(Published in Business Mirror under the Free Enterprise column, January 11, 2012)
IN 2008, I wrote an article in BusinessMirror titled “Can outsourcing be stopped?” where I mentioned Barack Obama’s repeated spiel in his campaigns that, if elected, he would discourage companies from “shipping jobs overseas” by taking away tax breaks, or by giving benefit to those corporations that keep jobs domestically. From then on, the US government did not have a clear policy on outsourcing; thus, the business process outsourcing industry in the Philippines and elsewhere like India still experienced spectacular double-digit growth, helping spur the economies of the two countries.
But just last week, President Obama jumpstarted an effort to urge US business leaders to keep jobs at home instead of outsourcing them overseas as he rolled out a new election-year theme aimed at courting middle-class voters.
This has been the long-standing campaign of the US government against outsourcing, which was capped by the filing of House Bill 3596, or the “Call Center and Consumers Protection Bill,” in the US Congress seeking to discourage American-owned companies from outsourcing call-center work by publishing those companies that put up call-center operations abroad, preventing them from availing themselves of Federal grants or guaranteed loans, requiring call center employees to tell US consumers where they are located, if asked, and requiring call centers to transfer calls to a US call center if asked.
The bill places the power to choose and decide, not only to US businesses, but also among consumers. If approved, the Philippines, considered as one of the leading BPO service providers in the world, is expected to be negatively affected because apart from the pressure among US businesses, American consumers will now have the power to choose where their calls get routed to. That’s why the Philippine and Indian governments are stepping up to influence and lobby with US policy-makers to avert the passage of the bill.
If indeed the bill gets approved, what will happen to the BPO industry in the country? Which brings us to the pressing question – can outsourcing be stopped? Most likely not. US firms need to stay competitive in the global arena and outsourcing is one of the drivers to bring down cost.
Nonetheless, the BPO sector needs to brace itself from the short-term impact of the bill, if passed, as it may temporarily slow down business. It needs to stay competitive by continuing to deliver the right quality and cost.
What works well for Filipino call-center agents is that many US consumers prefer them over others due to our innate hospitality and natural adaptation of the American accent. But still, call centers in the country need to continually train to sustain, if not, improve the quality of their employees.
In the long run, the BPO sector needs to cushion the impact of outsourcing backlashes by focusing on innovation. In fact, an IDC survey among BPO clients in the US suggested that a third of the respondents look for BPO providers to drive innovation.
Innovation in BPO may come from three fronts: business model innovation which entails significantly changing the structure and/or financial model of the business; services/markets innovation which entails creating new or significantly differentiated services or go-to-market; and operations innovation which involves improving the effectiveness and efficiency of business processes.
One way of innovating markers and services is moving towards knowledge process outsourcing or KPO, such as research and financial advisory services, animation, healthcare advisory and so on. The KPO industry’s global market size will reach approximately $17 billion only in 2013-14, and India accounts for more than two-thirds of the global revenue.
Local BPO players need to incorporate innovation initiatives in the strategic planning process to provide focus in this area. Government and industry bodies alike should promote and recognize innovation in the BPO sector, so as to sustain its growth in the future.
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Reynaldo C. Lugtu Jr. teaches strategy, management and marketing courses in the MBA Program of DLSU’s RVR-College of Business. He may be e-mailed at rlugtu2002@yahoo.com, or visit his blog at http://rlugtu.blogspot.com.
IN 2008, I wrote an article in BusinessMirror titled “Can outsourcing be stopped?” where I mentioned Barack Obama’s repeated spiel in his campaigns that, if elected, he would discourage companies from “shipping jobs overseas” by taking away tax breaks, or by giving benefit to those corporations that keep jobs domestically. From then on, the US government did not have a clear policy on outsourcing; thus, the business process outsourcing industry in the Philippines and elsewhere like India still experienced spectacular double-digit growth, helping spur the economies of the two countries.
But just last week, President Obama jumpstarted an effort to urge US business leaders to keep jobs at home instead of outsourcing them overseas as he rolled out a new election-year theme aimed at courting middle-class voters.
This has been the long-standing campaign of the US government against outsourcing, which was capped by the filing of House Bill 3596, or the “Call Center and Consumers Protection Bill,” in the US Congress seeking to discourage American-owned companies from outsourcing call-center work by publishing those companies that put up call-center operations abroad, preventing them from availing themselves of Federal grants or guaranteed loans, requiring call center employees to tell US consumers where they are located, if asked, and requiring call centers to transfer calls to a US call center if asked.
The bill places the power to choose and decide, not only to US businesses, but also among consumers. If approved, the Philippines, considered as one of the leading BPO service providers in the world, is expected to be negatively affected because apart from the pressure among US businesses, American consumers will now have the power to choose where their calls get routed to. That’s why the Philippine and Indian governments are stepping up to influence and lobby with US policy-makers to avert the passage of the bill.
If indeed the bill gets approved, what will happen to the BPO industry in the country? Which brings us to the pressing question – can outsourcing be stopped? Most likely not. US firms need to stay competitive in the global arena and outsourcing is one of the drivers to bring down cost.
Nonetheless, the BPO sector needs to brace itself from the short-term impact of the bill, if passed, as it may temporarily slow down business. It needs to stay competitive by continuing to deliver the right quality and cost.
What works well for Filipino call-center agents is that many US consumers prefer them over others due to our innate hospitality and natural adaptation of the American accent. But still, call centers in the country need to continually train to sustain, if not, improve the quality of their employees.
In the long run, the BPO sector needs to cushion the impact of outsourcing backlashes by focusing on innovation. In fact, an IDC survey among BPO clients in the US suggested that a third of the respondents look for BPO providers to drive innovation.
Innovation in BPO may come from three fronts: business model innovation which entails significantly changing the structure and/or financial model of the business; services/markets innovation which entails creating new or significantly differentiated services or go-to-market; and operations innovation which involves improving the effectiveness and efficiency of business processes.
One way of innovating markers and services is moving towards knowledge process outsourcing or KPO, such as research and financial advisory services, animation, healthcare advisory and so on. The KPO industry’s global market size will reach approximately $17 billion only in 2013-14, and India accounts for more than two-thirds of the global revenue.
Local BPO players need to incorporate innovation initiatives in the strategic planning process to provide focus in this area. Government and industry bodies alike should promote and recognize innovation in the BPO sector, so as to sustain its growth in the future.
------------
Reynaldo C. Lugtu Jr. teaches strategy, management and marketing courses in the MBA Program of DLSU’s RVR-College of Business. He may be e-mailed at rlugtu2002@yahoo.com, or visit his blog at http://rlugtu.blogspot.com.
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Philippines BPO Service Provider
Philippines BPO Service Provider