trends in 2015IT outsourcing and offshoring IT services rose to an all-time high of almost 20 percent in the first three quarters of 2014 in the U.S., according to a report by the Information Services Group (ISG). ISG expects a similar trend in 2015 based on the number of business process outsourcing (BPO) contracts for IT support, IT services, system/network admin services and market growth. This is in contrast with earlier predictions in 2014 that about 30 percent of IT services would be brought back in-house as companies grew more confident about managing their own processes. Besides a surge in market confidence, experts say that IT outsourcing and IT services in 2015 are headed toward: Customization. Many companies lack the expertise, in-house talent and budget to build, support and oversee IT services that streamline business processes and improve the bottom line. The need for custom delivery models and processes will also drive partnerships with a third party that can guide your company toward success. Outsourcing as needed. Companies who have their own IT team are expected to augment their in-house staff with outside experts on as needed basis. Many multinational corporations are already using this approach of combining internal capabilities with outside help when necessary. Super data centers. Small data centers are now capable to handle much more as performance increases per kilowatt and upgrades add power. This change requires asset use analysis, refresh cycle reduction, and core boosting to manage utilization levels effectively and retain a company’s footprint. Integrated data centers. Commonly separate networks, servers and storage will continue to be aggregated to optimize workloads and allow quick parts replacement. Resource management. Organizations will be more aware of energy use and KPI consumption, increasing the need for better-managed energy information systems. Mobile consumers. More people visited websites from mobile devices than from desktops in 2014. The mobile consumer demands a change in mindset for many companies as e-commerce merges with the brick and mortar shopping experience. The sheer number of devices that users demand platforms on makes building them a challenge, but cloud-based services and powerful data centers are bridging the gap and addressing security issues. Mobile app development trends include multiplatform development, wearable tech, and new methods of customer engagement. Mobile CRM. Startups are leading the way in customer relationship management (CRM) services designed for mobile. While established vendors have trouble with their one-size-fits-all CRM approach, startups are innovating and bringing better mobile CRM applications to the table. Mobile analytics. More sophisticated analytics and monitoring tools will allow companies to find out what content their workforce is accessing and what to do when issues arise. Better analytics tools are also available for CRM, Voice over Internet Protocol (VoIP), and other platforms. More cloud service options. The convergence of IaaS (infrastructure as a service) and PaaS (platform as a service) will drive app building, testing, and deployment. Companies will also adopt hybrid cloud techniques, but are advised to develop after private services and public delivery have been integrated. As systems increase in functionality, complexity also increases. It’s important to get the most out of IT spending with the right enterprise software. Virtual networks. Virtual networks mean increased automation, improved agility, simplified design, network management integrated with IT workflow systems, and other changes in interaction and processes. Experts suggest making storage virtual, evaluating inputs, trimming what is unnecessary, and organizing and prioritizing what remains. Integration of business and social media. Social media, business services, and the internet are expected to consolidate through mergers and alliances, becoming genuineB2B and B2C business tools.
IT Outsourcing and Offshore IT Services Continue to Grow
As economic conditions improve in the U.S. and confidence in the market grows, corporate clients are increasing their ITO spending as well as expanding the scope of ITO contracts and range of services. However, outsourcing research and analysis firm NelsonHall warned that there’s still room for improvement as offshoring providers compete and drive prices down. In 2015, the best companies to take advantage of the ITO upswing are those who are able to provide the best customer experience. Providers must have the right platforms and the right talent to provide top notch service and attract buyers. Businesses will focus on outsourcing non-core operations to improve profitability and reduce costs, everything from IT support to systems administration to infrastructure. Businesses will continue to adopt cloud-based services. Cloud computing offerings are going to be more diverse and will cater to processes traditionally handled by in-house IT teams. Besides Software-as-a-Service (SaaS), mobile and big data application development will also move to the cloud. Many multinational companies are going to leverage the power of offshore cloud services as data security improves, compatibility issues are sorted out, and management tools mature. CIOs will manage data depending on sensitivity and complexity, and those who adopt in-house and cloud-based models will be the most successful.
IT Outsourcing to the Philippines
As the volume and variety of data hitting the public and private sectors continue to snowball, the need to manage data effectively will also grow. If your company is already making deep cuts but is still not streamlining process workflows or making a difference on the bottom line, it may be time to outsource IT services to the Philippines. The Philippines’ IT-BPO sector is one of the major contributors to the country’s economic growth, and forecasts are optimistic for the coming year. The Philippines has the infrastructure and rich talent pool of experienced, English-speaking IT professionals and support staff to take your business to the next level.
Click here for a great resource on IT offshoring in the Philippines. This popular post, IT Outsourcing (ITO) & IT Outsourcing to the Philippines, can also help you in the decision-making process. Or contact Sourcefit, an outsourcing company in the Philippines, for a free, no-risk consultation with an expert. We’ll help you explore the opportunities. Share This: ]]>
<![CDATA[ Web Design, Web Development & Graphics Design Outsourcing: 2015 Trends ]]> Sourcefit Philippines Outsourcing Blog: Web Design, Web Development, Graphics Design Outsourcing 2015 TrendsWeb design, web development and graphic design and offshore outsourcing these tasks are in for some changes in 2015. Building on trends from 2014, these changes will greatly impact businesses (those that outsource their web design and those that have in-house teams) and the design community. What should your outsourced or in-house design and development teams be on the lookout for? What trends will affect productivity and the bottom line? Industry watchers present the top trends making waves now and in the coming year. Not all will be adopted at the same rate, but companies should make strategic decisions about them next year and beyond. Here’s what’s in store for web development and design:
Responsive Design
Responsive web design is a web design approach that provides the best viewing experience across all devices, from desktop to mobile. The page is easy to read and navigate without much scrolling or resizing, whether you are on a tablet, PC or iPhone. Sizing is fluid rather than absolute, allowing the page to adapt visually to whatever device you are using. Responsive design has become the new standard and is here to stay.
Scroll over Click
In 2015, more website visitors will come from mobile devices than desktops, ushering the era of scrolling over clicking. The result can be an endless barrage of information for desktop users, but you’re going to keep your mobile users happy by providing a more dynamic interactive experience.
Affordable Typography
Beautiful typography is big now and will continue to dominate websites in 2015. Beautiful typefaces tend to be expensive, leaving companies with tight budgets out of the fun. Not anymore. Type kits are going to be more affordable and accessible to designers wanting to make a splash with eye-catching fonts.
Big Backgrounds
Beautiful pictures and videos that fill the entire page will continue to mesmerize viewers, or at least make them pause and consider what you are selling. Not just any image will do, however. Make sure it is thoughtful, relevant, and arresting, not gimmicky or slapdash.
Semi-Dimensional Design
Google is the leader of flat design and now of semi-flat design. Instead of flat geometric shapes, the shapes get subtle shadows to make them look like more like real-world objects without being full-on three-dimensional.
Transparent Buttons
Transparent or ghost buttons are those empty geometric shapes typically bordered by a very thin line and paired with an unobtrusive sans serif font. Ghost buttons are everywhere and many websites aiming for the minimal, stylish look are adopting them.
Unique Branding
Design elements like typefaces, content, interactive page elements and even color that embody your company values and philosophy are going to be what visitors are going to respond to and connect with. Make sure that your web presence is as solid, memorable and unique as the product or service you are selling.
Mobile Computing and Design
As more people use mobile devices, web development will focus on the needs of consumers rather than device design alone. Better security, simple user interfaces, and smarter interactions should improve the customer experience.
Smart Machines and the Internet of Things (IoT)
The Internet of Things is a scenario where man-made or natural objects are connected to the internet and are able to transfer data over a network. Today, it mostly refers to machine to machine communication in the energy and manufacturing industries. According to a Business Insider intelligence report, the Internet of Things will be more than double the size of the mobile device, PC, connected car, and wearable tech market by 2019. Smart devices will drive the development of elegant systems that respond appropriately to their surroundings. Smart machines like robots, intelligent operating systems, and advanced virtual assistants are already here and rapidly evolving. They won’t become mainstream in 2015, but when they do, it will be the most disruptive moment in IT history.
Outsource Web Design, Development & Graphics Design to Stay Productive and Profitable
Web development and design outsourcing had a banner year in 2014, and analysts predict the trend will continue to 2015 as the corporations and businesses grow more confident about the market. As companies aim to provide a better experience across all devices for their customers, cutting edge technology and infrastructure along with specialized design and development skills will be in demand. If you run a fledgling company or a startup, the best way to stay relevant and compete with the big players in the industry is to outsource web development and design to an experienced third party. Large firms can also benefit from the rich network, domain expertise, and advanced technology that web development and design firms offer. As cloud and mobile computing continue to promote the growth of integrated apps that can be accessed by all devices, companies will need more agile programming to deliver flexibility in the digital business environment. It can be difficult to recruit and train the right professionals for the job. Instead, you can save time and money by partnering with an offshore provider with a proven track record.
Web Development and Design Outsourcing to the Philippines
The Philippines is one of the world’s top outsourcing destinations, and it is expected to remain a major global outsourcing player for years to come. Traditionally a call center hub, the Philippines is expanding offerings to accommodate the growing demand. The country’s business process outsourcing (BPO) providers offer topnotch web and application development and design at the lowest industry prices, along with cloud-based services and other high value IT services. Any size and type of business can access a rich pool of skilled and experienced web developers and designers who communicate excellently in English and are able to work in all time zones. Philippine providers make it so easy to get started by offering risk-free consultations. There is no obligation until you find the perfect custom solution for your business.
Is Outsourcing Right for your Business?
To learn more about offshoring web design, development and graphics design, please visit Web Design Experts Web Development Team and Graphic Design. Or click here for a free, no-risk consultation with an expert at Sourcefit, an outsourcing company in the Philippines. We’ll help you explore the opportunities. Share This: ]]>
<![CDATA[ Software Development Offshore Outsourcing: 2015 Trends ]]> Sourcefit Philippines, Outsourcing Blogs: Software Development Offshore Outsourcing: 2015 TrendsSoftware is getting more complex and there is no turning back. While the internet of things (IoT) where everything is connected to the web still belongs to a distant future, it’s hard not to ignore where software is going. Today, it is not only communication and entertainment devices that are Wi-Fi-enabled, but also common household items like lights, which can automatically change lighting depending on the weather. Software powers core business activities in virtually all industries. Through applications, doctors access patient information while on the go, people book flights and concerts, and buy merchandise. The financial services sector heavily relies on special software and employs developers by the thousands to create apps that serve the customer, improve productivity and profitability, and reduce risk. The approach required to build this type of software is completely different from traditional development methods. 2015 key development trends like design thinking, open source development, big data, and refined testing will drive the creation of software that support critical business processes. Experts say these trends will have a major impact on IT and business strategies for the coming year.
Design Thinking
Design thinking is a design strategy that is people or customer-centered. Developers focus on the needs of consumers instead of a specific technology. The process includes observation, gathering ideas, making a prototype, and testing. Experts and multidisciplinary professionals come together to throw ideas around and ultimately create something of value for the end user. In 2014, the increasing complexity of software forced big development changes. Design thinking will drive software development in 2015, with the goal of creating applications that serve the consumer. The age of the consumer will foster reinvention of many organizations, and design thinking will be critical in the product development process. For those with little experience in design thinking, you can start with brainstorming sessions with your team members and identifying steps in the development process where a more customer-centered approach can be integrated.
Big Data
Big data is extremely large collection of data that can be analyzed for patterns and trends. The data set is so large and complex that traditional data processing methods may have difficulty handling it. With big data come challenges like security, privacy, capture, search, storage, transfer, and others. In 2015, businesses are going to invest their IT budget in big data management. This is a great opportunity for software developers to improve existing products and create applications that track product use based on collected data. The transition to cloud computing and cloud services will also drive new updates and releases that will keep developers busy. Big data is going to be commercialized as enterprises gather more information about business processes, competitors, and customers. Companies will start to sell this data and create products based on big data. If you have disparate collections of data for every department, it is time to develop a comprehensive view of information related to your product or service and for all business processes. Those who want to commercialize existing data must obtain consent from consumers. You can choose to develop the platform in-house or work with a third party to create the application.
Refined QA and Testing
About a fourth of the IT budget is spent on quality assurance and testing, and many companies plan to increase the percentage. With so many options in the market today, customers can easily switch to another application if yours is slow, buggy, or difficult to use. Sophisticated QA and testing is necessary to ensure that your applications not only perform as advertised, but also exceed expectations. How do you to test in a fast-paced environment where development and releases never stop? Agile testing is the answer. This method requires big changes to traditional processes. You may need to increase automated testing and change organizational structures. Firms who lack experience in sophisticated testing can partner with a third party that has a background in product development.
Open Source Development
In 2014, established companies started embracing open source development, adopting big data open source platform Hadoop for example. Open source has also been making waves in software development, and this will continue in 2015. During a time when speed to market is more critical than ever, developers who can recycle open source code and components have the edge. Open source development often means lower costs, but companies are now using it for strategic benefits like improved quality, speed, and agility as well. Many developers are also attracted to working in an open source community, allowing you to hire the best people for your project. Start examining the pros and cons of integrating open source code in your software development initiatives. To ensure quality, make sure to work with popular open source code monitored by an active community.
Software Development Outsourcing in the Philippines
It can be difficult to design software and applications that wow your customers if you have little experience with big data management, design thinking, open source environment, and refined QA and testing. You can recruit people and build your own in-house team, but this can be very expensive and time consuming. Consider outsourcing part or all of your development needs to experienced Philippine providers. The Philippines is one of the world’s premier outsourcing destinations, and its IT professionals are skilled, highly-motivated, and communicate excellently in English. IT services and infrastructure are customized to each business; you can hire one partner or build an entire team of developers for a short-term or ongoing project—and at the lowest industry prices. IT outsourcing companies in the Philippines make it so easy to get started with a no-risk consultation. There is never any obligation until you find the perfect match for your needs. For more information, here’s a great resource on Software Development outsourcing.
Is Outsourcing Right for your Business?
The list of questions on Should you Outsource may help you in the decision-making process. Or contact Sourcefit, an outsourcing company in the Philippines. Click here for a free, no-risk consultation with a member of our upper management team who can help you assess the opportunities and possibilities. Share This: ]]>
<![CDATA[ Back Office Outsourcing: Industry Trends in 2015 ]]> Sourcefit Philippines, Outsourcing Blogs: Back Office Outsourcing: Industry Trends in 2015Back office services are a key component of any successful business. Back office refers to administrative and support functions that include accounting, record maintenance, clearances, contracts, and human resources. Back office services are just as important to the bottom line and customer satisfaction as the prominent front office sales and production component. 2014 has been an incredible year for technology, and trend watchers expect advances in IT to continue to define the modern workplace and impact strategic business decisions.Product development, sales and marketing, back office functions and virtually all business processes will be increasingly centered on the consumer and will be underpinned by: • Domination of smartphones, tablets and supercomputers • Cloud-based services • Cloud-based storage • Integration of e-commerce and brick and mortar stores Third party providers and back office outsourcing will continue to be relevant for companies looking to cut costs, increase profitability, and reduce risk. Back office providers, especially in emerging markets, are under intense pressure to expand their offerings and innovate. This means more options for businesses who want high-quality, reasonably priced staff and services. It takes time for new technology to be adopted by the wider public, so the impact of these advances will be gradual. Any change will mean trade-offs. For business decision-makers, the key is to change not for the sake of being an early adopter, but to add value, make your customers happy, and improve profitability.
Cloud Accounting predicts that 2015 will be the year the “cloud bursts.” The case for enterprise cloud was made in 2014, and businesses will increasingly adopt cloud-based services in 2015 due to faster innovation, better flexibility, mobile access, cross-product integration, and wider connectivity. Should you decide to transition a part or all services to the cloud and replace legacy systems, your staff will need new software and skills. For businesses that do not have the budget or inclination to build their own in-house team, a back office service worth considering is cloud accounting. Cloud accounting became a $1.7 billion industry in 2014, and it is expected to grow to $2.16 billion by 2016. Cloud accounting is an excellent and cost-effective way to update legacy systems and integrate current software with more accessible and innovative systems. Other benefits of cloud accounting include a real-time view of finances, automation of manual tasks like invoicing, lower infrastructure expenses, increased security, and easier collaboration.
Document and Data Processing
Enterprise resource planning (ERP) software is a suite of applications intended to collect, store, manage and interpret data. In 2015, start-ups, medium-sized businesses, and large corporations will increasingly adopt mature enterprise resource planning software with improved SaaS security and privacy, in addition to on-premise and hybrid platforms. More documents and multimedia will reside in the cloud, with security features that allow staff and consumers to view, print and annotate documents without making unnecessary copies. The goal is to end endless email collaboration and the use of attachments that may pose a security risk. Cloud-based services can also provide editing capabilities, integrated messaging, and detailed analytics on usage of valuable documents. Many third party providers are now offering scalable data management solutions for companies who are unable or unwilling to invest in private software. 2015 is a great opportunity for providers to refine existing software even more and create better custom solutions. Productivity suites in the cloud are here to stay and technology that can crunch big data is going to be sought after in 2015. Big data solutions that allow companies to access insights into business processes affordably and quickly will be big as well. Companies that need the most up-to-date tools are going to transition faster from on-premise to cloud.
HR Support and Personal Assistants
HR support trend watchers predict that companies will step-up their recruitment and retention initiatives as the economy continues to improve and vacancy rates increase. Workforce intelligence is seen to be the key to better workforce management. Workforce intelligence is a concept that uses research, evidence, and analysis for strategic workforce planning. In 2015, organizations will leverage workforce intelligence to identify top performers, determine how compensation and other factors improve retention, and identify networks that produce the most top performers. From simply hiring to meet demand, HR will focus on more proactive workforce planning. Companies who want to stay on top of recruitment and make the most out of their existing staff can partner with workforce planning consultants or staffing providers offshore. An experienced third party that can manage short-term and long-term staffing needs is even more crucial in the face of new legislation like the Affordable Care Act. Siri, Alexa, and “intelligent” virtual assistants are going to be more sophisticated, but the day they replace human assistants still belongs in the future. Virtual assistants will continue to attract stressed out managers and business owners in 2015. VAs who can communicate excellently in English and multiple languages, easily adapt to mobile technology and cloud services, and charge reasonable prices for their services are going to be in demand.
Back Office Outsourcing in the Philippines
Business process outsourcing is as constant as innovation in 2015. Businesses will continue to leverage outsourcing to increase productivity, reduce risk and improve profitability while cutting costs. Companies will continue to tap emerging markets like the Philippines for low-cost, high-quality staffing and back office services. The Philippines remains one of the world’s top outsourcing destinations, and the percentage of its employable workforce is growing to meet global demand. Expect to see more varied, high-value offerings from many providers, even those whose traditional strength lies in call center support. Learn more about back office outsourcing in the Philippines by reading this popular post -- Why the Philippines Remains a Top Global Back Office Services Provider & BPO Destination.
Is Outsourcing Right for your Business?
Should you Outsource has a list of questions that may help in the decision-making process. Or contact Philippine outsourcing company Sourcefit for a free, no-risk consultation with an expert. We’ll help you determine the opportunities and possibilities. Share This: ]]>
<![CDATA[ How to Increase Productivity with Offshore Outsourcing ]]> Sourcefit Philippines, Outsourcing Blogs: How to Increase Productivity with Offshore OutsourcingProductivity is the ratio of output to input. Given the same amount of resources, company A is considered to be more productive than company B if company A creates more products or services than company B. According to the U.S. Bureau of Labor Statistics, outsourcing services or production to local providers can change the distribution of production. Offshoring can also affect business sector productivity if offshore workers are more productive than local workers, or vice versa. Most companies outsource because they save big money on labor, overhead and related costs. Other benefits of outsourcing are improved quality and productivity. You get better quality when you partner with a company with extensive experience in a particular area. You also gain access to the latest technology and efficient processes offered by outside experts. But how does outsourcing increase company productivity? When you outsource to a competent and skilled professional or third party, it’s like cloning your in-house team. You double your resources (particularly if you outsource to an overseas provider) for way less than if you hire full-time workers, and you free up time to focus on what you do best.
Why You Shouldn’t Do Everything
Some entrepreneurs and small business owners feel a loss of control when they are not managing every aspect of their business. But if you are spending precious time trying to perform every single task, you risk being underproductive. Remember that productivity is doing more with less, not simply “doing more.” For example, if your hourly rate as an app developer is $90 per hour, and you spend five hours a week on paperwork and payroll, you are an overpaid clerical worker. If you outsource these necessary but grueling tasks to someone who charges $60 for the whole thing, you save $120 a month! Besides the savings, you can increase profit by making new apps instead of working on non-revenue generating activities. And because of the lower rates, you can hire large number of people, multiplying productivity even further. Outsourcing is much more than a cost-cutting tool; it is increasingly seen as a strategic tool. By outsourcing certain activities, you minimize risk. When problems arise, the third party provider share accountability with you. You don’t need to invest in expensive equipment, infrastructure, technology, office space and maintenance; the provider takes care of these. If you’re stressed out from trying to juggle multiple things at once, and it’s taking a toll on your productivity, consider outsourcing. To find out if outsourcing is right for your company, identify your strengths and weaknesses, and tasks that you don’t enjoy doing. The key is to determine whether a non-core task could be performed by a third party at a lower rate, more quickly and efficiently.
Offshoring and Improving Productivity in Key Areas
Can’t decide which tasks to outsource? Ask yourself why you went into business in the first place or your mission as a company. Then list activities that you need to do but don’t generate revenue. This can be answering emails, website design, updating social media, making presentations and reports, HR, payroll and IT support and maintenance. Tasks that you hate doing can be outsourced as well. When you and your staff enjoy the work and you are fully immersed in it, you are more productive. Here are some key tasks that can be outsourced to improve productivity: Payroll Payroll is one of the most obvious tasks to outsource. It is far too labor-intensive and grueling, and requires specialized skills. Even if you enjoy tracking attendance and doing taxes, your time could be better spent on growing your company. Outsourcing payroll could also improve employment regulation compliance and minimize HR issues. Human Resources Like payroll, HR is not something most companies can claim as a core competency. Instead of hiring full time staff and building an HR team (very expensive), partner with an experienced HR and recruitment company that serve businesses in your industry. Outsourcing HR processes increases productivity by speeding up the recruitment process. The sooner you fill an open position, the more productive your company will be. Information Technology Information technology services range from infrastructure to management to support. Instead of overseeing IT process, partner with an experienced IT provider to keep your in-house staff focused on the essentials. Outsourcing IT also boosts productivity and efficiency by giving you access to the latest software, hardware and processes without worrying about upgrades and maintenance. Healthcare The healthcare sector is in for a big change with the upcoming ICD-10 implementation. Many businesses are investing in healthcare IT outsourcing for a smoother transition from the old system to the new. Consider outsourcing IT and healthcare services to better prepare for ICD-10 and help you focus on your core business. Design and Creative Services You could probably learn to design your company logo, letterhead, promo materials and website, but it would take much longer and the final look may not be as polished as a professional’s work. Outsourcing to website and graphic designers will save you both time and money. Social Media We all enjoy connecting with our customers or fans via social media channels like company blogs, Facebook and Twitter. But updating and targeting content and converting followers into customers can be time-consuming. Outsource social media management, content creation and related tasks so you can do what you do best.
Boost Productivity by Outsourcing to the Philippines
Few locations in the world have the right mix of cultural compatibility with the West, a growing labor force that communicates in English excellently, and the lowest prices in the industry than the Philippines. It is second only to India as a global outsourcing hub, and both small businesses and large corporations have established operations in the country to improve productivity and cut costs. Philippine IT-BPO companies make it easy for clients to get started with minimal risk. You have maximum flexibility when it comes to pricing, the number of people you want to hire and the kind of services that you want to outsource. Partner with a company that offers custom solutions to make sure you are meeting your objectives.
Is Outsourcing Right for your Business?
Getting Started is Easy and Risk-Free is a step by step guide that can help you learn more and get started on the outsourcing process. Or you can have a free, no-risk consultation with an expert . At Sourcefit, we’ll help you explore the possibilities and opportunities. Share This: ]]>
<![CDATA[ IT Outsourcing (ITO) & IT Outsourcing to the Philippines ]]> Sourcefit Outsourcing Blogs: IT Outsourcing (ITO) & IT Outsourcing to the PhilippinesBPO (business process outsourcing) has evolved to include information technology services previously deemed too technical to be farmed out. Today, emerging markets like India, China and the Philippines are offering everything from IT management to software programming to match the needs of global companies that range from startups to conglomerates.
What is IT Outsourcing?
Information technology outsourcing (ITO) refers to the practice of companies subcontracting information technology services, usually to third party providers in developing economies where labor costs are low. BPO and ITO go hand in hand; ITO enables BPO. As BPO firms improve their tech capability, they enable clients to move quickly and scale up and down. Companies use ITO for a multitude of functions, including software development, programming, infrastructure, IT maintenance and IT support. Many organizations use ITO to cut costs significantly. Studies show that ITO can slash your business costs by more than half annually. How does it work? For example, company ABC in the U.S. chooses to outsource software programming because it is significantly cheaper to hire a programmer in the Philippines than to hire, train, and support a local programmer. Company DEF, on the other hand, farms out IT management services to a third party because it takes too much trouble to buy, run and maintain its own data storage devices. Some companies prefer to establish dedicated IT headquarters outside the organization, but most outsource only a portion of their IT functions. A growing trend in ITO is called “hybrid offshoring,” a business model that features insourced and outsourced services. For companies looking to outsource their IT services to the Philippines, it’s great to have a game plan. Identify your strength and weaknesses, and evaluate which IT functions are better performed by an ITO provider than by your in-house department.
The Benefits of IT Outsourcing
The biggest reward of IT outsourcing is monetary for most business owners, but the benefits go beyond the bottom line. Back in 2000, Outsourcing Institute's Outsourcing Index listed several reasons you should offshore, and these reasons are equally relevant to ITO. 1. Cut and manage costs. When you outsource IT services or any function, you save money on hiring and recruitment, training, oversight, health insurance, retirement plans, taxes, infrastructure, overhead and other associated expenses. 2. Reduce risk. Companies have to keep up with technology to remain competitive. This can be expensive and labor intensive. Outsourcing to an experienced IT provider who knows what works and what doesn’t reduces your risk of making a costly mistake. 3. Access to specialized skills. No IT professional is an island. When you outsource an IT function, you are outsourcing to a team of skilled professionals, and you gain access to a collective pool of capabilities and experience. ITO to the Philippines also means that you gain IT professionals that possess the required training and certification. 4. Better workforce management. You hire local professionals to fill a need. IT outsourcing allows you keep your in-house employees doing what they do best instead of doing tasks they were not trained for. Other companies need IT professionals but don’t have the budget to hire a full-time employee. ITO lets you fill the need for the short and long term. 5. Handling difficult functions. An obvious benefit of ITO is letting experts handle an IT function or component of your business that is out of whack. You will still be involved once control is restored, but you can draw on resources from the right people. 6. Control management shakeup. Are you in the middle of a restructure to improve service and cut costs? You may notice that you don’t have the energy or time to devote to your non-core services. ITO is the perfect way to keep up with your non-core functions while reorganizing your company. 7. Increase focus. Excellent performance depends on people doing what they do best. It’s impractical and stressful to expect yourself to master every competency. ITO lets you focus on your core competencies while providers focus on theirs. 8. Reinvest funds. The money you save by outsourcing your IT functions can be reinvested into improving your service or product.
Why Outsource IT Functions to the Philippines?
While India remains the biggest player in ITO, the Philippines is fast becoming the alternative destination. According to data released by the Department of Science and Technology (DOST), the Philippines has the third largest IT talent pool in Asia Pacific, and the country’s ITO costs are among the lowest in the world. Industry powerhouse. Tholons’ listed Metro Manila as the no. 2 outsourcing destination in the world for good reason. PH is an “industry powerhouse,” with one of the most sophisticated and established offshoring and BPO industry in the world. The country was part of the first outsourcing wave before 2000, and the BPO and IT sectors show no signs of slowing down. Lowest ITO costs. Companies that outsource IT functions to the Philippines enjoy up to 70 percent lower costs than companies that forgo outsourcing, according to advisory and research firm Everest Group. More locations. ITO is expanding beyond the central business districts. Today, international companies are setting up HQ in Philippine cities like Cebu, Davao, Iloilo, and Sta. Rosa Laguna, which all made it to the Tholons top 100 list. Rich talent pool. The Philippines’ qualified talent pool is one of the deepest, with the BPO sector employing about 1 million people as of 2014. It has never been easier for international companies to connect with and leverage the expertise of the country’s talented programmers, software developers, designers, and IT administrators. Excellent cultural compatibility. One of the biggest advantages of outsourcing your IT functions to the Philippines is the country’s high cultural compatibility with the West. Majority of the country’s labor force is highly proficient in American English, and Filipinos enjoy strong historical ties with the U.S. To learn more about IT Outsourcing please read IT Support: System / Network Admin Outsourcing.
Is Outsourcing Right for your Business?
We can help you get a better idea of the opportunities and possibilities. Contact Sourcefit to get a free, no-risk consultation with an expert. Share This: ]]>
<![CDATA[ Why NOW is the Best Time to Offshore to the Philippines ]]> Sourcefit Outsourcing Blogs: Why NOW is the Best Time to Offshore to the Philippines Outsourcing is an ever-evolving sector, and the new wave is automation. Companies have progressed beyond establishing HQs in developing economies and hiring providers for non-core services. The current landscape is one dominated by machines—and clients. Does automation and near-shoring render outsourcing to countries like the Philippines irrelevant? Far from it. Robots are the future, but the newness and a lack of industry regulation mean that companies will take their time to adopt the technology. Besides, robots can never replace tasks that require complex human judgment. The challenge for the Philippines is to continue evolving to remain globally competitive. And the country is doing exactly that. From a solid call center background, it is moving toward higher value propositions like KPO, insurance, finance, accounting and other niche services. If you are an investor, NOW is the best time to offshore to the Philippines. Why? Three reasons: 1. No. 2 Outsourcing Destination in the World Manila is second only to Bangalore, India as the world’s top outsourcing destination, according to the latest Top 100 list by Tholons, the global investment advisory organization. Besides Metro Manila, the so-called “Next Wave” Philippine cities also joined the top 100: Cebu(8th), Davao (69th), Sta. Rosa, Laguna (82th), Bacolod (93th), Iloilo (95th) and Baguio (99th). Thanks to the joint efforts by local and national governments and the IT and Business Process Association of the Philippines (IBPAP), there are no signs that the country’s BPO sector is slowing down. Manila remains strong as a Contact Support provider, but it is expanding into higher value-added offerings like Finance and Accounting (FAO), Information Technology Outsourcing (ITO), and other Knowledge Processes Outsourcing (KPO) services. 2. 1-Million Strong Workforce The Philippines is noted for its rich and deep labor force, composed of highly-motivated, college-educated, and English-speaking professionals. Now the BPO workforce has become even richer, employing about 1 million people in 2014. This is almost a tenfold improvement from the 100k-odd figure back in 2004. The BPO industry is one of the major growth drivers of the Philippine economy, providing well-paying jobs for both direct employees and support positions. Businesses tap into an extensive pool of talent at a fraction of the cost of hiring, training, and supporting local professionals. The move into KPO services also means that investors can now hire highly qualified people with specialized skill sets while keeping costs at a minimum. 3. Lowest Rent in Asia India and China remain premiere outsourcing destinations, but their steady economic growth is accompanied by high rental rates in the central business districts. As a result, more and more multinational companies are moving from leasing to buying office space in regions like the Philippines. Rental rates in the Philippines remain the lowest in Asia at $29 per square feet per year. Global real estate consultancy firm Cushman & Wakefield reported that while India or China is the present, the Philippines may be the future. While the country’s economic route is still emerging compared to India, the Philippines is a gold mine of opportunities for international giants. The most benefit comes from investing “sooner rather than later.” To learn more about the Philippines as an outsourcing destination in 2014, please read our blog Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year.
Is Outsourcing Right for your Business?
Is Outsourcing for You? is a list of questions to help you decide if offshoring in the Philippines is a good fit for your business. Or contact Sourcefit for a free, no-risk consultation with an expert. Share This: ]]>
<![CDATA[ Why the Philippines Remains a Top Global Back Office Services Provider & BPO Destination ]]> Sourcefit Outsourcing Blog: Why the Philippines Remains a Top Global Back Office Services Provider & BPO DestinationThe Philippines is one of the world’s top destinations for business process outsourcing (BPO), IT (information technology), voice and back office services, according to the latest Global Service Location Index survey by consultants A.T. Kearny. A.T. Kearney pegged the country at the seventh spot, climbing two spots from number 9 in the 2011 survey. Out of 51 countries, the Philippines shared the top 10 with India, China, Malaysia, Mexico, Indonesia, Thailand, Brazil, Bulgaria, and Egypt. A.T. Kearney used 25 metrics to evaluate the attractiveness of a destination to potentially deliver IT, BPO and voice services. The metrics were based on responses to industry questionnaires, surveys, client experience reports, and data obtained from client engagements over the past five years. The metrics were grouped into three major categories: Financial Attractiveness (40%), People Skills and Availability (30%), and Business Environment (30%). The Philippines’ overall ranking rose from 5.65 in 2011 to 5.75 in 2014. The new ranking is the result of improvement in two key measures: business environment and people skills and availability. While the country dropped a few points in the financial availability measure, the other two metrics were enough to improve the overall score.
Outsourcing Industry Powerhouse
The Philippines has long been a premiere offshoring destination, but this ranking improvement highlights the attractiveness of the country not only for BPO and voice services, but also for back office functions like data processing and management, virtual assistance, HR support and accounting. Back office support is a mix of low-scale and high value offerings that can be bundled together to give clients maximum flexibility. A.T. Kearney dubbed the Philippines an “industry powerhouse”, with an export sector second only to the number one destination, India. Other factors that contributed to the new improved ranking include: • One of the world’s most sophisticated BPO industry • Highly-qualified and rich labor force • Expansion to higher value-added IT and BPO services • Numerous operating centers not only in Manila but across the country • Steady economic growth
Philippines vs. India
India remains the top offshoring destination in the world. The country is a leader in both skills and scale, providing virtually all offshoring functions: IT, BPO and voice. According to the National Association of Software and Service Companies (NASSCOM), that industry alone is responsible for 25% of India’s total exports, with IT services raking in $40 billion in exports. India continues its expansion into new services, including research and development (R&D), product development, and niche functions like healthcare and telecoms that require specialized skills. However, as India’s high-value offerings become more expensive and as rents skyrocket in the central business districts, more and more companies seek lower cost destinations. While not close to matching the sheer scale that India offers, the Philippines remains a top player in offshoring. The country is extremely attractive to small and mid-sized businesses looking for low risk and maximum savings. The environment is politically stable, the workforce communicates in English with excellent proficiency, and the skilled professionals possess industry-specific knowledge. The Philippines also continues to expand its service offerings and target niche markets.
Global Services Development Markers: Late 1990s - mid-2010s
A.T. Kearney’s 2014 survey tracked the evolution of back office services, from when companies first cut their teeth outsourcing to emerging markets to the current automation trend. This dramatic development spans two decades and shows how businesses adapt to technology and refine ways to make their presence felt in a global economy. From the beginning, it has always made sense to offshore non-core functions. It allowed companies to access rich talent pools around the world, usually at a significantly reduced cost, and gain greater exposure. For several businesses, offshoring was the stepping stone to taking their company global. The A.T. Kearney survey identified three “waves” of sequential development that occur simultaneously today. Before 2000. India was the pioneer market for offshoring, taking off in the late 1990s. The internet was young, telecommunications were much improved, and many companies required large-scale IT services. The first companies to set up centers in developing countries often built the HQs from scratch. Despite the lure of monumental savings, the operation back then was very complicated, involved, and expensive. Mid-2000s. The second wave found companies passing on non-core services to third party providers. The operation was more efficient, and the companies more selective. Some brought back key roles in-house. Mid-2010s. Automation is the name of the game, where robots perform routine tasks. ERP (enterprise resource planning) software automates repetitive, high-volume tasks for entire categories of services.
The Future of Offshoring
Businesses and entire countries are continually being transformed by the offshoring revolution. Small and mid-size businesses now join global conglomerates that take advantage of the reduced-cost BPO and back office services in countries like India and China. But as these countries deliver more high value propositions, countries like the Philippines are becoming much more enticing to companies looking to free up resources, concentrate on core functions and set up operations overseas. Despite the automation trend, there is still plenty of room for growth. Robots can never replace tasks that require human flexibility and complex judgment. The challenge for the Philippines and other outsourcing destinations is to adapt fast enough to technology and keep evolving to avoid irrelevance.
Is Outsourcing Right for your Business?
Getting Started is Easy and Risk-Free is a guide that can help you find out if outsourcing is a good fit for your business. Or you can have a free, no-risk consultation with an expert A member of our upper management will help you explore the possibilities and opportunities. Share This: ]]>
<![CDATA[ Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year ]]> Sourcefit Outsourcing Blog: Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year Metro Manila beat Mumbai, India in this year’s list of Top 100 Outsourcing Destinations! That impressive ranking from Tholons, a global business process outsourcing (BPO) research and investment advisory firm, shows the astounding growth of the Philippine BPO industry. The Philippine metropolitan region is now second only to Bangalore, India, which remains at the top of the list.
Tholons Ranking: Top 100 Outsourcing Destinations
Metro Manila begins the year at notch higher than its 2013 Tholons ranking and that’s further proof of consistent growth. In 2012, Metro Manila was in fourth place, behind Indian cities Bangalore, Mumbai and Delhi. The following year, the Philippine outsourcing destination was able to overtake Delhi to win third place. This year, Metro Manila bests Mumbai thanks to the Philippine region’s growth rate which has “remained consistent with previous years,” according to Tholons. The research firm further noted that even as contact support services continue to “characterize” the identity of the Philippines as an outsourcing location, there is a “notable increase” in non-voice services. Expansion into non-voice services, industry analysts say, points to the growth and maturation of an outsourcing destination. The list, a Tholons flagship project and recognized ranking for BPO destinations in the world, also includes six other outsourcing locations in the Philippines – Cebu, Davao, Sta. Rosa (Laguna), Bacolod, Iloilo, and Baguio.
Q1 2014 and Beyond for Philippine BPO
For 2014, the Oxford Business Group (OBG) reported a projected growth of 15% in revenues for the Philippines’ BPO sector. OBG cited the Philippine cities that made it to the 2014 Tholons list as significant contributors to the Philippine economy, “one of the country’s main sources of hard cash.” OBG also pointed to Bangko Sentral ng Pilipinas (BSP) data that show Philippine IT-BPO (Information Technology- Business Process Outsourcing) firms generating significantly larger revenues. In 2013, outsourcing firms in the country posted $13.3 billion export earnings, a 15% increase from the previous year’s total. This figure tops the $4.8 billion receipts from the tourism industry. Remittances from foreign workers, a total of $22.5 billion for 2013, remain the biggest source of foreign exchange in the Philippines In a separate report published in, the country’s central bank estimated $15.3 billion in total revenues for Philippine IT-BPO this year. Last year’s total revenues also saw a 15 % growth, jumping from $11.6 billion in 2012 to $13.34 billion. It’s exactly this growth and strength of the Philippine IT-BPO industry that was cited by international ratings agency Standard & Poor’s (S&P) among the factors that helped the country maintain its “stable outlook forecast and its BB foreign currency long-term bond rating.” In the same report from OBG, S&P credit analyst Agost Benard explained that IT-BPO revenues and earnings from foreign remittances are driving “current account surpluses” and offsetting the effects of weak fiscal profile and prevailing debts.
Philippine Outsourcing: Moving Up the Value Chain
These figures underscore the strength of outsourcing as a business strategy and of the Philippines as an outsourcing location. The main impetus is, still, to reduce overhead costs. As companies expand, ramp up or explore other areas of growth, they need to: 1. Get the talent they need to remain competitive. 2. Find ways to keep overall costs low. At the same time, the goal, particularly in this more competitive business environment, is to gain more value. BPO voice service companies that expand to the Philippines, for example, want to gain not only talented staff – in most cases, expanding to hire thousands of employees – for their workforce; but also more cost-effective operations and add language capabilities to be delivered to specific countries or regions. Growth in voice services often also expands to non-voice, with companies looking to add more value and other sources of revenues by also providing email or chat support and other non-voice services. Non-voice is expected to expand further as the outsourcing industry in the Philippines matures into providing a wider range of services. Tholons noted a considerable increase in Finance and Accounting Outsourced (FAO) services and other high value processes in Information Technology Outsourcing (ITO) and Knowledge Processes Outsourcing (KPO), along with the country’s continued success in the voice services subsector. This expansion to services such as back office transactions of financial and non-financial sectors, animation and transcription is seen to continue helping increase revenues and propelling the growth of the industry. Worldwide, the demand for non-voice talent continues to increase. In his paper “Transforming the Philippine Talent Value Proposition into an Enduring Competitive Advantage” Alejandro Melchor III, Deputy Executive Director at the ICT Office at Department of Science and Technology pointed to an Information Scientists New McKinsey Global Institute Report that shows that the “United States alone faces a shortage of 140,000 to 190,000 people with analytical and managerial expertise and 1.5 million managers and analysts with the skills to understand and make decisions based on the study of big data.” And highly-skilled and qualified IT-BPO employees in the Philippines can fill these, as well as other employment opportunities.
Human Capital & Government Support for PH IT-BPO
Aside from expanding further into non-voice services, the other keys to sustained growth in the Philippine IT-BPO industry are human capital and government support. Hiring outsourced employees in the Philippines allows for flexible staffing options and and the ability to hire quality employees at a fraction of the cost of hiring locally. Human capital has always been one of the biggest resources of Philippine IT-BPO. The talent base is composed of English-speaking and English-educated people, mostly city-based and technically-proficient. The literacy rate in the country is one of the highest among the IT-BPO hubs in the world. Filipino BPO employees are also known for their domain expertise, cultural adaptability, exceptional work ethic and service orientation. Government support and a business-friendly environment, which have helped push the Philippine IT-BPO industry to the top of the global outsourcing rankings, are also likely to drive sustained growth. World-class and cost-effective infrastructure includes telecom, connectivity, network, office space and transportation. The Philippine government has also supported state technical training for IT-BPO jobs and provided a business-friendly environment. The article “The Philippines: Better Business Process Outsourcing” on the Information Technology and Business Process Association of the Philippines (IBPAP) website reports that the current administration announced further strengthening of the favorable environment by reducing bureaucratic procedures and granting tax holidays to BPO-related investments. In the IBPAP article “Manila overtakes Mumbai as world’s No. 2 outsourcing destination,” Department of Science and Technology (DOST) Undersecretary Louis Casambre attributed the improved Tholons rankings to the Next Wave CitiesTM program of the DOST-ICTO and IBPAP, a project established in 2007 to develop globally preferred IT-BPO destinations and the “development of required ecosystem to prop up Information Technology and Business Process Management.” As more and more companies across the globe recognize the continued strategic value of outsourcing to cut costs, develop process equity, increase productivity and business efficiency, and make product and service innovation possible; global outsourcing will remain a formidable industry. In the Philippine BPO industry, the target for 2016 according to IBPAP is $26 billion in revenues and 1.3 million jobs. And, of course, higher rankings and more Philippine cities in the Tholons top 100 list.

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<![CDATA[ Politics, Economics, and Hot Buttons: G8 Countries and Outsourcing ]]> Sourcefit Philippines, Offshoring Blog: Politics, Economics, and Hot Buttons: G8 Countries and Outsourcing“The topic of offshore outsourcing is as much a political topic as an economic one, and perhaps even more so.” - N. Gregory Mankiw and Phillip Swagel You know it’s presidential election time in the United States when outsourcing becomes a hot topic for political debate. This time, it’s U.S. President Barack Obama versus the Republican candidate Mitt Romney. CBS News puts the exchange of words this way: “A simmering campaign feud over outsourcing has boiled over, with the president's campaign and Mitt Romney's accusing each other of lying about Romney's record at the helm of Bain capital.” The feud revolves around Obama’s assertion that Romney had leadership experience in "companies that were pioneers of outsourcing.” The Romney camp, on the other hand, insists that the claim is a “distortion” and that there is no evidence that Romney, when he was at the helm of Bain Capital, was responsible for sending jobs outside the U.S. In short, favoring outsourcing – or even just seeming to favor outsourcing – during election time is bad for your political health.
Outsourcing Goes into Mainstream Consciousness
When politicians bring up the topic of outsourcing to the public and thrust it into mainstream consciousness, it becomes more than economic topic – as N. Gregory Mankiw and Phillip Swagel, who co-wrote the Harvard University DASH (Digital Access to Scholarship at Harvard) paper titled “The Politics and Economics of Offshore Outsourcing,” said – but also, a political topic; and a compelling one at that. Harvard Economics professor Mankiw knows this first hand from his experience as the chairman of the national Council of Economic Advisers (CEA) under the George W. Bush administration. He once wrote in the CEA Economic Report of the President in 2004 that outsourcing of jobs by companies in the U.S. is “probably a plus for the economy in the long run.” These sentiments about outsourcing quickly became the focal point of a political uproar in 2004 -- also a presidential election year -- which saw politicians claiming a link between offshore outsourcing and the sluggish recovery of the American labor market in the first few months of 2004. When you think about it, any aspect of a country’s economy can easily become a political hot button – considering that these are issues that typically boil down to whether or not you can put food on the table. But why and how would a topic such as outsourcing create a political uproar in an advanced economy like the U.S.? What is the real public sentiment on outsourcing in advanced economies like the US and other G8 countries such as Canada, France, Germany, Italy, Japan, Russia, and the United Kingdom? What are the misconceptions, fears, and other conditions that shape public opinion on outsourcing in advanced or mature economies? Is public sentiment far from the reality? Could outsourcing – despite the negative impression harbored by a country’s general population – be beneficial to these advanced economies? How are the governments in these countries managing this difference between public opinion and reality when it comes to outsourcing? How should they manage it?
Financial Challenges and Public Perception of Offshoring
Examining “mature,” advanced economies like the G8 can certainly give us a perspective on how globalization – which makes outsourcing possible – is changing the world. The Group of Eight (G8) most industrialized countries in the world, established in 1975, is committed to a yearly forum on key global issues. The world, of course, has changed much since the mid-1970s. At this year’s G8 Summit, financial challenges, jobs, and growth dominated the discussions. Also among the broader questions tackled during the summit, according to The Washington Post’s Howard Schneider, included “how the developed world can bolster growth when governments are constrained by high debt and have little room for stimulus spending.” France’s Francois Hollande wanted to emphasize economic growth while Italian Prime Minister Mario Monti is hoping to gain approval from the Italian parliament on far reaching labor and regulatory policy changes that are said to be aimed at boosting growth in Italy. Canada, like the rest of the mature G8 economies, faces new challenges from an evolving international community. The country, as the web site Canada’s World puts it, should find out how to “best position itself in a decentralizing, globalizing world that is hungry for resources on one hand and fiercely competitive in knowledge-based industries on the other.” Unemployment is “at record levels in the developed world,” according to Schneider, so there is an imperative “to balance growth and austerity.” Obama, in an article published in The Telegraph, also said of the recent G8 summit that there was an “emerging consensus” on investing in infrastructure that creates jobs; adding that “growth and jobs must be our top priority. A stable, growing European economy is in everybody's best interests, including America's." Amid this atmosphere of financial challenges and the need to create more jobs in G8 economies, outsourcing can become an easy target. The most common public perception is that outsourcing takes away much-needed jobs in home countries and gives them to employees overseas. Here’s an example of how this issue of sending jobs overseas so easily came into play in the 2004 US presidential election as described in the insider account by Mankiw and Swagel entitled “The Politics and Economics of Offshore Outsourcing.” After the release of Economic Report of the President (ERP), “the Presidential campaign of Senator John Kerry seized on the issue of outsourcing, lambasting President Bush and his advisers for supposedly favoring it, and put forward a corporate tax proposal allegedly aimed at removing tax incentives for U.S. firms that move jobs overseas.” “Against the backdrop of a faltering labor market, outsourcing became synonymous in the public debate with job loss, and the transfer of jobs overseas came to be seen by non-economists as a major factor in accounting for the weak job market of 2002 and 2003. The release of the Economic Report of the President in early 2004 thus came at a time when the recovery was still not viewed as robust.” Mankiw and Swagel also noted that during the entire political uproar over outsourcing in 2004, the press coverage of the issue became more about the political response or the political reaction and the subsequent fallout and not about the actual substance of what was written in the ERP about outsourcing.
Economic Reality and the Benefits of Outsourcing
That was the public perception during the heat of the 2004 U.S. presidential campaign. The economic reality was quite different. Yes, there were jobs lost, but that’s not the complete picture. Mankiw and Swagel cited a study by Martin Baily and Robert Lawrence titled “What Happened to the Great U.S. Job Machine? The Role of Trade and Electronic Offshoring” which showed the following effects of outsourcing of services on U.S. employment: * “The impact of service sector offshoring to India from 2000 to 2003 was small compared to the overall change in service sector employment.” * “Lower level programming jobs were lost to India but overall computer employment was surprisingly strong.” * Baily and Lawrence “provide evidence that services offshoring to countries such as India will raise U.S. GDP and create jobs, including in manufacturing.” * Baily and Lawrence also found that “U.S. GDP, real compensation of employees, and real profits will all be higher in 2015 as a result of lower prices for services imports associated with outsourcing.” Economists Mary Amiti and Shang-Jin Wei found in their study “Fear of Service Outsourcing: Is it Justified?” – as cited by Mankiw and Swagel – that: * “Services outsourcing is small and plays little role in recent employment fluctuations, but possibly plays a meaningful role in accounting for productivity growth.” * Data for the United Kingdom that Amiti and Wei used also showed “that sectors with more services outsourcing do not have a slower rate of job growth than sectors without outsourcing.” * Regarding manufacturing industries in the U.S. Amiti and Wei, wrote in the 2006 report “Service Offshoring and Productivity: Evidence from the United States” – as cited by Mankiw and Swagel – that services that were offshored accounted “for around 11 percent of firms’ productivity gains from 1992 to 2000, but with little impact on employment.” Srinivas Durvasula and Steven Lysonski in their study titled “How Offshore Outsourcing is Perceived: Why Do Some Consumers Feel More Threatened?” pointed out: * “Proponents of offshoring, on the other hand, assert that it benefits developed and developing countries alike (Sturgeon, W. Offshoring: It’s better for everybody.). For example, while lower-skill jobs may be lost to developing economies such as India, new jobs take their place in the developed countries. These new jobs are superior in economic value due to their higher pay and skill levels.” * “As suggested by Nigel Holloway, director of executive services at the Economist Intelligence Unit, while some individuals may have been negatively affected, overall, offshoring has brought about positive change to the workforces and economies in developed countries (Sturgeon, W. Offshoring: It’s better for everybody.)” * With “the overall U.S. employment of 130 million and the projected creation of 22 million new jobs by 2010, the job loss due to offshoring would affect only 0.2 percent of the U.S. workforce (Drezner, D. The outsourcing bogeyman.). As for job security, Mankiw and Swagel cited research by Bradford Jensen and Lori G. Kletzer (“Tradable Services: Understanding the Scope and Impact of Services Offshoring”) which showed that while job security is lower in “tradables” or jobs that are likely to be outsourced, “Jensen and Kletzer find little evidence of weaker employment growth in tradable activities or occupations than in nontradable ones. Indeed, their results are consistent with the data on U.S. services trade flows that suggest U.S. comparative advantage in the provision of services.”
Public Perception of BPO in Advanced Economies
Why, then, with so many assurances and even more research that show the benefits of outsourcing does the general public in advanced economies tend to view outsourcing negatively? Durvasula and Lysonski’s 2009 study “How Offshore Outsourcing is Perceived: Why Do Some Consumers Feel More Threatened?” offers some insights. The authors pointed to a rapidly changing and more competitive world, as discussed in The World is Flat by Thomas Friedman, with myriad technological advances particularly digitization and “the web of optical fiber lacing the planet together” further accelerating globalization. “Countries that were historically not competitive suddenly have become juggernauts in the competitive race fostered by globalization.” So what are some of these perceptions and what are the conditions that shape them? Durvasula and Lysonski cited the following research: 1. J. Klein, R. Ettenson, and M. Morris’ “The animosity model of foreign product purchase: An empirical test in the People’s Republic of China” found that “in an economic sense, people exhibit a high degree of animosity if they perceive that foreign countries take unfair advantage in their trade practices.” 2. Durvasula and Lysonski further said that “with respect to outsourcing, there is a perception in North America (e.g., United States) and Europe (e.g., Britain) that countries such as China in manufacturing and India in information technology services, because of labor arbitrage, are taking away high-paying jobs from economically developed countries.” 3. S. Cocheo’s “Global think? Or job shrink?” which was published in American Bankers Association Journal spoke of “The Lou Dobbs Effect,” which highlights “the disfavor of offshoring. Implicit in this negativity is the belief that offshoring is unpatriotic and firms that offshore are “Benedict Arnold” companies; “Hire American” has become the watchword.” 4. A McKinsey and Company study titled Panel debates offshoring found that of the respondents in a large survey, 66 % believed that “American firms have a moral responsibility to hire Americans.” 5. Consumers who feel an economic threat – feeling ”threatened by economic forces that are beyond their control” – are likely to perceive “that foreign competitors can hurt them personally and/or their domestic economy are more likely to oppose offshoring versus those who do not feel this threat.” 6. The public may clamor for protectionist moves such as the provision in the 2004 US Congress legislation, mentioned in Baily and Farrell’s Exploding myths about offshoring, “prohibits federal agencies from offshoring some types of work to private companies that employ overseas workers” What are the forces that heighten the negative impression or the opposition to outsourcing? Durvasula and Lysonski mentioned the following: * ethnocentrism * economic animosity * patriotism, * perceived economic threat The authors added that “[a]s these forces intensify, consumers were more likely to have greater opposition to offshoring. If economic threat underlies the bias against offshoring, ethnocentrism may become an even more volatile and powerful force.”
Advantages of Offshoring in a Borderless World
In the previous subheading, the words “perception,” “perceptions,” “perceive,” “perceived,” “belief” and “believed” are highlighted to emphasize the fact that these perceptions about outsourcing and are not necessarily true. In fact, as countless studies have shown – including those mentioned by Mankiw and Swagel in the earlier subheading on economic realities – that outsourcing benefits industrialized economies; in much the same way that free trade and globalization, which has hugely benefited these mature economies, continue to offer a myriad number of benefits. It’s no surprise that advanced economies are all for free trade and globalization. In fact, the statement from the G8 leaders on the global economy following the recent summit not only emphasized, among other things, “the importance of open markets and a fair, strong, rules-based trading system” but also their “commitment to refrain from protectionist measures” and “to reduce barriers to trade and investment and maintain open markets.” The statement continued, “We call on the broader international community to do likewise. Recognizing that unnecessary differences and overly burdensome regulatory standards serve as significant barriers to trade, we support efforts towards regulatory coherence and better alignment of standards to further promote trade and growth.” The UK Prime Minister, in an interview with The Telegraph following the recent G8 summit also spoke of the “expansion of trade freedoms - breaking down the barriers to world trade and getting global trade moving again.” It makes sense, really, that advanced economies are all for free trade and globalization. In the race to reach, as Durvasula and Lysonski put it, more “market opportunities for multinational corporations to reach out to consumers in a more or less borderless world”, the G8 countries have a comparative advantage. And in this borderless world, where the competition for lower operation costs, efficiency, and productivity is growing even more intense, outsourcing just makes sense.
Balancing Act: Reap the Benefits of Offshoring and Lessen the Negative Perception
So it then becomes a balancing act: finding a way to reap the benefits of outsourcing while lessening the negative reaction of the public and lessening the impact on those directly affected. “While outsourcing involves real pain to the workers and families who face displacement, the empirical evidence suggests that the hysteria over offshore outsourcing is far out of proportion to its actual impact,” Mankiw and Swagel wrote. “While trade provides benefits for the nation as a whole, some people face dislocation. For example, workers with low skills within certain occupations such as data entry and low-end computer programming appear to have been affected by increased trade in services. The appropriate policy response is to help affected workers adjust to change rather than give up the gains from trade in the first place.” Mankiw and Swagel recommend a “two-fold” solution: 1. Improving the current policies that are aimed at adjustment assistance 2. Creating an economic environment that fosters strong growth and robust job creation “Within this cover, trade can expand into the new channels created by improvements in technology and telecommunications.” The authors pointed out that “some U.S. jobs are certainly lost to other countries” but “on the whole, firms involved with offshore outsourcing are not shifting net jobs overseas but instead are creating jobs both in the United States and in other countries.” Looking back at the political uproar in 2004 during the US presidential election campaign, Mankiw acknowledged that it gained steam because, from a communication perspective, he made the tactical error of emphasizing the gains from trade before referring to the “dislocation of affected workers.” He also mentioned that some of the statements lacked clarity and could be – and were – easily misinterpreted to mean that he praised the loss of jobs or did not care for the loss of jobs in the U.S. Throughout the presidential campaign, President George W. Bush’s team countered Sen. Kerry’s attacks on outsourcing by pointing out that not engaging in free trade and outsourcing is “a retreat into economic isolationism” which could lead to economic decline. While declaring support to free trade and extolling the benefits of open markets, Pres. Bush’s team also referred to the opposing side’s “economic pessimism” and a “defeatist” mindset that seemed to view “an America that could not compete.” Mankiw and Swagel expressed no doubt that the “discontent arising from outsourcing will be an issue for politicians and economists alike for the foreseeable future.” And it’s up to the governments and policy makers to manage this balancing act. The bigger issue, one that encompasses the issues on outsourcing, takes us back to questions posed by Canada’s World; and these questions could just as easily refer to any of the G8 countries: How do mature or advanced economies face the new challenges of a “decentralizing, globalizing world”? And how do political leaders communicate these challenges to their constituents to build consensus toward effective policy making?
Is Outsourcing Right for your Business?
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<![CDATA[ PROMOTING EQUALITY, PROMOTING DEVELOPMENT: Empowerment and Opportunities for Women in BPO ]]> Sourcefit Philippines, Outsourcing Blog: PROMOTING EQUALITY, PROMOTING DEVELOPMENT: Empowerment and Opportunities for Women in BPOA recent report issued by Grant Thornton’s International Business Report (IBR) indicates that women in the Philippines hold 39% of all senior management positions, which ranks near the top of all countries worldwide. The figure represents a 4% year-on-year rise, bucking an international trend that has seen the number of women in top company leadership roles diminish over the same period in many parts of the world. The release of this data and the fact that this March marks the 101st anniversary of the establishment of International Women's Day inspire us to examine the progress women have made in the workplace.
Miles to Go
From all indications, the empowerment of women has come a long way but there are still miles to go. Avivah Wittenberg-Cox, in her Harvard Business Review (HBR) article “Why Focusing on the Gender Pay Gap Misses the Point” mentioned PEW research that showed that 26 percent of wives in the United States earn more than their husbands. A Goldman Sachs study, on the other hand, as cited by Wittenberg-Cox, found that more women are starting American businesses or companies, that the buying power of women worldwide is increasing and that more women in the U.S. are achieving higher education, earning 6 out of every 10 bachelor's and master's degrees. Despite these statistics, however, a recent study conducted by Catalyst, and cited by Boris Groysberg in the HBR piece called “How Star Women and Star Men Fare Differently in the Workplace” show that there are still too few women climbing the corporate ladder in the US. In 2011, women accounted for only 16.1% of board seats; only 14.1 percent of executive officer positions and 7.5 percent of executive officer top-earner positions. Across the Atlantic, it’s not much better either. "What the U.S. Can Learn From Europe About Gender Equality in the Workplace,” the Harvard Business Review article by Sylvia Ann Hewlett, mentioned new data from the Center for Work-Life Policy that shows that women in Britain make up only 19 percent of Parliament and only 12 percent of corporate boards.
More Women Managers in the Philippines
According to Grant Thornton’s IBR, the proportion of women in senior management positions has been steadily declining worldwide since 2009. The Philippines ratio of 39% women in top posts is second only to Russia worldwide. The report added that 64 percent of the top Filipina executives hold senior finance positions or are chief finance officers. These figures bode well because, as McKinsey Southeast Asia Head of Public Affairs Penny Burtt said, a McKinsey study shows that gender diversity impacts businesses positively. "Companies with more women at the top tend to have more leadership capabilities, better decision making and better corporate governance," Burtt told’s Shivali Nayak. The local Information Technology-Business Process Outsourcing (IT-BPO) sector seems to show proportions similar to the IBR findings. According to the International Labor Organization – as cited by Tonyo Cruz in his report for – “young Filipino women dominate BPO jobs by up to 59.3 percent.” The paper “Night Work Prohibition of Women Workers in the Philippine Call Center Industry” by Dr. Robert Keitel and Melissa Dorothy Ledesma mentioned that “a large percentage of middle to senior management positions are also held by women.”
Empowering Women
The IT-BPO sector in the Philippines, as we know, has risen to become one of the leading destinations for IT-BPO and GIC (Global In-House Centers) in the world. According to the Business Processing Association of the Philippines (BPAP), the sector grew from US$100 million in total revenues in 2001 to an astonishing USD3.3 billion in 2006; and has since doubled its revenues every year. This high rate of growth has, of course, helped provide opportunities and benefits to women employees such as: * Financial independence – The paper “Night Work Prohibition of Women Workers in the Philippine Call Center Industry” said that “workers are drawn in to work in a BPO or Call Center because of the financial security it gives and its impartiality when it comes to age, status, etc. of the individual as long as they have the necessary skills needed for the job; specifically that of computer and communication skills.” Financial independence, with salaries that are typically above minimum wage and are available to a broader spectrum of women (and men, too), has given many women employees in the BPO sector the opportunity to provide for their needs and that of their families. Their compensation has also increased their spending power and has also led to positive effects for the local retail industry. And the fact that BPO companies in the Philippines are not just in urban centers in Metro Manila, but are also in other parts of the country, means that more women in more areas in the country are getting the chance to gain financial independence. * Opportunities for advancement – For a large number of women in the BPO sector, these employment opportunities open a door to more chances for advancement, not just financially and socially, but also in terms of career and skills. The sector is built to constantly offer training to update knowledge and usually offers career advancement and promotions. The paper by Keitel and Ledesma – citing figures from the Business Processing Association Philippines. (2007). ITES & ICT Sectors, viewed 18 March 2007. Makati City -- pointed out that BPO’s place “high emphasis on people and talent development resulting in a high level of activity and investment in training and coaching at all levels; companies spend an average of Php 21,000 - Php28, 000/year per employee for training and development.” Training is a chance to update skills as it also helps employees choose and forge a career path. It has also proven helpful for women who return to work after maternity leave and the like. * Opportunity to learn new skills and technical skills – The industry, like the technologies that power it, is fast paced and continuously changing and updating. Employees get to continuously train and learn or update skills. * Chance for fresh graduates – Fresh graduates, who have been turned down for jobs that require experience, are given the chance provided that they pass the training and continue to maintain standards of quality. The emphasis on recruitment, Keitel and Ledesma said – again citing BPA/P, 2007 -- is on “competency based assessment and behavioral assessment” or the “workplace readiness and job fit” as new hires are typically given “15-20 days training prior to start of work.” * Building skills and confidence – The skills acquired from training and day-to-day operations such as communication skills, technical knowledge and product knowledge go a long way to help add confidence and assertiveness. * Accomplishing more and achieving balance – The flexibility of the work atmosphere, according to authors Keitel and Ledesma encourages most employees to accomplish more with his or her time. This helps employees achieve balance in their work and personal lives. * Indirect benefits that help make life better for more people – These include better infrastructure, government support and areas evolving into better centers with better infrastructure facilities which benefit the employees and the rest of the residents near the area. The IT-BPO sector also contributes to the growth of, as well as the creation and support of jobs in real estate, security, transportation and other industries that support BPOs. * Gaining self-reliance and a better standard of living – The paper “Night Work Prohibition of Women Workers in the Philippine Call Center Industry” mentioned the following non-monetary benefits: leaves with pay, HMO and health programs, flexible schedules, off-setting, opportunity to negotiate part time work, bedroom or sleeping quarters, health programs, career leaves and breaks, study/training scholarship and subsidy, early retirement, club membership and cultural/religious leave. These non-monetary benefits also add up to a compensation package that has the potential to improve the standard of living. For countless Filipino women, the benefits of an above average compensation such as autonomy, self-reliance, freedom and the opportunity to have a better life are priceless.
Makes Perfect Sense
Continuing to make these employment opportunities within reach for more women in the country is not only just, it also makes perfect business sense. For BPO companies to continue growing at such astonishing rates and contributing to the growth of the Philippine economy, they need to meet the demands of a growing number of clients with, first and foremost, the best talent for the job. In June of last year, a law was passed to ensure that women would be allowed to work at night for more than 11 consecutive hours. This repeals the provisions of the Labor Code that prohibited night work for women and which forced BPO firms to constantly seek exemptions from the Department of Labor and Employment to allow them to employ women for work at night. Industry players and the Labor Department welcomed the signing of the new law as a move to give women equal access to opportunities for employment. The government also continues to find measures, including looking into laws and government incentives that can offer support to expanding BPO operations, providing more access to free training and assistance in getting employment in the IT-BPO sector. The Department of Education, the Technical Education and Skills Development Authority, the Commission on Higher Education and the private sector are working together towards training and education to avoid the talent gap and meet the strong demand. In 2011, Business Processing Association of the Philippines (BPAP) executive director for external affairs Martin Crisostomo said in an interview with the Philippine Star, the BPO sector hit $10.9 billion in revenues. For 2012 – as businesses abroad aim to concentrate on their core operations and become more competitive and with increased demand in the non-voice and voice subsectors of the Philippines’ BPO industry – the projected revenue of the local IT-BPO sector is $13 billion. The economic empowerment of women is, by all means, part of the big picture. As the Asian Development Bank (ADB) report titled “Paradox and Promise in the Philippines: A Joint Country Gender Assessment 2008” pointed out, “Enhancing women’s economic empowerment is, therefore, not only a question of promoting equality, but also of supporting the socioeconomic development of the country.” POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World
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<![CDATA[ 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World ]]> Digital Millennium Copyright Act (DMCA) – but that they also pose security risks to the Internet; stunt innovation; cause the erosion of due process; threaten free speech; and block the free flow of information, jeopardizing the very fundamentals of the Internet itself. The New York Times’ Rebecca MacKinnon, in her article “Stop the Great Firewall of America,” has described the bills and their effects as heading the way of China’s system of Internet censorship. “The intention is not the same as China’s Great Firewall, a nationwide system of Web censorship,” MacKinnon said. “But the practical effect could be similar.” Exactly how far-reaching are these proposed bills? And how will they affect Internet-based or Internet-dependent jobs and companies outside the United States? What are their impacts on the SEO, Internet Marketing and BPO industries in countries like the Philippines, which rely heavily on several US-based websites?
1. SOPA and PIPA would profoundly affect how the Internet is used. And I mean all of it. And it doesn’t matter where in the world you live or where your site is hosted. As the blog entry “SOPA/PIPA Blackout” on The Guardian said, these restrictive bills would affect how you use the Internet if you use blogs, if you use Wikipedia, if you use social media sites and if you use search engines. Think about it. These laws can block sites, de-list entire websites and affect search engines -- that’s changing the face of the Internet right there. 2. The bills endanger the security of the Internet. Union Square Ventures’ Brad Burnham, along with 53 fellow venture capitalists, sent a letter to lawmakers stating that the laws “requiring access to sites to be blocked by Domain Name System (DNS) providers endanger the security and integrity of the Internet.” Julie Ahrens, on her blog entry for the Stanford Law School website also said that “SOPA breaks the Internet’s infrastructure.” “By tampering with the Domain Name System (DNS), SOPA breaks Internet security and encourages the development of an insecure, offshore pirate DNS.” As we know, a less secure Internet is bad for any Internet-dependent business. 3. If U.S. web users are the target audience of your Internet-based business, you will be in for a long, tough ride given all the severe restrictions. 4. The bills will affect the big tech companies. And, because the Internet is an ecosystem of links; what affects big tech companies will have a trickle down effect on your company. As the blog entry “How will SOPA and PIPA affect your SEO strategy?” pointed out on “Because on big sites like Facebook, Twitter, Youtube (etc.) are posted daily millions of links from users, but under the bill, these sites would literally be unable to function, as the amount of copyright infringing content that gets posted would be completely beyond their control. So this will also affect smaller businesses that owe most of their popularity and recognition on the real market to these big sites!” 5. Less companies to do business with, less opportunities. SOPA and PIPA will pose heavy financial burdens and legal risks for many companies and the smaller ones and start-ups will be hit hard because, as Wikipedia also pointed out in its statement against SOPA and PIPA, these smaller sites “won’t have sufficient resources to defend themselves.” The less sites there are left to do business with and to link with, the less opportunities for Internet-based and Internet-dependent companies anywhere in the world. 6. There will be fewer US start-ups and new companies, which would mean fewer opportunities for Internet-based companies. The decrease in start-ups would come about because, as the blog entry “How SOPA will affect Internet businesses?” on explained, “Entrepreneurs would invest less, if they invest at all. In fact one study that interviewed 200 venture capitalist and angle investors revealed that nearly all would stop funding digital media intermediaries if SOPA became law…Entrepreneurs may be afraid that they would spend more on lawyers and litigation than they would on hiring and innovation.” Ahrens, in her Stanford Law School website blog entry entitled “Stop Censorship: The Problems with SOPA,” stressed that SOPA kills innovation. “By vastly increasing the risks associated with hosting user-generated content, SOPA will make it far more difficult to start new internet companies. If SOPA had been the law, it is doubtful that Facebook or YouTube would have been able to launch.” 7. Sites can be neutralized with lawsuits and allegations of infringement. In the blog entry “The Real SOPA Battle: Innovators vs. Goliath” on the Harvard Business Review website, James Allworth and Maxwell Wessel explained how an otherwise extremely competitive website can be neutralized: “… this legislation because they're aware it will tip the finely tuned balance of creative destruction against start-ups and very much in favor of companies unwilling to embrace change. For example, Viacom has been locked in a legal fight with YouTube — so far, unsuccessfully. If SOPA were to become law, however, Viacom would be able to entirely shut down YouTube's revenue stream while the case was in court. Balance tipped.” 8. Sites can be blocked, taken out or shut down in the U.S. Ahrens pointed out on her blog on the Stanford Law School website, “The proposed legislation also gives the Attorney General and the Justice Department the power to shut down websites before they are actually judged infringing.” Also: “Courts would be able to order any Internet service provider to stop recognizing an accused site immediately upon application by the Attorney General, after an ex parte hearing. By failing to guarantee the challenged websites notice or an opportunity to be heard in court before their sites are shutdown, SOPA violates due process.” 9. Your Internet-based company or your website/s can also be stopped from doing business with US-based sites because SOPA/PIPA allows content owners to stop advertising and online payment. Payment processors and online advertising network may be ordered to stop doing business with sites, yes – including those from outside the U.S. – that are allegedly committing copyright infringement. Trevor Timm, in his blog entry “How PIPA and SOPA Violate White House Principles Supporting Free Speech and Innovation” on explained, “PIPA and SOPA also would allow copyright holders to get an unopposed court order to cut off foreign websites from payment processors and advertisers. As we have continually highlighted, copyright holders already can remove infringing material from the web under the DMCA notice-and-takedown procedure. Unfortunately, that power abused time and again. Yet the proponents of PIPA and SOPA want to give rights holders even more power, allowing them to essentially shut down full sites instead of removing the specific infringing content.” 10. Sites can be unfairly blacklisted., on the blog entry “How will SOPA and PIPA affect your SEO strategy?,” pointed out that “your website could be unfairly get shut down/blacklisted when the government or the owner of the copyrighted material identifies your website as hosting copyrighted material and falling guilty of copyright infringement.” Some companies might also manipulate the loopholes in these laws and use them to create a sort of list of the sites that they would like to blocked or censored. Trevor Timm, in his blog entry “How PIPA and SOPA Violate White House Principles Supporting Free Speech and Innovation” posted on explained: “As we noted months ago, this provision would allow the MPAA and RIAA to create literal blacklists of sites they want censored. Intermediaries would find themselves under pressure to act to avoid court orders, creating a vehicle for corporations to censor sites—even those in the U.S.—without any legal oversight. And as Public Knowledge has pointed out, not only could this provision be used for bogus copyright claims that are protected by fair use, but large corporations could take advantage of it to stamp out emerging competitors and skirt anti-trust laws.” 11. Sites will be forced to police their user-contributed content. This is a burden for the websites financially because it would require a significantly bigger workforce just to monitor and also because it increases risks of exposures to litigation even for Internet companies that are acting in good faith. Wikipedia gave this example: “…in its current form, SOPA could require Wikipedia to actively monitor every site we link to, to ensure it doesn't host infringing content. Any link to an infringing site could put us in jeopardy of being forced offline.” 12. Sites would have a tendency to over censor, over block. When sites do this, you would have a harder time linking to sites or even having your comments posted. New York Times’ MacKinnon warned of this added threat to free speech – when the websites themselves would begin to over censor or over block the contents on their own sites: Recent academic research on global Internet censorship has found that in countries where heavy legal liability is imposed on companies, employees tasked with day-to-day censorship jobs have a strong incentive to play it safe and over-censor — even in the case of content whose legality might stand a good chance of holding up in a court of law. Why invite legal hassle when you can just hit “delete”? David Drummond, Google SVP Corporate Development and Chief Legal Officer added in his post that this censorship of the web would “provide incentives for American companies to shut down, block access to and stop servicing U.S. and foreign websites that copyright and trademark owners allege are illegal without any due process or ability of a wrongfully targeted website to seek restitution.” 13. Worse, sites may be encouraged to use the “Vigilante Provision.” Trevor Timm, in his blog entry “How PIPA and SOPA Violate White House Principles Supporting Free Speech and Innovation” posted on, has dubbed the “vigilante provision” an entry in PIPA and SOPA “that would grant broad immunity to all service providers if they over block innocent users or block sites voluntarily with no judicial oversight at all. The standard for immunity is incredibly low and the potential for abuse is off the charts. Intermediaries only need to act “in good faith” and base their decision “on credible evidence” to receive immunity.” Timm gave this as an example of abuse of the provision: “For instance, an Internet service provider could block DNS requests for a website offering online video that competed with its cable television offerings, based upon “credible evidence” that the site was, in its own estimation, promoting its use for infringement....While the amendment requires that the action be taken in good faith, the blocked site now bears the burden of proving either its innocence or the bad faith of its accuser in order to be unblocked.” Your website could be that online video website in the example. 14. SOPA and PIPA would affect too many sites, including the social media sites. And if your Internet company, like SEO companies and Internet marketing firms, depend on social media sites, the game would change considerably. The social media sites, carrying the burden of being liable for users’ actions, would be forced to over-censor, be overly strict, or have an agonizingly slow process, or quite possibly, tend to just block or delete entries or links at the slightest indication of possible legal trouble. 15. “Linking to other sites would be tedious, time consuming and could potentially force the company offline,” according to Wikipedia. And after all that, there would still be no guarantee of exposure on US sites for your company or your product. 16. Also according to Wikipedia, some foreign (or non-US) sites would be prevented from showing up in search engines. Let me say that again – your own site or other efforts for SEO or Internet Marketing may not appear in search engines as the pending bills could bar search engines from linking to certain sites. Sean Flynn at added that this kind of “search blocking” that was included in SOPA and PIPA is “widely regarded as Internet censorship.” Timm also said in his blog entry posted on that the pending bills would empower the Attorney General to “de-list websites from search engines, which, as Google Chairman Eric Schmidt noted, would still ‘criminalize linking and the fundamental structure of the Internet itself.’” 17. Wikipedia pointed out that big media companies may seek to cut off funding sources for foreign competitors. Foreign competitors, of course, could be your company. 18. There would be a climate of uncertainty and restrictions where, for example, all your SEO efforts for the day could just disappear at the drop of a hat; just like that. The law is too powerful, far-reaching and too vague and full of loopholes that could easily cause the shutdown of companies or entire websites. 19. SOPA/PIPA could shut down/block blogs. So if your business depends on blogs, you would need a major rethink. The pending bills would make it the responsibility of the blog owners in the U.S. to police content, including those posted on the comments, for possible copyright infringement. This makes the blogs vulnerable to lawsuits and the possibility of being blocked or shut down. 20. The bills would drastically change search engine strategy and the industry surrounding it. With sites that can be de-listed on search engines, preventing the search engines from linking with them, SEO strategies will definitely have to be re-imagined. Also, Union Square Ventures’ Brad Burnham, in his blog entry “The PROTECT IP Act Will Slow Start-up Innovation” on, mentioned that SOPA and PIPA would give a “leg up to foreign (non-US) search engines, DNS providers, social networks and others.” 21. Online forums would be affected. And if your Internet-based company relies heavily on online forums, you would be hit hard by SOPA/PIPA, too. Forums would carry the burden of policing the entire site, including posts and comments by forum members, for every possible copyright infringement. A mistake could lead to being shut down or blocked. And even malicious claims could do great damage. 22. Video sites like YouTube would be affected. Again, if your Internet-based work depends on video sites, better be ready for a big change if SOPA and PIPA go through. 23. Sharing and networking sites like, daily motion, and the like would be affected, again because of the burden that SOPA and PIPA would place on these sites. Such sites outside the US that face allegations of copyright infringement could be blocked in the U.S. and they would also not be able to use commerce and ad lines. 24. Suspension of sub domains. Julie Ahrens, on her blog on the Stanford Law School website, said that “ordering Internet service providers to remove any offending domain name would require the suppression of all sub-domains associated with the domain-- censoring thousands of individual websites with vast amounts of protected speech containing no infringing content.”
As of now, SOPA and PIPA have stopped – temporarily – their march in both the Senate and the Congress. After the protests, the White House released a statement that said, “While we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response, we will not support legislation that reduces freedom of expression, increases cyber security risk, or undermines the dynamic, innovative global Internet." Both bills, however, are far from dead. Their proponents plan to bring them up for mark-up next month. Those who opposed SOPA and PIPA plan to – and should – remain vigilant so that the bills, as they are currently written, would not be passed. Jim Hedger of Digital Always Media – as cited by Miranda Miller in her blog entry on – said that the solution is to draft the bill with all parties represented. “I’d like to see people who understand how the information works; I’d like to see a cross-section of people at the table. Content creators, law professors, copyright holders, philosophers, the MPAA, and the RIAA, there’s a place at the table for them,” he said. “Whoever makes the media products should be at the table, along with people who actually understand the environment. It can’t just be up to the copyright holders. If it is, they’re just protecting their own interests at the detriment of the consumers and Internet users.” The resulting bill/bills should ideally be a balance between the rights of creators of content (the copyright owners) and the rights of web users to a free and open Internet. ]]>
<![CDATA[ Outsourcing and Reinventing the Workforce: Understanding How Revolutionary Technology Drives Advances in Business ]]> BPO sector. In this Internet Age, transformative inventions and rapid technology advances are radically changing how we live and how we work. They are also making a huge impact on business models – changing them, reshaping them. Jeffrey F. Rayport, writing for “Business Impact” at MIT Technology Review said that while technologies like daily newspapers, radio, and television took decades to reach 50 percent of U.S. households, “the Web took only a few years.” Change in the Workforce and the Workplace In that short span of time, a new generation has grown up with these technologies and is now joining the workforce. These are people who know a life of: 1. Mobility – MP3s, cloud computing and tablet PCs 2. Connectivity – a recent New York Times article reported that findings of a University of Milan research involving 721 million Facebook users show that the average number of acquaintances separating any two people in the world was 4.74. Yes, now just 4.74 degrees of separation, not six. 3. Increased speeds and easier access – and it’s getting even faster. Google’s “PageRank” algorithm, as Rayport pointed out in his Business Impact article, “helps find answers to 70 percent of the world’s online search queries, (and) has changed how we as a species find the information we want or need.” “Now,” he added, “Google Instant provides search results before we’ve even finished typing the query.” This generation is exactly the kind of people who would choose tablet PCs and would wholeheartedly welcome further mobility. Technologically savvy, they are not afraid of change and are open to more flexibility in the workplace. They know the concept of working anytime, anywhere; in fact, they live it. Mobility, connectivity, increased speeds and easier access and the technologies that make these possible have also driven changes in the workplace, allowing for globalization, working outside the office and outsourcing. The fundamental change in how we interact with data and services has made it possible to rethink business process strategies and change business models. It has also made outsourcing and offshoring not just possible, but also a smart way to do business. Last March, The Economist reported on the success of an outsourcing firm in fixing Britain’s public finances “thanks to smarter use of information technology and office space, and keener terms from suppliers.” Harnessing technology is, as we know, key – as is breaking down the barriers of time, distance and language with better products and services and global talent. The challenges for businesses now and further down the road: 1. Tapping into global talent and keeping them – Finding and keeping like-minded people who are talented and tech savvy. Facebook, for example, knows this, and maybe too well. They have been executing what Fortune’s Miguel Helft and Jessi Hempel have described as “master talent grabs,” luring some of the best talents from rival Google into their fold. 2. To keep innovating – The social networking giant also knows that to stay ahead of the competition you have to offer better products and services. It’s a rapidly changing market and you have to be faster. Roll out new products and services ahead of the competition. And always find a way for your external collaborations to boost further innovation. Be the firm that offers not just reduced costs but also reduced risks and more value. Further enable business model innovations. Technology, to borrow Bill Gates’ phrase, “amplifies human potential.” It will help pave the way to more openness, allow us to reach further into what we can do, lead us to even greater knowledge, connect us to other people across the globe, and allow people, again, to borrow from Gates, “the opportunity to put their knowledge to work and take advantage of greater opportunities to lead productive and fulfilling lives.” ]]> <![CDATA[ Tips for Successfully Outsourcing SEO Processes ]]> Find a point of contact you can trust. Make sure the person you are speaking to is someone who understands your business and your goals. Do your due diligence. Is the company reputable; what is their own site like? Are the people managing your account invested in your success?
  • Look for transparency. Make sure you understand the whole process and how the company intends to achieve its results. Nothing comes easy in SEO and it takes time, especially in competitive industries. Simple guarantees mean nothing. If you spend six months of your time and the results aren’t there in the end then it doesn’t matter how cheap it was. Make sure the reporting is thorough and verifiable. Get the company to explain it to you if you don’t understand it. Find out where the work will be done. If any or all of the work will be done offshore make sure that you are comfortable with the quality controls that are in place.
  • Language is key. Search is all about language. Subtle differences in the phrasing of keywords can be very important. Outsourcing offshore can be extremely cost-effective but make sure you are comfortable with the language skills of the people who will be doing the work and make sure there are quality controls in place.
  • Find a balance of quality and quantity. Avoid simple numerical KPI’s such as a certain number of links or articles per month or even a certain search ranking. Again, make sure you understand the underlying fundamentals and make sure your SEO is being constructed with a foundation of quality and with long-term success in mind. This process is a marathon, not a sprint.
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    <![CDATA[ Outsourcing and the Power of One ]]> contact some outsourcing providers and see if they are willing to discuss the business and offer suggestions about how to proceed. This kind of initial advice should be free of charge and the entrepreneur should not have to pay any exorbitant start-up fees. Creating a detailed and informed plan is one of the keys to successful outsourcing; but there is no need to be daunted by a lack of experience. Most of the information required is readily available at sites like ours. So with a bit of patience and persistence it is easy to create a roadmap that is optimized for success. ]]> <![CDATA[ The Challenge of Offshore Outsourcing – Keeping it Real ]]> Philippines. Given the above, obviously the ideal way to begin an outsourcing project is with a site visit to meet the team so you can impart to them firsthand the culture of the organization and the expectations that will be placed on them. This also allows both parties to ‘put a face’ on their distant colleagues and create a certain empathy that no video conference could ever really replicate. For many, however, an introductory trip to the Philippines is not possible; and even for those who can go at the beginning of a project, frequent trips may not be possible. So the challenge arises of how to maintain the focus, commitment and connection of an offshore team while interacting remotely. One of the keys is face time. Even if it runs a distant second to an actual in-person meeting, allowing your staff to see your face creates a connection that goes a long way toward making up for the dozens of cold e-mails that will have passed between the two sides each week. This is just a basic human need and no amount of modern technology can erase it from our psyches. The next key is local staff integration. Let your local staff know who’s working for you offshore and vice-versa. Have your staff in each location exchange profiles or allow them to connect via social networking if that is within company policy. Understanding and friendship promote cooperation and communication -- and can prevent the misunderstandings and resentment that might doom an offshore process. Finally, make sure to create opportunities for positive interaction. Some outsourced, offshore processes can become so routine that information flow becomes rigid and morale and performance suffer. Try to carry out regular evaluations and offer incentives for strong performance. Give your staff positive feedback and solicit input from them. In the end it’s about keeping things human. Offshore staff may be out of sight but keeping in mind that they require a human connection will enable you to develop a healthier and more productive offshore component for your business. ]]> <![CDATA[ The 3 Competitive Advantages of Start-Ups and Emerging Companies in Offshore Outsourcing ]]> 1. Outsourcing is more readily accepted by local staff. One of the biggest problems that established companies face when they begin an outsourcing project is getting local staff members onboard for the transition. Colleagues may be losing their jobs; or at the very least there are shifts in focus and responsibility and changes in operating procedures that are forced upon local workers. And if local and outsourced resources cannot work well together toward a common goal then the project is doomed from the start. New companies are able to integrate outsourcing from the very start and create a modular approach to their processes that allows for teams to be located remotely yet integrate seamlessly through robust communication networks. 2. Money is not wasted on outmoded infrastructure. New companies have the luxury of building their systems from scratch with the latest technology. Older companies may be resistant to investing in the latest infrastructure because of heavy investments already made in existing technologies. Offshore outsourcing has benefited enormously from new technologies such as VOIP that enable enhanced remote collaboration for a fraction of the cost of traditional telecommunications. 3. The process is more likely to be handled by senior management In today’s economy, companies need to make decisions quickly and adapt to markets that change more rapidly than ever before. Outsourced processes are no different: they often require adjustment and re-calibration to meet changing market requirements or evolving technologies. Larger companies may be slow to adapt, leaving their outlying outsourced processes to age and become outmoded. Start-ups and emerging companies are more likely to have upper management focused on all processes and able to make quick decisions to optimize their outsourcing. ]]> <![CDATA[ 5 Keys to Improving Quality in Offshore Business Process Outsourcing ]]> Sourcefit Outsourcing Blog: 5 Keys to Improving Quality in Offshore Business Process OutsourcingOne of the immediate concerns that arises when processes are outsourced overseas is whether or not quality standards can be maintained. As a provider of process outsourcing in the Philippines, we strive, of course, to deliver the highest standards of quality for the processes with which we are tasked; but there are challenges that must be overcome both by us and the client in order to achieve optimum results. Here are the 5 keys for assuring quality while also keeping costs as low as possible in an offshore outsourcing structure. 1. Create a Quality Assurance Plan. No matter how large or small the enterprise or what type of process is involved, from software development to teleservices; management must create a plan specifically devoted to quality assurance. The plan should cover the following points: a. At what points in the development/production process should quality be assessed? b. Who will carry out level one QA? c. Who will they report to? Who will manage them? d. What is their mandate? e. How/when/where shall QA findings be implemented in the development/production process? 2. If possible, implement a two-tiered approach where quality is systematically checked immediately at the offshore facility and then locally as well. Depending on the process, a certain percentage of output can be checked offshore and then a percentage of the QA’d output can then be double checked. 3. Utilize existing management and admin resources in the QA process. Especially if the budget is tight, utilize existing management to check output. Even if only a small percentage can be checked, the effect is exponential. Make sure that even this QA is scheduled and systematized with a clear reporting structure. 4. Make sure SLA’s are in place for each element of the process, including staffing, to be able to quickly remedy recurring quality issues effectively. 5. Use QA results to constantly improve processes. POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year
    Is Outsourcing Right for your Business?
    Ultimately each business owner or manager must assess their individual situation and decide if the benefits of outsourcing outweigh the risks. Please contact us for a free, no-risk consultation. A member of our upper management team can help you explore the possibilities and opportunities in outsourcing to the Philippines. Share This: ]]>
    <![CDATA[ 10 Keys to Outsourcing in the Philippines ]]> Sourcefit Outsourcing Blog: 10 Keys to Outsourcing in the PhilippinesI have tried to put together a quick reference guide here of strategies that I have seen implemented by companies that have been successful with their outsourcing projects in the Philippines. 1. Define your goals. Identify the metrics that need to be achieved for success and discuss these metrics clearly with your outsourcing provider. Your provider should be able to provide you with valuable input on reasonable production expectations. 2. Find the provider that feels right. Don’t focus too much on small price differences. Those differences don’t amount to much if your account is not receiving the attention it deserves or if you are unable to communicate well with your outsourcing provider. Make sure upper management at your provider is really invested in the success of your project. Don’t let yourself get stuck with middle management – and if it happens during the sales process you can be sure that it will happen once you have signed your contract. 3. Due diligence. Ask for references and follow them up. 4. Get your home team on board. If collaboration is required between offshore and in-house staff, make sure your in-house team buys into the concept. And if there are problems with in-house operations and processes; those same problems are likely to crop up again in outsourcing if they are not clearly addressed and resolved. 5. Communicate your vision. Your offshore staff wants to feel a part of something and they want to feel confident in product or service they are involved with. Your outsourced Philippine staff is highly adaptable and very willing to assimilate the corporate culture of their client. Make sure they have a clear set of expectations and try to remain consistent with those. 6. Create an efficient workflow and secure infrastructure. Implement secure tools for collaboration and electronic communication. Make sure that secure protocols are always followed. 7. Implement quality control. Quality control should be a discreet step in both offshore and onshore processes. Accountability must be constantly reinforced. 8. Assign a manager or designate a person in charge. There should be a clear pathway of communication and locus of responsibility within the organization. 9. Stay involved.You will always be able to provide special motivation to your team. Stay as involved as you can. Work with your provider to make your involvement efficient. 10. Start small and grow with success. If possible, test and refine your offshore processes on a smaller scale and then replicate successful strategies for managed growth.
    Is Outsourcing Right for your Business?
    Getting Started is Easy and Risk-Free can help you find out more about beginning and implementing your own outsourcing strategy. Or you can have a free, no-risk consultation with an expert. We'll help you determine the opportunities and possibilities. Tweet: A quick guide on the strategies implemented by companies that have seen #success with #outsourcing in the Philippines Visit our other Channels: Sourcefit: Outsourcing in the Philippines on FacebookSourcefit: Outsourcing in the Philippines on TwitterSourcefit: Outsourcing in the Philippines on Google Plus ]]>
    <![CDATA[ 5 Tips for Recruiting Outstanding Offshore Customer Service Agents and IT Staff ]]> Sourcefit Philippines, Outsourcing News:5 Tips for Recruiting Outstanding Offshore Customer Service Agents and IT StaffWith the rise of high quality VOIP services and powerful CRM applications that make remote collaboration easier than ever, more and more small and medium businesses are considering cutting costs by outsourcing their customer service and IT support staff to an offshore specialist. One of risks in following that path, of course, is that management will lose control of the process and that quality will suffer. And by quality I mean not only that quantifiable performance indicators will not be met, but also that the company’s unique vision and culture will not be communicated properly to the agents and subsequently to customers. The first step in averting that risk is to choose an outsourcing partner that offers close personal support and a custom solution for your business (such as Sourcefit!). In addition to that, however, there are some simple recruiting strategies that can help ensure that your offshore staff function as a seamless extension of your local team. 1.Look for past success. This might be promotions at past jobs, entrance to a top university, dean’s list, or some other accolade. The will to excel should show up somewhere. This is a must. 2.Make sure that your employee’s life will be reasonable. They must not live more than 1.5 hours away (and ideally 1 hour or less) and they must have stable care in place for their kids. 3.They should have experience on international accounts. Expectations for local Philippine accounts are quite different and even if the candidate’s English skills are adequate, the lack of international experience will lengthen training time and may have instilled habits that would need to be corrected. 4.Test, test, test. In addition to an English test, it is helpful to devise simple aptitude tests for any necessary skills. This provides an objective framework to compare candidates. 5.Introduce your performance metrics and expectations within the interview process. It’s never too early to begin communicating your expectations. If you follow these guidelines then you should be able to find staff who have the tools to get the job done and they will already be on their way to internalizing your expectations. Stay tuned for more tips on onboarding and integrating your new offshore staff. POPULAR POSTS Definitive Guide to Technical Support Outsourcing & Offshore IT Services Finance & Accounting Outsourcing (FAO): Overview and Related Outsourced Services Guide to Banking BPO, Financial Services Outsourcing 24 Ways that SOPA and PIPA would affect SEO, Internet Marketing, Internet-based Jobs and Companies in the Philippines and Around the World Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year
    Is Outsourcing Right for your Business?
    Please visit our Customer Service Outsourcing and IT Support: System / Network Admin Outsourcing pages to learn more. Or you can have a free, no-risk consultation with a member of our upper management team. We’ll help you explore the possibilities and opportunities. Share This: ]]>
    <![CDATA[ The Document Scanning Industry – The Role of Outsourcing in the Movement Toward Scanning-to-Process ]]> outsourcing providers must continue to evolve and boost their ROI proposition in order to prove their value to clients. According to a survey conducted by AIIM Market Intelligence, two primary factors drive companies toward scanning and imaging: knowledge management and productivity. Other concerns, such as saving space, reducing paper and security were clearly secondary. This should send a clear message to the industry that scanning to process, rather than scanning to archive is the pathway to growth. Although new software and hardware have made it easier for companies to implement scanning-to-process initiatives internally, outsourced service providers maintain several key advantages that allow them to offer a superior solution if properly packaged and communicated to clients. First of all, clients face a number of challenges when trying to implement advanced scanning procedures in-house: 1.Workers within the enterprise are resistant to change and will push back against procedures for consistent and proper indexing of digital documents. 2.Training of internal staff is time consuming and expensive. Turn-over forces constant re-training. 3.Oversight and maintenance of quality standards is difficult. 4.Staff from different departments will have difficulty integrating and coordinating data within business processes. 5.Purchase and maintenance of state-of-the-art hardware, software and processes is expensive and time consuming. Providers need to capitalize on these challenges and emphasize to clients that domain expertise is required to implement a long-term scanning-to-process solution. That domain expertise encompasses the following: 1.Process integration specialization. Providers must offer value-added services including consulting on process integration, productivity specialists and indexing specialists. 2.Responsibility, oversight, continuity, consistency. By taking ownership of the process and delivering domain expertise, the client is freed from the burdens of management. 3.Efficiency of operations and costs. Providers have to control their own costs to ensure that clients can easily see the cost-performance benefits. Doing the legwork to optimize internal processes, such as adding an offshore component to indexing and quality assurance tasks, is already a major step in tilting the cost-performance equation in favor of scanning specialists. While superior equipment does factor into the value proposition for scanning providers, it is clear that the most compelling aspects of an advanced knowledge-management and productivity offering are labor intensive tasks undertaken by trained specialists. At Sourcefit, our goal has been to create a rich resource of document management expertise that is articulated and enacted by expert staff capable of becoming a key element in an advanced knowledge management and productivity offering. Our goal is to make our clients indispensable partners for the enterprises that they service, rather than just a convenient option for document archiving. ]]> <![CDATA[ Choosing an Outsourcing Destination: Philippines Versus India ]]> Sourcefit Philippines Outsourcing Blog: Choosing an Outsourcing Destination: Philippines Versus IndiaIndia was one of the first countries to develop a thriving offshore outsourcing industry and still attracts over 30% of the offshore outsourcing market. India was so successful, in fact, that it came to symbolize all that was right and wrong with the industry as a whole. Recently, the Philippines has made significant inroads in the market, with 6.1 billion in sales in 2008, trailing only Canada and India. There are a growing number of choices now for companies looking to cut costs by outsourcing business processes to offshore locations; and the choice of a location is one of the most important aspects of the decision-making process. Having outsourced in both countries, I’d like to share my first-hand experiences with other entrepreneurs to help them make more informed decisions. When I first considered outsourcing, I was running a Netherland-based start-up focused on mobile phone applications. One of the most serious challenges we faced was finding developers with the proper experience in our local market. So we tried everything, including job sites, networking, and expensive recruiters but we just could not fill our openings. Then, one of our business partners mentioned that they had been working with a small firm in India and were having great success with their outsourcing, so I thought that perhaps this was the answer to our problems. And in many respects it was, but our outsourcing journey had actually just begun. We did have some success with our Indian outsourcing effort. The company we chose came highly recommended by someone we trusted and we were not disappointed. They were honest and diligent and they were able to recruit some talented developers. The problems we eventually encountered had more to do with the nature of our development and larger issues facing the Indian outsourcing market in general than with our outsourcing partner. Our applications were related to social media and, as a small company, we needed significant input from our development team on issues such as user interface and features. In the end, while the coding was solid, the cultural differences made it difficult for us to get what we needed from our team. They simply didn’t use social networking the same way that our target audience did and, while we took responsibility for product design, we felt like we were missing vital collaborative energy. The other problem we faced was high turnover. The labor market in India was so overheated that employees could not be counted on to remain long, which really undermined the continuity of our project. Finally, these issues caused us to assess other options, including Eastern Europe and the Philippines. We decided that communication issues would make things difficult for us in Romania or Hungary so we began looking more closely at the Philippines. Again we worked through acquaintances and we were able to find reputable local partners to begin our project. We again found a rich pool of specialized developers, though not as many as in India. But while there were fewer numbers of developers, there was also less competition for their services. Once we got a team up and running we found more stability in the Philippines than we had in India. We found our Philippine outsourced team to be much more westernized than our team in India. They were also malleable in terms of assimilating our corporate culture, but we had to be quite clear about our expectations and we had to provide close supervision over the team in order for them to internalize our goals and processes. Our Indian team was less flexible and our staff there tended to have less variation in their approach to their work. In the end we decided to make a long-term commitment to the Philippines and we closed our Indian operations, but this was a decision based on the unique needs of our business. For other applications and for other types of businesses India might make the better choice. The key is to find a partner you trust and be thorough in vetting your new staff. Make sure that not only can they carry out the processes you require, but also that they can fit properly within your organization and reinforce your unique approach and vision. To learn more, please read the top post Metro Manila Beats Mumbai - Philippine BPO’s growth for Q1 and the rest of the year.
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