Global Market Leaders Addressing Global Issues: Last October 26-27, CEOs and business leaders of the outsourcing industry gathered at Sofitel Philippine Plaza for the International Outsourcing Summit 2010. This was organized by the Business Processing Association of the Philippines or BPAP, the umbrella organization for the industry that the Philippines considers as the "sunshine industry".
In this two-day summit, senior executives were able to tackle the issues concerning the global outsourcing industry, and the challenges they have to overcome. As the industry faces more complex challenges, the time has come to converge and talk about the things that need to be done so the industry will continue to succeed and flourish.
Challenges in the Global Outsourcing Industry Major global issues in different areas such as health services, business development, banking and finance, marketing, and talent acquisition were discussed in the summit.
On the first day of the summit, I was able to attend the CEO panel on addressing the challenges of growth and I got these insights from the CEOs and senior executives from major outsourcing firms Genpact, Infosys, JP Morgan Chase & Co., and McTranz:
* Growing complexity of work needs innovation. * Be more nimble, global, and agile to meet the global challenges. * A major cause of stress? Expecting results out of people not rightly skilled * Key areas of strategic focus include: talent management and development, improvement of the regulatory environment, united focus industry-side to remove challenges and roadblocks, and break stereotypes.
Another noteworthy session is the academe panel on specialized talent and language acquisition. Based from the presentations of notable speakers, it all comes down to one thing: having a huge pool of available talent will not suffice. What is more important is to make sure that the workers have the knowledge/expertise and skills which are suitable for BPO work.
As BPAP's Executive Director for Talent Development Atty. Jamea Garcia said, talent is what drives the global outsourcing industry, but there are many things to be done to ensure that the available talent can meet the demands of the industry.
Following the demand for more effective use of resources, increased talk is being seen in the UK about the efficiencies and cost savings that can be achieved through offshoring and outsourcing.
While there was already a lot of tension over jobs being lost among employees in the public sector in the UK, media sources have published reports that millions of private sector jobs are also at risk to offshoring. However, such predictions are likely formed from a lack of substantiation and from inflated figures. The emergency budget’s direct impact on the UK’s unemployment rate remains to be seen.
Outsourcing has been in practice in the country’s government for about 20 years. Although it is effective in many areas with the legal process offshoring industry experiencing increased growth, it has been troubled in terms of managing offshoring relationships.
“The bad press that surrounds the cost-effectiveness of some past public outsourcing projects notwithstanding, I would expect a well thought through outsourcing contract to provide effective and cost-effective delivery of services,” said Danny Jones, partner in charge of UK public sector at advisory firm TPI.
This may be due to the increase in outsourcing contracts that have been given, causing a host of new jobs in the outsourcing community. However, according to Jones, the outsourcing industry could also be negatively impacted: “Suppliers are already feeling the squeeze particularly when it comes to negotiating contract extensions; and they expect this to continue.”
The recent report by KPMG confirms this as it discovered that outsourcing is not as high on the CIO agenda as some may have anticipated.
Although this may look bleak to proponents of offshoring and outsourcing, industry players will maintain that there are still more opportunities than there are drawbacks to be had regarding the announcement. Although the government is in need of cost-saving solutions, it also needs solutions that produce results fast. This is something that offshoring industry is proven capable of doing.
It now comes down to just how fast outsourcing will deliver such solutions while still paying regard to semantics. After all, it will typically take 18 months and sometimes two years for an outsourcing project to being producing significant earnings from the time of signing. This could prove to be a significant issue unless the government changes its outsourcing model to resemble that of the private sector.
“Typically, the government has awarded large contracts to a single supplier, but we will see a shift to a model where government breaks large projects into manageable blocks which are then awarded to suppliers according to expertise/service required. This will increase the effectiveness of delivery if it is well managed,” says Jones.
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