Today two economic trends are accelerating Business Process Outsourcing or BPO’s rate of growth. The first is globalization. For the first time since the days of sailing ships, trade barriers are coming down. The growing integration of economies and societies around the world makes globalization work for all. Through globalization the poverty line has been alleviated in many developing countries including Philippines, India and China. Information technology and high English proficiency level made BPO centers flourish in these countries. The labor cost is low when foreign investors ourtsource their businesses. The average rate a Filipino worker gets is $1.5 per hour and a $1 per hour for Indian workers. Local and National governments push to promote this service advantage and are gaining positive response from major countries such as United States and United Kingdom.

The Internet, of course, is enabling this trend. Doing business on the Web is easy and becoming easier. A Web site makes your products available to a customer around the corner as well as half way around the globe. Geographic boundaries disappear in a Web browser.

The Internet has made the world increasingly competitive, the second economic trend affecting BPO corporations. Product cycle times that used to take months now can take hours. This frenetic pace is forcing companies to harness all their resources to concentrate on their core competencies. They can’t afford to because today’s competitive world is not as forgiving of mistakes. Outsourcing is becoming the only way to prosper and succeed in a world moving at Web speed.

What complicates business today is that successful companies must have even better core processes to just stay in the game. Outsourcing becomes the only way a company can concentrate its scarce resources of time and money on its core competencies and still get better performance for its non-core functions. Nevertheless, it’s clear that the dynamics of global economic and geopolitical challenges have impacted this market during the past year.

Philippines leads the way in BPO with over 250,000 English speaking workforce employed and is still growing. BPO in the Philippines range from customer service, technical support, sales, travel and hospitality and banking and finance. Filipinos are known for their hospitality and are competent, professional and skilled experts in various fields. With the advent of globalization and the easy internet accessibility, global outsourcing will soon become the best avenue to gain world wide market advantage. Many Filipinos looked at BPO as a serious career and as something that will give them opportunity for growth and better knowledge whether it be by technology, business development or dealing with different types of customers. Constant development in human resource with strict standards to uphold offshore client requirements are seen by how the companies e-reps take care of each call taken.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.OutsourcingOutsourcing.Com.

Business process outsourcing BPO is expanding at a rapid pace and emerging as the top growing industry in Philippines. Philippines is recognized as the second largest BPO destination in Asia- Pacific. It is one of the largest Bpo service provider and is recognized by the world’s recognized brands such as Procter & Gamble, AIG, Shell, J&J, JP Morgan, HSBC, Sun life, Chevron/Texaco, Time Warner, Intel, Alitalia, Navitaire, SPI Technologies, Canon Information technologies, IBM, UPS, AOL, and Citibank to name a few.

Marketing Philippines as Bpo boom destination is currently led by demand for offshore call centers. In 2006, the Philippines raked in offshore service generating revenues of $2.1 billion and moved to third place behind India and china and slightly ahead of Malaysia, to secure the number one spot. To achieve and sustain this rapid economic growth, the Philippine government is offering significant fiscal and non-fiscal incentives to attract foreign direct investment in BPO industry encouraging the investment, as part of the 2006 Investment Priorities Plan.

According to a survey conducted by the U.S.A based Meta group, Philippines was ranked the fourth country among Asian countries on the basis of labor quality and is ranked the number one in terms of availability of knowledge-based jobs and workers worldwide. Low cost and high skills are offered by the islands and they share a language and legal system with the U.S. At present the outsourcing sector employs more than 200,0,00 people and that is still way behind India’s 750,000, but Manila is catching up fast.

For outsourcing sector, the government continued to focus on developing human capital through education and training to keep a steady supply of talent. The outsourcing industry by business process association of Philippines is expected to generate $11 billion market and about 900,000 people to be employed in 2010. Filipinos are recognized as one of the world leading source of IT professionals outside of the US. Filipino programmers are well known for their creative design-skills, technical knowledge, and fluency in English and are also very well known to be hardworking and service-oriented.

The Philippines is one of the best outsource location; many choose Philippines for outsourcing support due to following reasons:

English speaking and highly skilled labor force.
Powerful and reliable telecommunications infrastructure.
Low capital cost of qualified personnel.

In recent years, the Philippines outsourcing has become an attractive offshore destination of choice for call center outsourcing, specializing in customer support. Many leading and multinational companies have used Philippines as a global center for customer service because of Filipinos high level of English proficiency and strong customer orientation. But they may not be as a massive as an offshore provider of web and software services as India.

Philippines hold great promise in the customer service industry. Although India does charge lower price than the Philippines for data encoding work, India charges around $4 (U.S.) and $6 in the Philippines, but most of the multinationals are choosing the Philippines because of the high quality of work.

Over any other Asian workforce, Filipino workforce has the most compelling advantages as an investment destination. Among all the countries, it has the highest literacy rate (94.6%) with higher education priority. With the priority to English that is taught in all schools makes the Philippines the worlds largest English-speaking country and there are some 350,000 graduates enriching the professional pool every year. Today, Philippines as a fastest growing region in the heart of Asia and is located within four hours flying time from major capitals of the region. Philippines is a gateway of international shipping and air lanes being suited for European and American businesses and is the entry point to over 500 million people in ASEAN market.

Philippines lifestyle will discover the best of sun, sea, sand and style in the tropical setting teeming with the best of western amenities. It is also the second home to travelers, who enjoy the company of the warmest people in the region, the country’s openness to varied cultures and also a growing desire to have a global outlook.

As the economic and trade integration with ASEAN free trade agreement has strengthened, Philippines had become the most strategic location for firms that want access to the large ASEAN market by providing vast trade opportunities.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com

Offshore Outsourcing Benefits and their Types

The words Offshore means relocation of business process from one country to another while Outsourcing means movement of internal business process to an external company. Offshore outsourcing means moving business processes to an external company from one country to another company, there by reducing their own domestic employment and domestic investment. The country such as United States and United Kingdom over last few years has a potential affect on increase in IT jobs like data entry, computer programming, functioning, and customer care, where offshore outsourcing has come a long way in a short time by saving time and money.

There are four basic types of offshore outsourcing

1. ITO: Information technology outsourcing.
2. BPO: Business process outsourcing covers things like running call centers, processing insurance claims.
3. Software R&D: Offshore software development.
4. KPO: knowledge process outsourcing covers things that require a higher skill set such as reading X-Rays, performing investment research on stocks and bonds, handling the accounting functions for a business or executing engineering design projects.

Offshore outsourcing has increased a growth strategy and essential revenue for almost every existing corporation. This has become a short term solution and received almost equal benefits by providing services in more efficient and effective time limits. It also has maximum flexibility with your workforce and access to high quality employees.

Strategic Advantages:

1. Flexibility: It applies to several views of relationship with the service provider. Based on work and capability of service provider, we should start with small projects and move to big projects, which create flexibility in the company ensuring the best utilization of the available resources.
2. Cost: The cost of offshore outsourcing is much lower over the market and free up management resources. Offshore outsourcing is the best possible quality at significant cost savings to you in software development side, which builds relationships to add value for your clients.
3. Focus: Time plays valuable resource within the management. Most of the time, the executives spend 80 percent of time managing the details, 20 percent on planning and customer relations. The ratio of this percentage can be reversed by this offshore outsourcing.
4. Rapid Migration to New Technology: Offshore outsourcing uses the latest technologies to serve their international clients. Access to new technologies that might not be used in the company will be gained by the new technologies in short term.
5. Re-deploy Resources Strategically: This lets the internal resources focus on the personal strategic issues related to the business.
6. Exploit the Time Zone Advantage and reap the benefits of 24-hour development cycle: The companies outsource their process to India benefiting 24/7 services to exploit the time zone advantage by providing the customers as and when needed. Offshoring offers better utilization of the multiple time zones.

The success of offshoring outsourcing depends on the above focused benefits that come with it from several perspectives, rather than just a cost effective venture. Offshoring gets the company closer to its global customers thereby providing appropriate services to its regional market and provides customer satisfaction which brings increase in revenue streams for the companies.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.OutsourcingOutsourcing.Com.

BPO (Business process out sourcing) examines the process and deliberates back end administrative functions that are necessary to run the business to both re-engineer and outsourcer theses at the same time. It involves functions such as transaction processing, policy servicing, claims management, HR, finance and compliance to outsourcing company. These outsourcing deals involve multi-year contracts that can run into hundreds of millions of dollars .The outsourcing provider then directs these functions to agree service standards and implements guaranteed cost for task. Some of the BPO contracts call for performance-based pay outs, tying vendor payments to business performance or overall cost savings.

Business Process Offshoring involves the transfer of business tasks (medical transcription) or business processes (call centers) to a low-cost country like India or the Philippines. The communication is conducted over telecom networks and the Internet. Offshoring normally include tasks like transaction processing, accounts processing, credit card processing, call centers, translation, and Medical transcription. Most of this work can be sent without the need for in-person interaction. The support functions of offshoring are still relatively new. The offshoring began with IT/software services in early 1980’s and stepped up in the 1990’s with the Y2K hysteria. With decrease in global economic, offshoring has vaulted ahead as an effective cost-cutting technique that takes advantage of labor price differentials and favorable skill/performance ratios.

Business Process Outsourcing (BPO) provides the transmission of processes along with the associated operational activities and responsibilities, to a third party with guaranteed equal service level, where the client contains a firm grip over vendor for mutual long term success.

Many businesses are provided with the Offshore Outsourcing like low labor costs benefit the businesses with the opportunity to benefit the lower labor costs. Outsourcing is flourishing in increasing product quality or substantially lowering firm and consumer costs.

Outsourcing is a trend that had become common in IT and other industries for services to manage a business covering an array of operations, While in some cases, the entire information management of a company is out sourced including planning, business analysis as well as the installation, management, servicing of the network and workstations. The services include right from finance, banking, insurance, human resources development and training to health care, mortgage and credit card services, asset management, customer care, logistics and distribution, engineering, procurement, real estate, sales and marketing and web-related services.

Outsourcing involves co-ordination between the outsourcer and its client in decision making, which would involve a two way exchange of information.

The process of outsourcing generally encompasses four stages:

1. Strategic thinking, to develop the organization’s philosophy.
2. Evaluation and selection, to decide on the appropriate outsourcing projects and service provider to do it.
3. Contract development, to work out the legal, pricing and service level agreement (SLA) terms.
4. Outsourcing management, to refine the ongoing working relationship between the client and outsourcing service providers.

BPO are categorized into two types of outsourcing: back office outsourcing and front office outsourcing, Front office includes internal business functions such as billing or purchasing, and front office outsourcing includes customer-related services such as marketing or tech support. BPO that is contracted outside a company’s own country is sometimes called offshore outsourcing. BPO that is contracted to a company’s neighboring country is sometimes called nearshore outsourcing.

Reasons for Outsourcing:

Cost savings: This over all cost of service to the business will be low, which involves reducing the scope, defining the quality levels, re-pricing, re-negotiation, cost re-structuring.

Improve quality This will achieve a step change in quality through contracting out the service with a new service level agreement.

Knowledge Access to intellectual property and knowledge.

Customer Pressure. Customers may see benefits in dealing with your company, but are not happy with the performance of certain elements of the business, which they may not see a solution to except through outsourcing.

Commodification The trend of standardizing business processes, IT Services and application services enables the businesses to intelligently buy at the right price.

Time zone A sequential task can be done during normal day shift in different time zones to make it seamlessly available 24×7.

Catalyst for change An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.

Outsourcing success depends on three factors: executive-level support in the client organization for the outsourcing mission; ample communication to affected employees; and the client’s ability to manage its service providers. Both the client and provider sides need a combination of skills in such areas as negotiation, communication, project management, ability to understand the terms and conditions of the contracts and service level agreements (SLAs).

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.OutsourcingOutsourcing.Com.