obat aborsi Wonogiri wa 082135199655 jual obat aborsi cytotec asli di Wonogiri
TATW_26_November_Presentation The Globalisation of Business Services
1. Department of Human Resource Management
From Boom to Where? The Globalisation
of Business Services in the Aftermath of
Financial Crisis and Recession
Professor Phil Taylor
Talking Across the World 4th Conference
De la Salle University, Manila, Philippines
26 November 2010
2. Department of Human Resource Management
Introduction
• Since 2007 profound change and continuity in call
centre offshoring
• Financial crisis of 2007 onwards and recession in the
developed countries
• Inevitable impact when US accounts for 60% of
volume of offshored BPO, UK 22% in India
• Also BFSI accounts for 50.3% of BPO activity
• The global sourcing landscape? 2007 India dominant,
Philippines a long way second, S.Africa and ‘also rans’
• Effects on dynamics of global sourcing? Levels of
demand, services offshored, work organisation, HRM,
ER, nature of skills required, employees’ experiences
3. Department of Human Resource Management
• Tension between spatial mobility and spatial fixity
(Harvey) – how has this played out in practice?
• No matter how weightless capital flows have to
end up somewhere and become ‘fixed’ in a place
• Indeed, globalisation actually heightens the
importance of place rather than eroding it
• Particularly labour characteristics - skill and cost -
and infrastructural, political, regulatory factors etc.
• Companies make locational decisions on the basis
of an ensemble of factors – not cost alone
• A highly ‘qualified race to the bottom’
4. Department of Human Resource Management
Essential Characteristics of Call Centres
• Transforms the loci and processes of interactive
service work – differences with back-office work
• ACDs routing calls within and between centres
• Call centres resulted from economies of scale
centralising hitherto dispersed servicing operations
• Not necessary to have customers in physical
proximity to servicing
• In UK clusters in lower-cost regions and cities
• Overseas migration represents an extension at a
transnational scale of the same cost-saving, profit-
maximising spatial dynamic at national scale
• Linguistic compatibility and locutional competence
5. Department of Human Resource Management
Development of Global Service Delivery
• Relocation of business services from developed to
developing countries increasingly a core element in cost-
reduction, restructuring, re-engineering programmes
• Tactical or responsive outsourcing to strategic or even
‘transformational’ offshoring
• Further development of global service delivery model
• Variable mixes of onshore, offshore, nearshore sourcing
– ‘rightshoring’ and ‘homeshoring’
• Global service delivery not rhetoric but unfolding change
in the geography of sourcing and servicing supply chains
• Not one-to-one migratory flows, but increasingly multi-
locational, multi-site strategies from supply and demand
6. Department of Human Resource Management
• Capitalise on differing mixes of accessible skills and
resources in diverse locations
• e.g. firm seeking lower-cost solutions may source
simultaneously English-speaking voice from India or
Philippines, Spanish from Mexico/Latin America, IT,
technical and multi-lingual from E. Europe etc.
• Cluster footprints – primary + secondary locations
• Functional mixes, reduced risk, different time zones
• Clearly related to scale of demand
• For some firms only a single-country strategy needed
• ‘Best fit’ or ‘horses for courses’
• But global sourcing doesn’t mean a level playing field
• Sourcing world is not flat à la Friedman but uneven
8. Department of Human Resource Management
Global Sourcing Geographies - India
• India historically the most important destination for
global relocation of business services
• Nasscom (2010) claims 51% of sourcing demand
• No need to reprise the its history and development
• Relevant that fastest growth in the early 2000s in
the wake of the crash of the dotcom boom
• Rapid growth created HR problems (recruitment,
retention, training, attrition) and labour supply
• Legacy of overheating in Tier 1 and Tier 2 cities
• Still impacts on operational capacity
• From BFSI to greater sectoral diversification
9. Department of Human Resource Management
Year BPO Employment % rate of growth
2002 107,000 n/a
2003 171,000 59.8
2004 216,000 26.3
2005 316,000 46.3
2006 409,000 29.4
2007 553,000 35.2
2008 704,000 27.3
2009 738,000 4.6
2010 768,000 (est) 4.1
Growth of Employment in Indian BPO
Sources: Nasscom (2002-2010)
10. Department of Human Resource Management
• But these figures are for BPO and not call centres
• Early 2000s call centre amounted to 65% of BPO
• Now 40-50% is voice so less than 400,000
• Proportion of voice work declined as Philippines has
demonstrated recent comparative advantage
• Majority of Indian third-party vendors have located in
the Philippines – reduce risk, multi-source, clients
• Nasscom (2010: 50) ‘India has consolidated its
position as an IT and non-voice hub while Philippines
is focusing on voice services’.
• Nasscom BPO Conference (June 2010) ‘We can
learn from the Philippines. How did they achieve it?’
(S. Nagarajan, 24/7)
11. Department of Human Resource Management
Global Sourcing Geographies – Philippines
• India and Philippines overwhelmingly the most
important destination for remote contact centres
• Everest – 15% of offshore BPO market
• End 2009 figures – total BPO ~ 442,164 employees
• Contact centres – 280,000 – 23% growth year
• Growth far faster than India - 46% GAGR since 2004
• Engages overwhelmingly with the US market given
historical ties and cultural empathy
• Yet, UK workflows are increasingly migrating to the
Philippines (T-mobile, Barclays)
• Both captives and global third-party providers
12. Department of Human Resource Management
“In standalone voice business, the Philippines will
undoubtedly beat India this year to become the call
centre capital of the world,”
Nikhil Rajpal, Everest Research India
• India - $5.58 bn. voice-based revenues 2010
• Philippines $5.70 bn. voice-based revenues 2010
• Economic Times – 4 November 2010
• Cautious regarding consultants’ hyperbole because
of their own economic interests
• Nevertheless the trends are unmistakable
13. Department of Human Resource Management
Other Global Sourcing Geographies
• South Africa – not fulfilled its promise
• Sheer range of locations in global landscape
• Great caution with A.T. Kearney and ‘Global
Services Index’ ranking top 50 locations
• Conflates ‘IT, contact centres and back-office’
• Kearney a blunt instrument for evaluating locations
for voice services
• Do not show relative importance in term scalability,
workforce size, maturity, complexities of linguistic
capability, soft skills etc.
• 2009 Rankings – Philippines 7, Thailand 8
14. Department of Human Resource Management
• Emergence of Latin America as important
• Mixed fortunes of CEE countries – 2004 Czech
Republic, Slovakia hailed as potential global leaders
• Problems over depth of labour pool at highest end
• Repeating hyperbole for Bulgaria and Rumania
• Lithuania 21st in Kearney but very insignificant
• Middle East and North Africa have also emerged
• Egypt the most compelling destination providing
high and low-end services in voice and non-voice
• Offshoring still largely an Anglophonic phenomenon
• Call centres cannot just be located anywhere
15. Department of Human Resource Management
Scotland: A Case of Onshoring and Nearshoring
• Still overwhelming bulk of voice delivered onshore
• 1 m. in UK, 86,000 in Scotland – still growth
• Progress as a nearshore destination within global
service model – 12% dedicated foreign language
• Dynamism of its domestic outsourcing
• Costs relatively lower than London/ S.East plus
technical ability, tacit knowledge, skills, depth
• ‘Offshoring may be good for mundane calls, but as soon as calls require
greater complexity beyond the script there are problems. I use the
Guinness analogy of the white head and the black body. Agents in India
can deal with the froth but cannot go deep into the body of the call.’
• Indian BPO companies in Scotland and UK- TCS,
Hinduja, First Source, Intelenet, Hero-ITES etc.
16. Impact of Recession in UK:
Employers’ Cost Reduction Strategies
Domestic
Outsourcing
Overseas
Offshoring
Automation
Intensification
and Lean
17. Department of Human Resource Management
Context to Recession in India
• Context – enormous recruitment challenges
• 15 years English education doesn’t necessarily equip
graduates with linguistic nuance/cultural compatibility
• Nasscom (2010: 178) ‘while India has an ample
supply of talent, it is largely trainable and not
employable’.
• Attrition at the firm level ‘job hopping’ and exit
• Enormous commitment of resources to training
• Systemic labour shortages and overheating in Tier 1
cities – 90% of services delivered from 7 locations
• Rising labour costs at 10-15% per annum officially
but higher especially amongst managers and TLs
18. Department of Human Resource Management
Impact of Recession
• 2009 contradictory evaluations – pessimistic and
optimistic scenarios – industry leaders divided
Pessimistic
• CEO of HCL described the industry as in ‘a dark
tunnel’ and ‘clients telling us they are in trouble’
• Gartner – ‘no return to normal’ in BFSI
• Falling volumes, price and contract re-negotiation,
little prospect of new projects
Optimistic
• Intense pressure to cut costs in developed world
• Increased migration of services
19. Department of Human Resource Management
• Empirical evidence – IT more affected by BPO
• Call centre/BPO demand slowed from Autumn
2008 but began to revive in late 2009
• Most significantly the impact on HRM and labour
utilisation policies
- freezes on salaries and in some cases cuts
- reduction or removal of bonuses and add-ons
- systematic use of ‘the bench’
- Performance Management and increased targets
- weeding out of ‘underperformers’
- often extension to working time or Saturdays
- unpaid extra time
- fewer ‘fun’ activities
20. Department of Human Resource Management
• Ramadorai (CEO, TCS) recession a blessing in
disguise ‘forcing us to be more efficient’
• Need to reduce costs by 20-30 per cent
• Managers reported recession had solved ‘attrition,
attendance and behaviour problems’ at a stroke
• Whip of the market not HRM intervention
• Intensification of effort
‘…companies are moving to a lean system. It’s like if
I can sum it up, if 12 people were required for a
process, I would now look at 8 people doing that
process. There is no flab, no extra cover, no buffer’
• Workers keeping their heads down
21. Department of Human Resource Management
Global Value Chain
Micro
Workplace level, targets,
Performance Management
Intensification of work,
closed ‘porosity’, stress
Meso
SLAs, KPIs, metrics - determined
above implemented below
Reviewed, tightened
Macro
Economy –global, national,
sector, firm
Cost-cutting, efficiencies
22. Department of Human Resource Management
The Performance Management Bell Curve
10% 10%
15% 15%
50%
Serious under
performance
Below
expectations
Meets
expectations
Above
expectations
Excellent
performance
23. Department of Human Resource Management
Following Recession – Modest Revival
• Revival of demand – contrast with Philippines
• Employees putting their heads above the parapet
• Rising attrition – the return of the problem
• Evidence widespread e.g. Infosys in Bangalore
June - 1,500 jobs – impacts on local labour market
• Restarts recruitment, training, retention, attrition cycle
• Professional identity strong but treatment by firms
has led to some erosion and attitudinal change
• But work intensification measures remain in place
• Fundamental problem of labour supply and demand
• Questions of applicability to the Philippines?
24. Department of Human Resource Management
Conclusions
• Call centre offshoring trajectory not pre-determined
• Crisis in developed countries far from over – depth
and longevity underestimated – early stages of OS
• Cost cutting as a corporate obsession will continue
• Protectionism unlikely to impact despite political
pressures at home – Obama and First Source
• Will difficulties of India be replicated in Philippines?
• Seamless substitutability of voice services cannot
be assumed – tacit complexity understated
• Employees cannot be treated as passive objects of
globalisation – agents who shape geographies of
service delivery, independent representation
