Outsourcing

This is a strategic move of a company to continuously provide quality service at a lower cost. Since recruitment is an expensive management process, many companies prefer to transfer this activity to a third-party service provider.

Recruitment process outsourcing (RPO) is an effective way of utilizing available third-party services to administer the hiring process. The presence of this type of service gives companies the advantage to focus on other core tasks and decision-making processes. Also, RPO service provider ensures to attract, encourage, and increase the numbers of qualified candidates, thus, giving the company a higher possibility to acquire competitive and proficient employees. Moreover, it makes the entire hiring process simpler and easier.

Exceptional Employee

One of the most vital roles of recruitment process outsourcing is to look for exceptional employees whose skills and proficiencies can be considered as an asset by the company. Each applicant would be thoroughly evaluated for their capacities and respective work ethics. Since these prospective job candidates have the capacity to alter or improve the financial standing of a company, care must be observed in order to know whether the applicant is appropriate for the position.

Recruiting process includes analyzing the applicant’s skills, accomplishments, and character traits to ensure the suitability of the individual for the position. Apart from the technical proficiency and competitiveness, there are other qualities and characteristics that a company seeks in a job candidate.

Here is a list of characteristics that would make you a hiring manager’s top choice.

• Team player. Most employers would hire applicants that are flexible enough to work independently or with a team. A team player looks at obstacles as an opportunity to acquire new knowledge and experiences. Ideally, companies would want an employee who listens, ask suggestions, resolve conflict, and recognize the strength and weakness of team mates. He should also be open-minded and capable of accepting constructive criticisms and opinions from colleagues and his superiors.
• Commitment. In any business, it is equally important to demonstrate loyalty and dedication in one’s tasks. An employee’s commitment to the organization can greatly affect both the individual and team performances. It can also influence the overall productivity, employee retention, and collaboration among employees and other team members.
• Integrity. It is a valuable characteristic that both employees and managers should have. Integrity is often linked with honesty. Thus, it is our ability to make the right decision when faced by a difficult circumstance.
• Enthusiasm. One important trait of an excellent employee is being passionate with his work. Enthusiasm drives you to go an extra mile with your work. Each business will have its pitfalls. Thus, enthusiasm will allow you to overcome any obstacle that hinders your success.

Recruitment process outsourcing is used to optimize search and hiring of employees. It effectively offers companies absolute customer satisfaction and facilitates organizational demands. Service providers use web-based integrated management software that provides real time statistics, work force planning, tailored strategies, and existing employment vacancies. It is considered as one of the most important subsets of business process outsourcing that lessens and mitigates hiring inefficiencies.

Among the advantage of this process are as follows:

• Employers and employee satisfaction
• Recruitment cost reduction
• Compliance and expertise improvement
• Scalability
• Customer satisfaction
• Employee referral improvement
• Employee retention
• Advertising strategy efficiency
• Human resource effectiveness
• Employment planning proposal development
• Enhanced core activities

Early in 1980, Alabang was transformed into a “super city.” The development can be evidently seen through the Filinvest Corporate City and Ayala Land’s Madrigal Business Park. These two large-scale real estate industries gave Muntinlupa City a big transformation and hugely contributed to its progress as new residential villages flourished alongside with the flourishing of industrial, commercial, and business establishments.

According to some of the early dwellers in Alabang, it is one of those places that has solid revenue projects. Currently, it seems to be divided into two sectors now: The elite at the west that includes executive villages, malls and skyscrapers at the corporate city, exclusive academic institutions, banks, hotels, and many others. The “urban” area at the east, meanwhile, is a combination of rural and urban commercial and residential areas that include run-down compounds and “tiangges” or flea markets.

Geographical Location and Landmarks

Alabang is about 22 kilometers South of Metro Manila, located on the Southwestern Coast of Laguna de Bay, bounded on the North by Taguig, on the Northwest by Paranaque, on the West by Las Pinas, on the Southwest by the province of Cavite, South by the Province of Laguna and on the East by Laguna de Bay.

It is normally about 15- to 20-minute drive from Makati via the South Luzon Expressway. But with some construction works at the Skyway Stage 2 Project, it now takes about 40-45 minutes. However, travel time would surely be much less as soon as the Skyway connecting Metro Manila and Alabang is fully done.

Some of the landmarks that made Alabang popular to northern and southern regions are the Alabang Town Center, Festival Supermall, Asian Hospital and Medical Center, Insular Life Towers, Northgate Cyberzone where Information Technology industries are located.

Fortunately, Alabang was developed for integrated purposes and that is for a favorable community lifestyle, allowing residents to enjoy the convenience of modern life without going to Makati or Manila.

In this time and age of business transformation and innovation, the Philippines has become the most-favored destination for outsourcing enterprises with its nominal labor costs, right skill sets, impressively high English proficiency and competency, and cultural and social connection with the United States.

Greater than these are the high-quality talents of Filipinos who are sufficiently competitive and productive in making this nation notable for the giant industry players and sets this apart from other countries. Ostensibly, BPO companies saw administrative flair and leadership skills in Filipinos, giving them an edge over other countries and making the Philippines the ultimate location for their ventures.

Attesting the recognition is the Vice President for Content Operations of the Thompson Reuters Legal, Fred Gordon, who said that the Philippines is most impressive for  “the talent of the people, education, fluency in English, work ethics, young and dynamic workforce, I could go on and on. [The Philippines] is a very special place.”

Meanwhile, Convergys Corporation, one of the top-performing BPO companies in the country, has already produced numerous Filipino marketers and associates who have shown exceptional talents in outsourcing process are now enjoying the lavish life in greener pastures. Its Senior Vice President for Human Resources, Clark Handy, proved that Filipino employees are well-educated, diligent, persistent, English-proficient, and most of all, have an in-depth understanding of International cultures, most primarily in the US. Undoubtedly, Filipinos are the staunchest pillar behind the success of every BPO industry.

The outstanding performance of every Filipino worker gives employers more assurance that they can do their job well. Filipinos have used to put their best foot forward to earn better job results. They would always stay and spend over time in order to accomplish the assigned task and meet the given deadline. Their willingness to spend more hours simply reflects their attitude as hard working individuals.

Thus, the love and passion for work will abridge the working traits of every Filipino. No matter how high or low the compensation is, whether it is a private or public service related job, the intensity of their passion toward work can clearly be seen and felt – from the daunting tasks in the office and up to having good relationship with their colleagues. Indeed, Filipinos spell pride and excellence and they are worthy to be called assets of the country.

There are lots of benefits obtained from hiring offshore staff. These primarily include:

• Gaining access to an unlimited talent base;
• Having the financial advantage with the lower pay scale of offshore staff than local US employees;
• Being relieved of employee recruitment and termination tasks;
• Having the managerial advantage with the absence of legal issues that often exist with regular employees

Considering these benefits, it makes sense why most business owners and entrepreneurs, even those in the first years of business operations, opt to hire offshore staff. Aside from the savings incurred from dismissing most of the HR personnel and accounting staff, businesses enjoy the benefits of delivering products on time and, thus, improving customer service provision.

Despite the benefits provided and the success offered by offshore staff, it should also be noted that a business would not succeed in having offshore staff, alone. It is important to note that every business should still hire in-house employees to perform necessary physical tasks such as working and socializing in person with the clients. Although offshore staff provides faster results, generates more products, and limits personnel, hiring, and training costs, in-house employees provide one significant factor to a business that offshore staff is not able to provide. In-house employees prove a business is real and legit along with a mortar-and-brick facility. Seeing actual and uniformed (if possible) employees will lead customers to think that the business is trustworthy.

Considering the benefits of both offshore and in-house staff, it is safe and helpful to state that there should be a balance in hiring local employees and outsourcing most tasks. Doing so will not only benefit the company itself, it but will also help decrease local unemployment rates.

Business process outsourcing (BPO) companies consider ghostwriting as an important piece to their writing/editing services. With online publishing growing by the day, BPO companies take advantage of blogging and article submissions as a sub-genre to ghostwriting. BPO firms hire writers who will use different nicknames and aliases and write blogs on a specific subject matter. Other companies hire ghostwriters to co-write a book or e-book using the actual name of the person who will be printed on the front cover of the page.

Here are a few notable ghostwriting outsourcing services being practiced by BPO companies:

Press releases (PR) – Ghostwriters also publish press releases promoting a product, service, brand, individual, or company. Unlike writing press releases for newspaper and magazines, ghostwriters submit PR through press release directories such as PR Web. Ghostwriters take on different monikers and submit PRs in different press release directories; thus, protecting the identity of the object being advertised.

Autobiographies – Offshore companies in India and Philippines offer ghostwriting outsourcing services in the autobiography field. Individuals who influenced the world with their contributions in the fields of science, medicine, politics, and sports contract the services of a ghostwriter to author personal autobiographies with a flat rate of $4 per page.

Blogging– Web site or blog owners rely on ghostwriters to update their web page of fresh, unique content every day. Popular on-page optimization requires a ghostwriter with extraordinary writing skills and above average search engine optimization abilities.

E-books – Ghostwriters are popular for their unwavering contributions in the electronic publishing industry. Electronic books or e-books are published via PDF, and ghostwriters customize the content according to client demand.

Research process outsourcing or RPO is a segment of knowledge process outsourcing (KPO) that focuses entirely on research and data gathering. Research activities such as telephone surveys, data gathering through questionnaires and checklists, and interviews are being handled by RPO firms. Aside from that, RPO companies are also providing financial analysis and modeling, competitive intelligence and data search, and company profile preparations.

Advantages of research outsourcing

From past discussions and evaluations, outsourcing, indeed, produces commendable results. Cost reduction, efficient and accurate results, and tasks completed by specialized individuals are one of the major outcomes of outsourcing.

• RPO firms are specialized in gathering, analyzing, and interpreting information; thereby, making them more capable of efficiently performing such tasks.
• Firms have access to competitive professionals who can perform research tasks and well-trained staff to conduct full-scale consumer surveys.
• Objectivity
• Leverage specialized knowledge and expertise.
• Faster turnover
• Firms have the necessary know-how and idea where to find and locate particular information.

Disadvantages

Like any other outsourcing activities, RPO also has some drawbacks. Here are some of them.

• Less control of research/ work
• Ambiguity of projects. Any research tasks that are outsourced must be very specific. Ambiguity (e.g hesitation to provide required information) can only prolong the project process and may even cause delays.
• Outsourcing partners or firms may not have local knowledge of the consumer distinction and behavior as well as available brands in your locale.
• Researchers are focused on utilizing secondary sources such as the internet.

Drawbacks that research outsourcing has can be overcome by planning and careful evaluation of the problem and needed information. It is always important that both sides, the company outsourcing the research tasks and the receiving firm, must collaborate to achieve the optimum results of their efforts. If any of the parties fails to communicate, then, the possibility that the project will not produce accurate results is high.

Preparing to outsource your tasks

But before you run to the phone to inquire for the research outsourcing services of any company, it is important to check the compatibility of the outsourcing company with your needs. Varying situations or needs may require certain or better yet, specific KPO firms to cater to the requirements of your company. Here are some things that you may want to consider before you start to outsource your research projects:

1. Make sure you identify your marketing problems, having a better and clearer perspective of the problem from various angles.

2. Try to be specific with your research objectives. Have an idea on what particular information you are hoping to find out. Also, identify the possible decisions that must be made based on the results of the study.

3. Define your research needs and make sure to write it down. Include the specific requirements and particular parameters of the study. General statement of the problem, research type needed, and the information needed must be specified.

4. Browse and search for possible firms where you can outsource your tasks. Ask colleagues for referrals and make sure to conduct reference checks on the companies of your choice.

5. Assess the company’s capability to render such service. Conduct online researches to see if the company has established a good reputation in the outsourcing industry. Moreover, consider the “chemistry” between you and your chosen research provider.

Research outsourcing activities will greatly benefit organizations that conduct comparatively low research activities. This is because they usually lack the needed and specialized individuals who can conduct the research properly. Moreover, even big companies can gain benefits from outsourcing their market researches as they can gradually trim down their labor cost and lessen their manpower and other overhead expenses.

Research outsourcing may or may not work for you, depending on how you handle and deal with the advantages and disadvantages of each approach. With that, it is best to first know your needs, understand the rules and consequences of outsourcing, and find ways on how you can minimize your expenses while getting the best possible results for your business.

Countries like India, Philippines, Mexico, and Chile are favorite picks among expensive and developed countries in offshoring their services. The outsourcing  industry for most developing countries like India and the Philippines help boost  its economic growth; thus, creates a win-win situation for both investor and outsource provider.

However, there are security risks involved in knowledge process outsourcing that can ultimately invade an investor’s identity. Alongside business process outsourcing (BPO), KPO delivers security risks for companies willing to offshore their services in Asian countries or in nations where employees are underpaid.

In its most common sense, companies that operate as a core unit has the ability to secure its equipment patent, labor principles, and important information. Offshore providers have the privilege to understand a company’s internal operations; thus, revealing confidential data vital for the company’s survival.

Offshore providers are then given access on the company’s records and other significant materials and equipment.

Along with security risks, here are a few hazards that KPO produces:

• Lost of control – Companies cannot freely control their business operations anymore because of the outsource provider. The company loses its control over staff selection, which often derails the company’s competitive edge.

• Low quality of work – A company also loses its power to regulate the quality of work churned by outsource providers. The outsource provider has complete control over the people who will be working on a specific account. Outsourcing companies often hire inexperienced workers to expedite internal processes, which sacrificethe overall work quality.

• Cultural and language barriers – Outsource providers are forced in dealing with diverse cultures and different languages. Internal conflict then arises, further hampering the development of both outsource provider and investor.

Companies need to understand how strategic placement can help reduce KPO-related problems. Carefully studying the offshore provider’s business mantra and its location help secure global partnerships and eliminate internal inefficiencies.

Security is important to any company and outsource providers must never break the trust given by a foreign business partner. Both outsource provider and investor must work hand-in-hand in order to succeed and achieve their corporate goals.

Process transparency is a major barrier to using KPO services. Many organizations do not carefully track which decisions are made by whom, and rely so much on informal social processes (and “soft skills”) that it is unclear how much the use of KPO would disrupt existing operations. However, requirements like Sarbanes-Oxley and radical transparency movements like full cost accounting, shareholder activism and eco-labels and moral purchasing require organizations to be more explicit about when and by whom decisions are made. These trends make it easier for outsourcing non-critical jobs to be considered by qualifying the impact of decisions in advance.

Furthermore, it becomes easier to evaluate and compare success. A fully developed service economy enables KPO by treating all functions as services. So do more technical trends such as service oriented architecture, enterprise application integration and telework; it is easier to outsource a job if it is already being performed outside the head office. Organizations adopting ISO 9000 and ISO 19011 should also find it much easier to integrate externally provided KPO into their operations and audit them on a fair basis.

As of 2007, most US organizations began hiring foreign professionals under H-1 visas to do jobs in the USA for several years, after which they would return to their home countries as managers to train and supervise others, continuing to report to their former business units.

The following is an extract from chapter two of the British Computer Society book ‘Global Services: Moving to a Level Playing Field’ by Mark Kobayashi-Hillary and Dr Richard Sykes attempts to define KPO:

“KPO is merely a continuation of BPO, though with rather more business complexity. The defining difference is that KPO is usually focused on knowledge-intensive business processes that require significant domain expertise (application professionalism in the language of Chapter 1). The offshore team servicing a KPO contract cannot be easily hired overnight, as they must be highly educated and trained, and trusted to take decisions on behalf of the client.

IT outsourcing is strongly focused around technical professionalism, and the migration to business process outsourcing that introduces extra dimensions of application professionalism. Ever more complex services, as implied by KPO, demonstrate this very well. The profile of people being hired to serve within KPO service companies are more diverse than just being drawn from technical IT services – these are people with MBAs, and medical, engineering, design or other specialist business skills. KPO delivers higher value to organizations that offshore their domain-based processes, thereby enhancing the traditional cost– quality paradigm of BPO. The central theme of KPO is to create value for the client by providing business expertise rather than process expertise. So KPO involves a shift from standardized processes to advanced analytical thinking, technical skills and decisive judgment based on experience.”

In addition to the challenges faced by clients, KPO companies themselves have challenges:

• High staff turnover, especially where work is not challenging to the employee’s skills;
• High cost of training and tendency to lose the most experienced employees to the clients and;
• Ensuring the security and confidentiality of information, especially when privacy laws vary from one country to another

Business process outsourcing (BPO) is a form of outsourcing that involves the contracting of the operations and responsibilities of a specific business functions (or processes) to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain.. In contemporary context, it is primarily used to refer to the outsourcing of services.

BPO is typically categorized into back office outsourcing – which includes internal business functions such as human resources or finance and accounting, and front office outsourcing – which includes customer-related services such as contact center services.

BPO contracted outside a company’s country is called offshore outsourcing. BPO that is contracted to a company’s neighboring (or nearby) country is called near shore outsourcing.

Given the proximity of BPO to the information technology industry, it is also categorized as an Information Technology enabled service or ITES. Knowledge process outsourcing(KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry.

Industry

India has revenues of 10.9 billion USD from offshore BPO and 30 billion USD from IT and total BPO (expected in FY 2008). India has some 5-6% share of the total BPO Industry, but a commanding 63% share of the offshore component. This 63% is a drop from the 70% offshore share that India enjoyed last year, despite the industry growing 38% in India last year, other locations like Eastern Europe, Philippines, Morocco, Egypt and South Africa have emerged to take a share of the market. China is also trying to grow from a very small base in this industry.

However, while the BPO industry is expected to continue to grow in India, its market share of the offshore piece is expected to decline. Important centers in India are Bangalore, Hyderabad, Kolkata, Mumbai, Pune, Chennai and New Delhi.

The top five Indian BPO exporters for 2006-2007 according to NASSCOM are Genpact, WNS Global Services, Transworks Information Services, IBM Daksh, and TCS BPO.

According to McKinsey, the global “addressable” BPO market is worth $122 – $154 billion, of which: 35-40 retail banking, 25-35 insurance, 10-12 travel/hospitality, 10-12 auto, 8-10 telecoms, 8 pharmaceutical, 10-15 others and 20-25 is finance, accounting and HR. Moreover, they estimate that 8% of that capacity was utilized as of 2006

BPO Benefits and Limitations

One of the most important advantages of BPO is the way in which it helps to increase a company’s flexibility. However, several sources have different ways in which they perceive organizational flexibility. Therefore business process outsourcing enhances the flexibility of an organization in different ways.

Most services provided by BPO vendors are offered on a fee-for-service basis. This helps a company become more flexible by transforming fixed into variable costs. A variable cost structure helps a company respond to changes in required capacity and does not require a company to invest in assets, thereby making the company more flexible. Outsourcing may provide a firm with increased flexibility in its resource management and may reduce response times to major environmental changes.

Another way in which BPO contributes to a company’s flexibility is that a company is able to focus on its core competencies, without being burdened by the demands of bureaucratic restraints. Key employees are herewith released from performing non-core or administrative processes and can invest more time and energy in building the firm’s core businesses. The key lies in knowing which of the main value drivers to focus on – customer intimacy, product leadership, or operational excellence. Focusing more on one of these drivers may help a company create a competitive edge.

A third way in which BPO increases organizational flexibility is by increasing the speed of business processes. Using techniques such as linear programming can reduce cycle time and inventory levels, which can increase efficiency and cut costs. Supply chain management with the effective use of supply chain partners and business process outsourcing increases the speed of several business processes, such as the throughput in the case of a manufacturing company.

Finally, flexibility is seen as a stage in the organizational life cycle. BPO helped to transform Nortel from a bureaucratic organization into a very agile competitor. A company can gain the advantage of maintaining ambitious growth goals while sidestepping standard business bottlenecks. BPO therefore allows firms to retain their entrepreneurial speed and agility, which they would otherwise sacrifice in order to become efficient as they expanded. It avoids a premature internal transition from its informal entrepreneurial phase to a more bureaucratic mode of operation.

A company may be able to grow at a faster pace as it will be less constrained by large capital expenditures for people or equipment that may take years to amortize, may become outdated or turn out to be a poor match for the company over time.

Although the above-mentioned arguments favor the view that BPO increases the flexibility of organizations, management needs to be careful with the implementation of it as there are a few stumbling blocks, which could counter these advantages. Among problems, which arise in practice are failure to meet service levels, unclear contractual issues, changing requirements and unforeseen charges, and a dependence on the BPO which reduces flexibility. Consequently, these challenges need to be considered before a company decides to engage in business process outsourcing

A further issue is that in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, leverage similar technology stacks, and have similar Quality Improvement approaches.

Threats

Risk is the major drawback with Business Process Outsourcing. Outsourcing of an Information System, for example, can cause security risks both from a communication and from a privacy perspective. For example, security of North American or European company data is more difficult to maintain when accessed or controlled in the Sub-Continent.

From a knowledge perspective, change of attitude in employees, underestimation of running costs and the major risk of losing independence, outsourcing leads to a different relationship between an organization and its contractor.

Risks and threats of outsourcing must therefore be managed, to achieve any benefits. In order to manage outsourcing in a structured way, maximizing positive outcome, and minimizing risks and avoiding any threats, a Business Continuity Management (BCM) model is required. BCM consists of a set of steps, to successfully identify, manage and control the business processes that are, or can be outsourced.

Another framework, more focused on the identification process of potential outsourceable Information Systems, L. Willcocks, M. Lacity and G. Fitzgerald identify several contracting problems companies face, ranging from unclear contract formatting, to a lack of understanding of technical IT- processes.

While the economy is still recovering from recession, outsourcing is still one of the sought-after services today. With various services that have branched out, outsourcing can certainly cater to various needs of your company. May it be for businesses are too general, be specific, information technology, human resource, or even legal tasks, outsourcing definitely has the right services for you.

Areas Commonly Outsourced

Countries that had its fair share of economic downfall, adopted outsourcing branches including Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), and Legal Process Outsourcing (LPO).

Studies reveal that among business applications, the most commonly outsourced tasks are database-related jobs and web site hosting.

Risks in Outsourcing

Outsourcing has its rewards and risks, and companies are aware of the advantages and drawbacks that outsourcing have to offer. Various drawbacks have been associated with outsourcing. Yet, three are considered as the top disadvantages that concerns companies. These are: data security, contract lock- in, and vendor management.

For tertiary education students, leading companies in the IT industry have created different programs in which they can enroll. The programs for college students are Service, Science, Management, and Engineering (SSME) of IBM, Cisco Networking Academy, and Oracle Academy. Students under these programs are required to speak in English, which further helps in the development of their proficiency in the English language.

Aside from the IT industry, leading universities in the country also provide training programs intended for the BPO industry. For instance, De La Salle University (DLSU) Graduate School of Business and Ateneo de Manila Professional School have hosted a training program for supervisors and managers of the BPO industry. The supervisory program for managers could be credited to an MBA degree program, according to Jamea Garcia, executive director for talent development.

“It will cover competencies needed by managers specific to call centers and BPO firms, including leadership skills and performance reviews,” explains by BPAP CEO Oscar Sañez.

English trainings and call center courses are also provided by different establishments and institutions. They are necessary in equipping and familiarizing students with the English language, usage, and accent.

In the programs provided by different companies and universities, the government is also doing half of the job by encouraging foreign investors and firms to establish their businesses in the country. Moreover, the government and the business sector have encouraged the use of English language. In the efforts of the Philippines government to support the rapid growth of the BPO industry, they have granted 100 hour training for interested individuals who wanted to enter the industry. This is in response to the call of the BPO industry to continuously create a steady supply of talents for the industry. Furthermore, this is an effort of the Philippines to target international BPO clientele.

“BPO and e-services are key drivers of the economy, generating investments and jobs, alleviating poverty and improving the lives of the people. We are proud to be among the world’s leaders in these fields,” former President Gloria Macapagal-Arroyo said in an interview.