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August 2012 | Outsourcing Blog | BPO Industry Updates and Articles

Increase in healthcare outsourcing industry

Amidst being acknowledged as the current global leader for call center outsourcing, the Philippines is anticipated to do well in another rapidly growing segment which is health information management (HIM)outsourcing.

In an article posted at news.IDG.no, a 172% increase was identified by the Healthcare Information Management Outsourcing Association of the Philippines (HIMOAP) for the local healthcare outsourcing industry. It posted US$277 million in earnings last year, much higher than S$102 million in 2010. Moreover, the number of the sector’s employees grew from 14,000 in 2010 to 25,000 in 2011.

Jeff Williams, Chairman at HIMOAP, said with the tremendous achievements the sector has brought to the country, there’s no question that sooner or later, the Philippines will evolve as the leader in the robust healthcare services outsourcing arena.
Meanwhile, a 21.4% compounded annual growth rate (CAGR) was seen for the global healthcare outsourcing market by business market research firm Markets and Markets. At present, there are 256 million Americans who have insurance. It is expected to grow because of President Obama’s stipulation that by 2014, all Americans should have insurance.  

JL Botor, President at HIMOAP, said the Philippines have greater chances of becoming the global leader in the healthcare services sector. In fact, more and more investors are also seen kicking the healthcare outsourcing activity in high gear. Local organizations, on the other hand, are working to improve potential workforce, infrastructure, and regulatory environment.

HIMOAP, formerly known as the Medical Transcription Industry Association of the Philippines, Inc. (MTIAPI), is an organization that strongly supports the healthcare outsourcing industry. It provides programs that will further attract investors dealing with healthcare services to outsource to the Philippines. Some of its members include providers of clinical documentation, IT, and training services to entities in the healthcare sector.

The Philippines and Healthcare Information Management
Back then, medical transcription services were the only type of activity seen in the healthcare outsourcing arena, but it was progressively changing as the requirements of the market are evolving. Soon enough, clinical coding, disease management, revenue cycle management, and pharmaceutical benefits management were being outsourced by foreign clients.

One of the reasons experts believe that the country will do well in the global healthcare services industry is the oversupply of nursing graduates (400,000) as well as medical associates in the country. A report from Commission on Higher Education (CHED) showed that even with a low demand rate, more and more students are still taking nursing courses. At present, the HIM sector will be able to accommodate and provide employment opportunities to said candidates.

Cloud Takes the Lead in the Outsourcing Arena

by: Sarah Joson

Wednesday, August 29, 2012 | Comments (0)

Category: Outsourcing News

Cloud Technology vs Outsourcing

One of the latest trends in businesses is cloud computing technology. It is a tool that companies use not only for process and product innovation but also to gain competitive advantage as economies across the globe are still on the road to recovery.     

In an article posted at CloudTweak.com, Seth Bernstein shared major events in the Information Technology or IT outsourcing sector, particularly the cloud computing segment.

A report from research firm Gartner Inc. indicates that the IT outsourcing sector is valued at $251.7 billion and cloud computing is apparently the fastest-growing segment which reached $5 billion this year from $3.4 billion in 2011.

Evidently, the figures are dwarfed by the entire sector’s value, but with the cloud segment’s rapid growth rate, it is now considered a significant player in the vast IT outsourcing arena. Some of the factors that contributed to its growth are:

The cloud will be managed for you.
Instead of hiring additional staff or re-assigning designations, service providers will manage the cloud operation. Software applications will we updated by the providers, upgraded according to the specifications and needs of the business.

The cloud is readily available.
The stocks are limitless when it comes to the cloud. Providers have readily available bundles and packages that suit a company’s infrastructure. They just need internet connection and sizeable data storage units.

Size will not be an issue.
The size of a cloud computing operation can be easily adjusted accordingly. For business owners, they need to list down the applications and software that they need and create a cloud environment that best fits the business operation.

Even if there are still several challenges in the sector such as data security and operation downtime, the cloud’s tenacity has already been proven with its recent developments and rapid growth rate. It won’t be too long before it becomes the most outsourced process in the ITO industry.

Five Outsourcing Mistakes and How to Avoid Them

by: Sarah Joson

Friday, August 24, 2012 | Comments (0)

Category: Outsourcing News

Common Outsourcing Mistakes

A lot of business owners believe that outsourcing can help reduce costs, which is true, but clearly, there’s more to outsourcing than that. It can help align goals and enable businesses to pursue innovative processes that can help improve the entire operation and increase the value of the company in the long run.  

In an article posted at SMH.com.au, Sylvia Pennington shares some insights of industry experts from an interview done by IT Pro. Here are a few things that business owners should look into before signing an outsourcing contract:

1. Don’t forget the other factors.

A lot of executives tend to fixate their attention on the costs, even to the point where their providers no longer have a breathing room to move and grow. This could result to lack lustre performance and output from the outsourced team. If the supplier realizes that they are not making money on the deal, chances are they won’t be proactive and motivated to work for you. Plus, they will be too bootstrapped to even bother to look for innovative processes that could help your company.

2. Strive for a strong partnership.
Clients should reciprocate and even initiate the efforts of establishing a relationship. Some suppliers, especially the ones located in Asia, tend to be more timid compared to their counterparts in other regions because of their culture. Issues will be easier to handle if both parties are involved and have already established a sound relationship.

Another factor that can help an operation is to have a dedicated “troubleshooter” who will handle problems within the operation.

3. Bringing your best arsenal upfront.
With new IT outsourcing deals, providers that put their best foot forward are likely to create a strong partnership. This process is included under the project management where providers are getting to know more about the clients.

4. Include trust as a major factor.
Clients should also see that not everything they want can be and should be followed. As the saying goes, “just because you can, doesn’t mean you should.” Just because you are paying the provider for the services they will be rendering, it doesn’t necessarily mean that your orders will be followed down to every detail, because providers should also be given the right to voice out their concerns because after all, they are the experts in the process.

Clients can design a reward and penalty system where they can impose counter-charges if the agreed upon processes aren’t followed, and rewards if they over perform.

5. Determine the type of contract that is most suitable to the business.
Long-term contracts are more practical in terms of business flow and overall costs, but if not managed properly, dedication of each party may gradually decrease. Short-term contracts, on the other hand, can result to higher costs and constant disruption of operations.

A provider that agrees to help you review and alter the contract from time to time is what clients are currently looking for as trends and challenges are constantly changing.

When Outsourcing Partnerships Turn Sour

by: Sarah Joson

Thursday, August 23, 2012 | Comments (0)

Category: Outsourcing News

Signs of a Crumbling Outsourcing Partnership

There are several reasons outsourcing relationships crumble and solutions for each case vary. Some of the factors heavily depend on the location of the outsourcing provider and scope of the partnership.

Amidst all the obvious factors, industry experts can attest that the real reason behind a dwindling outsourcing partnership could be caused by mismanagement of the entire operation where both parties act as instigators.  

In an article posted at Info.ISG-one.com, the common signs of unstable outsourcing partnerships were identified in hopes of helping business owners recognize the stance of their operation and restore whatever is worth saving because after all, executives initially sought outsourcing services to improve the company and not to acquire additional problems and costs.

Where green actually means red. Some service providers are puzzled when all of the signs point to a good and smooth operation, yet the client is breathing down their necks. What they are missing out on is even if they are coming up with good figures, the client might not be happy with something else, which then fuels a misunderstanding between parties. Like a “watermelon”, things are green and dandy on the outside but red and unstable on the inside.

Providers must keep in mind that they should also align their efforts with what the clients want and how they want it to be done. This should also resound to the employees - they should follow whatever is written in service level agreements.

Contracts are not updated. Partnerships that refer to the contract often could mean they have trust issues. A good and ISG-approved exercise is for partners to periodically update their contracts to change the ineffective clauses and tweak the ones that could be more beneficial to both parties.

Old issues keep showing up. Like in any relationship, previous arguments that were not properly handled or solved will most likely come up during current confrontations. Providers and clients should meet halfway so that past issues wouldn’t interfere with current problems and they could finally move on instead of gaining more challenges - or worse, they may start avoiding each other.
Communication gaps. Most industries, especially the ones that deal with technology, are constantly evolving. One reason businesses fail to keep up with the changes is poor communication within the operation itself. There may be instances wherein top management wants to get something done but job orders are lost in translation from the managers to the service providers. The more open the communication is, the better each employee could understand the importance of a task.

Failing to keep up with the new movements in the industry. Another concern of clients is that providers are not up-to-date with the latest technology or trends of the industry. For the providers, they also see that clients aren’t inclined on learning new ways to encourage their partners to create new things and processes that could be beneficial to the entire operation. Clients also need to show their support when dealing with new projects and innovations because these could make or break the workflow of the operation.

Common Language Problems in Multisourcing Operations

by: Sarah Joson

Thursday, August 16, 2012 | Comments (0)

Category: Outsourcing News

Language Barriers in a Multisourced Operation

Sometimes, businesses have outsourcing operations with different service providers and they usually face a common hurdle - proper dissemination. Problems are normal in all operations, but for companies that subcontract offshore, these problems are intensified due to language barriers.

An article at Business2Community.com highlights common language problems when businesses outsource to several service providers:

Progress of the projects will slow down.

With a multi-sourced operation, new processes are harder to put into effect as providers that serve certain processes are located in different regions. There might be a delay since processes and protocols will need more time to reach a certain department because with some companies, they would have to alter the announcement in a certain way that a specific region can clearly understand the instructions.
Improvement of internal processes might be hampered.
All companies should work like a well-oiled machine, but if language barriers limit effective communication in the company internally, then growth and improvement not only of the business itself, but also professional relationships amongst employees, will be affected. Chances are problems will be overlooked because of limited feedback.

Employees might understand goals differently. 
Even in a regular operation where departments speak the same language, miscommunication usually occurs and goals are not achieved. This can be more frequent in offshore teams as they might have a different understanding of what lead generation, leads, and prospects are.

Challenges are intensified.
Internal issues will be harder to pacify and small problems will be blown out of proportion because local and offshore members might have a hard time understanding each other. They can also misinterpret actions done by the outsourced team because for them, what they did was okay, but for the local team, it could be something that does not meet the requirements.

Authority of managers may be affected.
Every department of an operation is spearheaded by a leader. For a multisourcing operation, there will be several leaders from different parts of the world. There will be instances where leader A will be asked to communicate with leader B and its team members. However, trying to explain the goal to a different team with a different culture will again be a great challenge.

For businesses that are planning to outsource functions to different service providers, they could circumvent all these language barrier issues if they acquire all their services from a single third party outsourcing provider - one that has a good track record and is multi-faceted when it comes to outsourcing services.

Commonly Outsourced Processes

by: Sarah Joson

Monday, August 13, 2012 | Comments (0)

Category: Outsourcing News

There are numerous business functions that are being outsourced today. Business executives have reported that they subcontract processes that range from basic back office to high-valued technical functions.

Commonly outsourced processes by businesses

Apart from trying to stay competitive in a tough market, businesses are driven to outsource to cut overhead costs and align business goals.  Below are some of the processes that are commonly outsourced by businesses based in post-recession-stricken regions.

1. Transcription services - Transcription is procured for several reasons, but the industry that needs it the most is the field of medicine. Med students and practitioners are the ones who need accurate documentation of a certain procedure or presentation, which is why audio/video data are meticulously transcribed into a file.

2. Call center functions - A lot of renowned corporations outsource customer support as it often requires a lot of workers. Segments under this process are customer service and technical support. It is outsourced offshore to countries that have a large supply of English-speaking workers.

3. Payroll and bookkeeping - Nowadays, a lot of back office functions are being outsourced offshore - payroll and bookkeeping are examples of these. A lot of regions offer payroll and bookkeeping services at much lower rates compared to local ones, which is why companies use this to their advantage.  

4. Information Technology (IT) - Software development, application development, and web development are some of the disciplines under this category. IT services are highly sought after in more advanced countries, which is why in some cases, talent shortage and high labor costs become challenges for them which in turn fuel the need for information technology outsourcing.

5. Recruitment
- This function is often outsourced by large, multinational companies that often face a shortage in resources, have overhead issues, or have a sudden increase in positions that need to be filled immediately.

There are other processes that can be outsourced. The great thing is that no matter what business function companies need to outsource offshore, there are several delivery models that they can choose from, making outsourcing a much easier process to deal with.

Five Tips for an Effective Sourcing Strategy

by: Sarah Joson

Friday, August 10, 2012 | Comments (0)

Category: Outsourcing News

Atul Dogra, a Senior Consultant at research and advisory firm Information Services Group (ISG), shared five ways on how businesses that are planning to outsource can construct a well-prepared sourcing strategy.

Factors for an effective sourcing strategy

The article posted at Info.ISG-One.com highlights factors that can help foster a sound sourcing strategy for strategic services and functions, which can also enable companies to minimize unnecessary expenditures in the long run and align goals with the objectives of the business.

1. Prepare an outline of your current expenditures. Documenting your business’ current base cost will help simplify future plans as you already have a point of reference. This can be used to generate a realistic comparative cost analysis. For example, you can compare the cost of your current operation to your alternative plans, as well as point out the areas in which budget can be increased or decreased. It will also give you an insight on what is the current market rate for services and if you are complying with market standards.

2. List down elements that fuel the need for outsourcing. Not only will this help you come up with cost estimates - it will also help you create contingency plans for future challenges, as well as create a flexible operation that can adapt to developments in the industry.

3. Study the available service providers. Another thing to consider in sourcing strategies is the scope and scale of service providers. You can start by reviewing each provider’s past clients and activities. Also, keep in mind that service providers are working against several factors such as competitors, service demand, etc. which is why you’ll probably come across a diverse pool of service providers.

4. Create mock-ups. Testing the sourcing strategies by creating mock situations will help you gauge the success of your plans. Apart from making sure that resources are complete and optimized, it will leave less room for mistakes as you have everything that you would need even before the operation starts.

5. Consider all possibilities, even unfavourable ones. The best way to minimize problems in the future is to prevent them. Having a list of all the possible challenges will help you create executable contingency plans that can help minimize the effect on the entire operation.

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