Laguna Personnel Outsourcing, a service contractor for remote/virtual personnel, back-office support since 2010, and Tru29 Solutions Inc., an Outsourcing Corporation designing outsourced solutions to meet the business needs of its clients today agreed and a handshake on a strategic partnership between the two organizations with a signing of a Memorandum of Agreement held at Tru29’s Corporate Office in One Corporate Center, Ortigas Center, Pasig City Philippines on 18-Nov-2020. The two businesses are respected and leaders in their domains and plan to jointly go-to-market strategy to offer complete outsourcing solutions from Business Processing, Knowledge Processing, Legal Processing, Front Office Facing Customer, and other outsourced solutions. This approach is aimed at simplifying and lowering outsourcing costs. One of the challenges of any business especially the SME’s looking for outsourced solutions is a low cost per hour or fixed-rate scheme with no minimum headcount requirement. In order to overcome this challenge, the two companies will work together and exchange information to reduce outsourcing costs to help SMEs, start-ups grow and optimize, grow their business scale fast. Tru29 Solutions Managing Director Brett Dela Paz commented: “The new strategic partnership will bundle and provide a one-stop solution for startups and SMEs.” “With the pandemic affecting a lot of SMEs and start-ups we see a tremendous need from the market for a low cost, low offering outsourced solution. Expect with this Strategic Partnership will have a positive impact on both organizations. Brett and I have known each other since 2005 and there is a great business, technical and personal synergy between us which will greatly contribute to the success of the partnership.” Mark Cuesta – Founder and CEO of Laguna Personel Outsourcing. About Tru29 Solutions Inc. Tru29 Solutions has broad experience in Front Office Solutions, Back Office Solutions, Knowledge Process Solutions, and even customized outsourcing solutions since its conceptualization in 2008. About Laguna Personnel Outsourcing LPO Philippines specialty is lead research/generation and back-office business processing since its birth in 2010. It all started with one desktop computer, a cheap noise-canceling headset, and an internet connection with a speed of a dial-up at home.
US President Joe Biden’s policy on outsourcing
What are US President Joe Biden’s plans and policies when it comes to outsourcing and offshoring? And how will they affect the US economy and the Business Process Outsourcing (BPO) sector? Americans have decided: Joe Biden is the United States’ next president. While some are taking this time to celebrate – or commiserate, others are already looking into the global economic effects of Biden’s win. President Joe Biden’s outsourcing and offshoring policies During the campaign period, Biden attacked incumbent President Donald Trump’s current policies and apparent inactivity regarding offshoring. On his official website, Biden in September released his administration’s plans to fix America’s outsourcing policies. They have two “bold steps,” namely: Establishing a Biden Offshoring Tax Penalty and Biden “Made in America” Tax Credit, and closing the Trump Offshoring Loopholes; and Signing a series of executive actions to ensure that the federal government is using taxpayer dollars to Buy American products and supporting American supply chains. This means that: Biden’s Offshoring Tax Penalty is establishing a 28% corporate tax rate plus a 10% Offshoring Penalty surtax. This surtax will apply to call centers or companies located overseas but located in the United States. The Biden-Harris policy will reward those who invest in the United States. Joe Biden versus Donald Trump on outsourcing and offshoring Donald Trump, when newly elected to office in 2016, was strongly opposed to outsourcing. This is not an uncommon stance of most presidential candidates as there is a common popular perception that ‘outsourcing takes local (US) jobs’. As a Republican, Donald Trump vowed to ‘bring back jobs’, and to ‘make America Great again’. During his four-year term, Donald Trump’s approach to international trade was driven to a large extent by his belief that other countries are unfairly treating the United States. In that time, he has generally weakened existing international trade alliances, increased tariffs, and created an almost all-out trade war with China. Generally, he has had a deleterious effect on international trade, however, he has not directly focused on, or curtailed outsourcing, as he had initially promised. From the beginning, Donald Trump threatened to penalize American companies that outsourced, and increase taxation for those outsourcing to support this. However, nothing of any material consequence had emerged over his term. In fact, Joe Biden is now vowing to pursue tax reforms designed to undo measures included in Donald Trump’s 2017 tax cut legislation that he claims reduces the impetus for companies to bring jobs back to the US. In a US Democratic presidential campaign speech on 9 September 2020, Joe Biden went on the offensive over what he saw as President Donald Trump’s broken promises on reducing US outsourcing and offshoring. Biden said of Trump: “Offshoring, outsourcing, Buy American. These are areas where Donald Trump’s record has not been remotely matched by the reality”. Joe Biden, after winning the election, has promised to be more conciliatory than Trump, to once again unite the United States and try to reverse the current cultural and political polarisation. He is more politically seasoned and astute in diplomacy, and so is likely to try and repair global trade and international relations instead of destroying them. It seems that Biden is motivated to build a more harmonious globalized economy and international relations, however, that doesn’t mean that Biden is a fan of outsourcing – far from it. It is worth noting that Joe Biden has not spoken about the issue of outsourcing as much in his 2020 presidential campaign, but he is no stranger to the topic. Biden was considerably more outspoken about outsourcing during his term as Barack Obama’s vice president from 2008-2016 – and it is clear that he is no fan. The United States and the Philippine offshoring industry It is no secret that a large number of American companies outsource a part of their business functions to Business Process Outsourcing (BPO) companies in the Philippines. America and the Philippines have a longstanding political, cultural, and trade alliance dating back many decades. One indirect result is that the Asian-based Philippines has a uniquely English-speaking disposition. Despite their Southeast Asian appearances, Filipinos largely speak in American-English, do business in English and eagerly consume and align themselves with American-English culture: Netflix, YouTube, NBA, Pizza, and so on. America’s enterprises started outsourcing its backend functions to the Philippines almost 30 years ago. The country’s BPO industry has since blossomed and now employs 1.3 million highly educated white-collar workers, ranging from call center agents and bookkeepers to engineers and telehealthcare providers, to data scientists and developers. The above-mentioned policies, it is likely to negatively affect the Philippines’ outsourcing industry in the short to medium term. As American companies struggle to come to terms with COVID-19’s economic catastrophe, they need all the help they can get to cut costs and seek operational efficiencies – just to survive. If the opportunity of cost-efficient offshore staffing is taken away from these struggling businesses, then it will further damage their chances of repair and regrowth. In short, prohibiting or taking more taxes from companies that outsource may result in the closure of operations, and further determination of the economy, which will only add to America’s problems. We’re hoping that the Biden-Harris administration is not blind to the downsides of a Trump-Esque ‘America only’ approach to international trade policy. The world is more efficient if it acts as one giant marketplace with limited taxes tariffs and friction, instead of small independent isolated silos. The world and all of its citizens stand to benefit from increased and fairer trade with other countries, so we can only hope that Biden is cognizant of the far-reaching negative consequences of abruptly “ending” outsourcing for the US companies, employees, and communities that greatly benefit from it. Joe Biden on the Philippines Asia more generally, is seen to benefit from Joe Biden’s presidency due to the likely de-escalation of Donald Trump’s ‘trade war’ threats and posturing. For the Philippines, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said that the country can benefit from Biden’s push for the institution of additional US government spending. The newly-elected president’s preference for renewable power is also seen to positively affect the
How Outsourcing Practices Are Changing in 2020: an Industry Insight
Key Takeaways The outsourcing industry will transform this year with a major emphasis on building value networks with outsourcing companies. Co-sourcing will become the new norm as businesses choose to support each other and share the risks. The IT sector will benefit. SMBs and startups will be the ones offering more business to outsourcing service providers. The majority of the firms will shy away from backsourcing and rely on outsourcing in the long run. There is a new kind of outsourcing practice called outcome-based outsourcing as companies look for service integrators instead of service providers. Dominating outsourcing countries face challenges from countries like Poland, Romania, Belarus, etc. New digital execution approaches will be created by the outsourcing companies to integrate strategies across digital platforms. What has changed with the outsourcing industry in 2020? Has it become more disruptive? How far have automation and robotics taken over the industry? Is it still wise to outsource in 2020 or not? And more importantly… Are the current outsourcing practices enough to succeed, now that the pandemic has affected all aspects of my business? These questions were on my mind for quite some time and as the global pandemic brought everything to a standstill, these questions started nagging me even more. I’m sure any IT leader or organization outsourcing or planning to outsource IT services (or hiring remote developers, working with dedicated teams, product development, or any other business process), must be considering these questions too. Here’s an approach I took to find answers to all these questions and calm down my anxious nerves! I started by searching for uncertainties surrounding the outsourcing industry in 2020 and found this report by Global Industry Analysts. It points to brighter days ahead for the outsourcing industry—predicting the market to reach the $220 billion mark in 2020! This helped eliminate my concerns about outsourcing this year to a certain degree, but it didn’t answer the questions I have about the outsourcing best practices in 2020, especially once all this global unrest is over. Then, I surveyed outsourcing trends to date, searched the web, and studied a number of case studies and reports to come to a conclusion. There are certain trends that are expected to take a complete turn after the lockdown, and digital transformation or business automation will be a popularly-adopted strategy. Outsourcing, especially IT outsourcing, has been completely shaken up. For enterprises to ride the wave of change and emerge on the other side, shifting gears today with the latest outsourcing practices is imperative. This is my analysis of how the outsourcing industry has changed in 2020 and what might happen in the future. Emphasis on building relationship networks has strengthened IT companies have been moving toward digital transformation and so has the outsourcing industry. By the end of 2020, we can hope to see a shift from the traditional value chain to a more flexible and scalable value network. In fact, building value networks has become a priority for many businesses in 2020. But what does value network mean in outsourcing? Value networks are connections you build to create value for your company or its processes. A value network in outsourcing would mean building a network of meaningful relationships or contracts with outsourcing companies in India, China, Ukraine, or any other country (even your home country) to add value to the outsourced or outsourcing services. You can expect to see different types of relationship networks. A purchasing network, where two or more firms will come together to leverage outsourced services for saving costs A service provider network, where different outsourcing service providers will come together to meet the complex demands and challenges A single enterprise might also look to hire remote developers from different service providers in order to improve their outcome. And that’s not all. I have spoken to several companies that have been outsourcing IT services, product development, or web development for a long time. The majority of them plan to explore the multi-vendor approach, especially for IT outsourcing. In the IT industry, multi-vendor outsourcing is all about outsourcing different aspects of their IT services to different companies. It will be like getting the IT architecture, microservices, cloud services, AI, ML services, and all other development or designing services from different companies to get the best from all. Businesses wouldn’t want to put all their eggs in the same basket if something similar happens in the future. Multi-vendor outsourcing means they can upend the drastic effect that such unrest might cause. Growing inclination toward co-sourcing Outsourcing is a buyer-centered market. The buyer, (the company taking outsourcing services), identifies all its requirements in an RFP. The seller, (the outsourcing company), feels it can fulfill the requirements and bids for the work. The price, tenure, team, technology, skills, everything is proposed per the requirements of the buyer. The services are for the buyer and so are the risks associated with it. But studying the trends in outsourcing for the past few months and analyzing the current global situation, it is clear that the focus is moving from just cutting costs to mitigating the risks associated with outsourcing. And based on the way the outsourcing commitments are taking shape, a new approach is emerging—an approach that focuses on creating value for both the companies (the outsourcing service provider and the client or IT leader). We call this approach “co-sourcing.” What is co-sourcing? This is an approach where companies hire an external team that acts as their internal team and the two parties work in collaboration. Both the internal and external teams work together, side-by-side to create value. Together, they share the risks, face issues, and come up with quick solutions. Motivating both the parties, co-sourcing will help improve the IT outcome achieved from outsourcing. This approach vests its interests in co-creating new values to gain a competitive edge. Even during unrest, they can easily go through their contract and ensure that the work is not hampered. Their interests will be focused on the outcome of the collaboration and not in
