Outsourcing News for December 2011 | MicroSourcing
According to figures posted by Phil-JobNet, the official online job portal of the government, the business process outsourcing (BPO) sector tops the list of job openings for private sector companies. This was validated by records collated by the Bureau of Local Employment (BLE) where job vacancies reached 39,281 as of September 2011. Baldoz said this affirms the Philippines’ standing as a global BPO location of choice.
The report also included that while there’s a large number of job opportunities in the industry, the job profiles of applicants do not match the needs of BPO companies. Only 1,030 candidates applied for BPO positions from January to September this year.
BLE Director Ma. Criselda Sy said call center agents remain at the top of the list in terms of job vacancies, from 2010 up to September in 2011.
BPO Sector of the Philippines Creates Highest Number of Jobs
A P1.1-billion stimulus fund was provided by the government to aid the Technical Education and Skills Development Authority (TESDA) in providing training programs - P500 million of which was allotted for the BPO sector’s “near-hires”. TESDA is also planning to reach out to other cities to assist those who wish to enter the BPO workforce.
Phil-JobNet also showed that other in-demand positions were workers, carpenters, and drivers. Customer service assistants had the second highest number of vacancies at 16,589.
Call Center Agents Philippines
Business process outsourcing (BPO) is one of the revenue generators in the Philippine economy. That is why the government strongly supports the industry. To further improve the country’s pool of Filipino talent, the Technical Education and Skills Development Authority (TESDA) will provide free finishing courses for call center agents (FCCA) as part of the Training-for-Work Scholarship Program (TWSP).
A total of 2,285 slots will be allotted to college graduates and students who have finished at least four semesters, according to TESDA-Cordillera Regional Director Yolanda Olano. She added that the TWSP is not only exclusive to those who are in Baguio and Benguet area - people from Cordillera may also apply for a grant.
Of the 2,285 scholarship slots, 500 candidates will be chosen from Baguio City. Baguio-based organizations such as Globaltech, CTEISI, and Informatics College Baguio Inc, are the partner Technical-Vocation Institutions or TVIs of TESDA for this program. Interested college graduates and students can go their city or provincial chief executives for more information.
For those who want to further improve their skills or learn something new to be suitable for other job opportunities, Olano said they could avail of other training programs being offered by TESDA-CAR’s Regional Training Center and TVIs.
Global procurement outsourcing growth
Industry analyst and research firm Everest Group recently released a report entitled 2012 Market Predictions which notes that global procurement outsourcing will grow by 20 percent next year as clients diversify their procurement deals covering various processes such as inventory management, order fulfilment, and logistics with the help of several service providers. The firm also believes that government sectors worldwide will be more proactive, specifically the UK with its ongoing procurement.
The study also stated that contracts will have a broader scope, with financial executives touching up on procurement outsourcing. This may result to outsourcing contracts that will focus mainly on finance and accounting, as well as purchasing.
Companies like Accenture, ICG Commerce, and IBM are considered strong players in the procurement sector, and there are firms that are likely to make a mark in the market as they post rapid growth. Everest also stated that source-to-contract (S2C) and procure-to-pay (P2P) will grow in 2012.
Large businesses to use enterprise crowdsourcing instead of traditional BPO
The results of the study “Every Crowd Has a Silver Lining” done by Everest Group and Lionbridge Technologies, Inc. (Nasdaq: LIOX) showed that more and more large organizations are inclined to use crowdsourcing instead of traditional business process outsourcing (BPO) for its cost reduction features, flexibility, and provision of access to a more diverse talent pool.
Other vital results of the study are:
• Companies use the ‘private crowd’ model for processes like content localization, support for the shift from traditional BPO, and more.
• It provides more economic advantages - around 70 percent compared to traditional outsourcing.
• Companies enjoy reduced costs in labor and recruitment as crowdsourcing enables them to gain access to talent more quickly.
• Contracts that have been using crowdsourcing for quite some time gain additional perks from third-party service providers like quality assurance and management infrastructure.
The report also stated that crowdsourcing is also applied to almost 50 percent of processes that are related to products and manufacturing.
Sarthak Brahma, Practice Director, Pricing Assurance, Everest Group said crowdsourcing is a new wave method of using global professional services for new processes and is almost as cost-effective as traditional BPO.
Enterprise crowdsourcing is perfect for companies that have large staffing requirements. It enables companies to make use of a variety of talents from pre-qualified workforce to “private crowd”. In line with that, the managed service providers see to it that clients are able to maximize the benefits of crowdsourcing.
The Philippines Gains Traction as Preferred Location for BPO
Swiss financial services firm UBS Investments recently stated that even with the vast improvements in the political and economic aspects of the Philippines, its equities will remain as the key driver for funds next year.
UBS Investments Research Executive Director Jody Santiago said the country is becoming a “safe haven”, attracting investors amidst the economic and political problems. However, the current economic crisis in Europe and higher appraisals of stock might affect the early part of the incoming year.
Meanwhile, the one-year target for the Philippine Stock Exchange Index (PSEi) was set at 4,700 by the local unit of the Swiss banking giant, a 10-percent increase from Wednesday’s closing. This corresponds to UBS Investments’ projected Philippine corporate earnings for 2012, while it is predicted that the economic growth will reach 3.3 percent next year.
UBS Investments also said they favor companies that are doing well and have doable strategies for the firm’s rate cut of 50 basis points next year. The industries that they prefer are infrastructure, tourism, mining, business process outsourcing (BPO), as well as the telecommunications sector.
Outsourcing Growth Impeded by Delayed Payments
A recent survey by consulting and outsourcing services provider Capgemini, together with Harris Interactive, revealed that executives of Fortune 1000 companies face the negative impact of delayed client payments to their outsourcing growth, recruitment process, and revenues.
Based on the Executive Insight Survey which was done online in September, twenty nine percent of respondents said delayed cash flow affects growth. Other areas that affect payment delays are hiring capabilities (27 percent) as well as revenues (20 percent). Late payments also affect the ability to offer wage increases, support on innovation, and investment in research and development.
Almost half (45 percent) of Fortune 1000 executives stated that they have experienced an increase in deferred payments from their clients, while 15 percent said they’ve seen a 25-percent increase in late payments last year.
There are several strategies companies can do to deal with payment delays. One of these is outsourcing cash collections. Majority of the companies that do so reported that it reduced their bad debt loss. They’ve also posted a 34-percent increase in profitability, and 32-percent growth in all points of the revenue cycle.
Low-cost Cloud Computing
According to IT analyst firm Gartner, low-cost cloud computing will be popular in the next few years. With this forecast, there’s a possibility that companies will change their views in pricing and value in the marketplace.
Gartner assumes that revenues from outsourcing IT infrastructure will be greatly affected. The growing popularity of low-cost cloud computing will have a negative impact to the IT services market. Moreover, due to the increase in demand and usage of mobile devices and applications globally, companies are now shifting from desktop clients to web-based services.
Gartner also predicts that with better information security, majority of the top-1,000 companies worldwide are determined to store valuable sensitive data in the public cloud. Nevertheless, the firm believes that the number of cybercrimes will still grow. It is estimated to increase by 10 percent annually.
According to a document published by the Financial Times, there are proposals to the European Commission that involve fining companies if there are breaches in data security.