Guy Kirkwood's BPO Backchat
23 mar 2004
Silicon.com's editor, Tony Hallett is obviously losing patience with politicians who bash offshoring to shore-up their own domestic positions. This hypocrisy is typified by Chancellor Schroeders latest interview, reported by Hallett.
German chancellor Gerhard Schroeder has spoken out against offshoring during an interview with a business leader in Berlin. Speaking at a meeting organised by his Social Democratic party, he called the approach "unpatriotic."
As I have commented before, protectionism doesn't make sense on any level.
22 mar 2004
Well, I suppose that's what happens when you are working on four assignments simultaneously - no blog.
Talking of recruitment, Spherion is up for sale, following the decision by its US parent to divest its overseas operations and focus on the US market.
The divestiture includes its Asia-Pacific, UK and European operations, according to Asia-Pacific head Andrea Galloway.
"The US recruitment market is worth USD80bn and the top five recruiters there only have 15% of the market. There are lots of smaller providers and Spherion believes growth in that market is where it should focus."
Several things occur to me. Firstly, the UK and European operations of Spherion could very well be the bargin of the year. Secondly, the recruitment market, and therefore the whole market must be growing in the US. Thridly, the directors of Spherion must be mad to get rid of their recruitment assets at a time when the European market particularly has turned.
We will return to this when I have spoken to the European management, which I will do over the next few days - stay tuned.
13 mar 2004
We have been busy with the BPO service delivery and sales assignments (which are going great), but for light(?) relief, I have just updated my very sad, geeky recommendations for running a fast, secure and tweaked PC. Please don't read it, it will destroy what little credibility I have with the "business" community! update: It is now 10pm CET and Miles Wolbe has just mentioned the page in his blog.
9 mar 2004
Newly released research from Gartner has fleshed out the figures we all need to impress clients.
BPO is continuing to gain strength in Europe and will grow 4.5% in 2004 to reach EUR25bn. BPO is now the fastest growing segment within business services.
The use of offshore resources as an alternative to domestic BPO is also starting to take off and, by 2007, offshore BPO will account for 14% of the total BPO market, compared with only 1% in 2003.
I think that the offshoring prediction is actually understating the issue, if our clients are to be believed. The attractions of labour arbitrage are obvious to everyone. As a consequence, I predict that Gartner's 14% will be reached within two years, not four.
8 mar 2004
When The Washington Post speaks, we had all better damn-well listen. Stop whatever you are doing and read Jodie Allen's article Maybe We Could All Deliver Pizza. Then read this discussion. There is no better indicator of what the non-pundits in the US are thinking about outsourcing and offshoring.
5 mar 2004
Today's lesson is in trumpet-blowing. We have just, yesterday actually, won an assignment to find the COO for one of the world's largest and most succesful consulting brands.
Some of this "understanding the market" stuff must be rubbing off... toot, toot!
3 mar 2004
It is so easy to get caught-up in the US-centric view of BPO and offshoring that you can miss the effect of the above on other countries. That is why an excellent article by William Pesek, writing on Japan's woes for Bloomberg should grab your attention.
"To compete, Japan's only option may be to adjust its economy in China's direction. It's a provocative suggestion, admittedly, but one that officials here in Tokyo may have to consider. Japan's problem is not unlike Hong Hong's. Its process of integrating with the mainland may leave living standards lower than they are today."
What the US is experiencing today with offshore outsourcing is nothing against what Japan's experience will be.
2 mar 2004
According to CCH, as pressure to reduce HR costs continues, measuring savings remains a struggle. 76% of HR departments are under pressure to reduce costs in 2004, but few know how to best measure savings.
Firms believe they have made HR savings by increasing the use of or implementing new technologies (61%), redesigning specific HR processes (56%) and developing or expanding benefits-related self-service initiatives (54%). Firms also indicate that future savings in HR will come from a greater use of technology (72%) and self-service (70%), as well as process redesign (68%).
All of these figures are indicative that HRO could provide huge benefits to HR departments. Does this mean that inertia in the market will be less of an issue? Let's see what happens over the next couple of months. (Actually, I intend to write a longer BPO Note on this subject later in the month).
1 mar 2004
In what is set to become a battleground in the run-up to the Presidential elections in November, some powerful trade groups in the US have formed a coalition to beat back federal legislation that would restrict offshoring by government contractors and limit visas for non-American workers with technology skills.
As reported by Dow Jones, the group calling itself the Coalition for Economic Growth and American Jobs, comprises amongst others: the US Chamber of Commerce, the Business Roundtable, the American Bankers Association, the National Association of Manufacturers and the Information Technology Association of America - as well as individual companies.
The US has always been prone to protectionist policies. In a closely fought election year, when the incumbent President's focus is on foreign policy, I predict that the outsourcing market is in for a bumpy ride. Anything that acts as an emollient is good news for US outsourcers and good news also for European suppliers with US-based clients.
Oh, by the way, last month's blogs have not suddenly gone out of date, if you missed any, they are worth reading. Also check the archive.