case study about Ventus business process outsourcing

1. VENTUS AND BUSINESS
PROCESS
OUTSOURCING
PRESENTED BY:
ADITYA RAMAN(264)
RIPUDAMAN SINGH(270)
MADHAV VAKHARIA(277)
AMEET ROY (157)

2. Content
• Overview
• Venture story
• Factors for success
• The Impact of the Global Financial Crisis on
Outsourcing
• Challenges
• Major Competitors
• Questions

3. Introduction
• ePLDT Ventus (Ventus), the outsourcing arm of Philippine Long Distance Telephone
Company(PLDT)
• Ventus has grown to become the largest Filipino-owned call center in the Philippines,
with over 6000 employees, seven locations, and revenues in excess of $120 million.
• In 2006 it had over 120 companies and over 1,45,000 employees.

4. • Call center revenues increased annually by over 30% since 2001
• Ranked top 10 in A.T. Kearney’s Global Services Location Index since
2004
• Philippine experienced a surge in the number of foreign companies that
established footprint in Philippines

5. Ventus story
• Started its operation in March 2002
• 2005, Philippine Long Distance Telephone Company (PLDT) merged
with Parlance and Vocative to form a single global brand
• Value created based on cost savings, service level quality, and
process improvements

6. Factors for success
• Benefited from the explosive growth of international
outsourcing.
• Ventus has smartly leveraged the resources of the PLDT.
• Ventus is arguably one of the best led companies in the call
center industry in Philippines.
• Leadership team have created a culture that stresses
professionalism, high quality service, attention to customer
needs and strong camaraderie among employees.

7. The Impact of the Global Financial
Crisis on Outsourcing
• Hardship placed on companies that fuel growth for Ventus
• Consolidation in industries: Philippines emerges as primary beneficiary
• Changes in labor cost arbitrage dynamics of international outsourcing

8. Challenges
• Expansion into the Data Segment
• Market, Customer, and Geographic Diversification
• Supporting Current Customers

9. Major companies in Philippines
 The country had 3.556 million main lines in use in 2011. The country
had 1.722 million fixed broadband subscribers in 2010.
Fixed line operators
 Bayan Telecommunications
 Digital Telecommunications
 Eastern Communications
 Globe Telecom
 Philippine Long Distance Telephone Company
 Philippine Telegraph and Telephone Company
 Pilipino Telephone Corporation
 Midsayap Communication System Corporation

10. Mobile operators
 Globe Handyphone (Ayala Corporation)
 Smart Communications (PLDT)
 Sun Cellular (Digital Mobile Philippines, Inc.)
 Extelcom (Express Telecommunications, Inc.)

11. 1.1 What factors explain the growth of the
Philippine call center industry in general and
ePLDT Ventus in particular?
Philippine call center industry growth
• Results of a general trend in cost reduction and outsourcing.
• The market of labour has become more global and in particular, anything that is
digital can move easily across borders,
• A country with english speaking people , high rates of college graduates looking for
work, and a population familiar with American culture.

12. ePLDT Ventus growth
• The company had the advantage of having the
technology in place.
• Ventus enjoyed from PLDT reputation as a good
employer.
• The company benefited from a strong and stable
leadership team.
• Partnerships with major U.S. clients promoted credibility
and visibility.

13. 1.2 What current role(s) do business process outsourcers
(including call centers like Ventus) play in the global
supply chain for services? What additional roles can
these outsourcers play in the future?
Bussiness process outsourcers reduce over all cost in the global supply chain and in some
cases provide a degree of supply diversification when multiple sources are used.
• The current services provided by ventus and others will probably expand in the future in
the high value added services such as:-
1. Back-office transactions (Accounting, Finance and HR services)
2. Medical and legal transcription
3. Animation,
4. Engineering design
5. Software development
6. Digital content development and support

14. 2. What will be the best path for growth for Ventus?
Evaluate the various options discussed in the case.
What path would you recommend Ventus take? Why?
• The two basic choices facing Ventus are to continue in the voice
services business or to grow the data process component of the
company.
• There doesn’t seem to be any reason why Ventus can’t do both.
• The company has established itself as a leader in call centers, and
has an infrastructure in place to continue this business line.
• Using its existing technology it has been able to leverage itself into
this market which is expected to continue to grow for the
foreseeable future.

15. • At the same time, the higher value back office services are already
being done through the acquisition of SPI and these services will grow
in demand as well.
• The Philippines has a favourable business environment for such
services and this appears to be a good opportunity to expand into a
more profitable business line.
• While the core competencies are not the same in both businesses, the
acquisition of SPI has presumably brought some needed
competencies and these competencies can be expanded.

16. 2.2 What will be the best path for growth for Ventus?
Evaluate the various options discussed in the case.
What path would you recommend Ventus take?
Why?
Market, Customer and Geographic Diversification
Ventus should continue to grow in its domestic market and
remains committed to the U.S. market and its current customers.
However, the company needs to build a diversified customer
base.
Ventus should attract clients from different sectors in order to
reduce risk, since different industries suffer different impacts
from crisis.

17. • The company needs to have a better mix between
B2C and B2B customers, since the latter is less affected
by the recession.
• Find new markets and evaluate them as possible
destinations to build new facilities, acquire competitors
or establish partnerships.
• Formation of a sales team that will cover various
geographic and industry segments in the U.S.

18. 3.1 How should Ventus address the
emerging challenges that could potentially
derail its growth?
• Ventus faces a number of current challenges:
 The recession affected present and potential clients of Ventus
 The crisis also led companies with outsourcing plans to cancel or put programs on hold
because of increasing funding difficulties, management turnover and lack of business
visibility.
 Trend to consolidation of global service supply chains to fewer locations or sell off
captive operations to other providers.
 Increase in U.S. unemployment has changed the labor cost so some customers are
repatriating work back to the U.S., demanding price concessions from offshore
providers, or increasing service-level requirements.

19. 3.2 What other challenges are likely to
emerge?
• New challenges may include:
 the labour market is getting tighter in the Philippines as the country experiences
unexpected economic growth
 more competition has entered the market.
• The Philippines already competes with India, Eastern Europe, the Caribbean, and
other places for call center operations, and now some foreign companies are setting
up call center operations in the Philippines.
 consumer backlash from job outsourcing as the practice becomes increasingly
popular
 newer technologies in voice recognition that require less need for human voice
services.

20. 3.3 How should Ventus deal with these
additional challenges?
• Ventus can best handle the current and future challenges by continuing to
manage its operations as a first-rate source for voice services and diversify into
other business services.
• Ventus has a good record of management and is the preferred employer among
potential call center employees.

21. • Greater training and accent reduction can decrease the perception that customers are
calling the Philippines.
 Most of the unhappiness with offshoring of voice services comes from language
difficulties and misunderstandings.
 These problems can be addressed through training.
• This addresses the problem of competition, although it will continue to be a threat, but the
problem of increasing technologies may reduce overall demand for human voice
services.
 Diversifying into other back office operations reduces the risk of technology eliminating
business.