Strategic alliance

Michael Alan Hamlin

Posted on September 7, 2006

“Together, we all gain…”

Representatives of the Business Processing Association of the Philippines (BPA/P) and India’s National Association of Software & Services Companies, more popularly known by its NASSCOM acronym, are meeting in Manila this week. On Monday, the two private-sector associations signed a Memorandum of Agreement (MOU) as the first step in undertaking collaborative efforts to contribute to sustained growth of the business process outsourcing industry (BPO).

BPA/P is modeled in many respects after NASSCOM. The Indian association was formed 15 years ago to advise government officials on strategies to facilitate growth of the industry. It now serves as a virtual chamber of commerce for its 950 members, and is probably best-known outside India for the work it has done to promote India as a center for software development and other technology-based services.

BPA/P is taking on the same role for its members. Representatives are involved in joint private- and public-sector efforts to improve educational infrastructure, attract investors, and strengthen the business-friendly orientation of government. An alliance with NASSCOM will serve to strengthen BPA/P’s initiatives in key strategic areas of support for the BPO industry. The MOU formalizes collaborative in seven such areas.

1. Strategic Communications
Strategic communications chiefly involves communicating the benefits of liberalization in general and outsourcing of business processes in particular. Communication channels include conferences and meetings, media, and networking with influential individuals and institutions. Conferences are likely to involve NASSCOM’s annual conference in February, which is closely followed by e-Services Philippines, organized by the Center for International Trade Expositions & Missions (CITEM) of the Department of Trade and Industry (DTI) in cooperation with BPA/P. Support for Cebu’s annual BPO conference in June is also anticipated.

The two associations also plan to collaborate in efforts to lobby influential individuals, institutions, and organizations whose work impacts development of the BPO industries in the Philippines and India. These efforts might be directed toward individual legislators, government agencies, and business associations in key markets such as North America and the EU.

2. Geographic risk mitigation
Geographic risk mitigation is an increasingly important concern for investors in BPO services. It refers to efforts to hedge political, social and cultural, and other risks such as costs and labor availability. Conceptually, BPA/P & NASSCOM can offer the Philippines and India as a “geographic risk-mitigation package.” That’s a powerful incentive, because it offers the combined benefits of the two leading offshore BPO services centers.

3. Shared Best Practices and Adherence to International Standards

A core concern for NASSCOM and BPA/P is professional standards. Shared best practices involves institutionalizing management principles and practices in the areas of employee retention, customer satisfaction, code of conduct, and quality and efficiency metrics. The associations will actively encourage members to obtain international quality certifications, such as the ISO 9000 series, CMMi, COPC, eSCM, BS7799, BS17700, Six Sigma and the like. Certifications help organizations improve processes, but also serve as a powerful marketing tool by assuring world-class standards of operation.

4. Data security & privacy
Recent reports of increasing incidences of identify theft have heightened concern for data security & privacy. NASSCOM and BPA/P intend to collaborate to refine legal, policy, and procedural practices intended to safeguard the rights of individuals whose information is processed by shared and outsourced services providers. Security is not an issue limited to India and the Philippines. It’s a global concern, but India and the Philippines intend to champion rigorous standards and practices enhancing protection.

5. Workforce development
When there is talk of the BPO industry, it is always accompanied by talk of the workforce. The BPO industry is a people industry, and workforce development refers to the processes involved in preparing students for work in its various sectors. Education and skills development ideally involve both technical and cultural training. BPA/P and NASSCOM can contribute to curricula development, lobby government for education and training incentives, and otherwise contribute to enhanced educational infrastructure.

6. Collaboration and cooperation
Collaboration and cooperation between members involves efforts to foster alliances and exchange of ideas directly between members of the two associations, creating new enterprise opportunities.

7. Infrastructure Improvement
Finally, infrastructure improvement refers to cooperation with regard to expansion outside metropolitan areas, telecom and real estate development, and incentives administration.

In remarks following his arrival in the Philippines Sunday, NASSCOM president Kiran Karnik said of the BPO industry, “The future is IP… IP in the form of India and the Philippines.” Karnik went on to say that the Philippines and India together have about 10 percent of the global $300 billion BPO market. Working together, he said the two countries can aspire to 20 or 30 percent of the market. “Together, we can grow the pie. We all gain.”

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