Except for four call center sites that were isolated by flood waters, the country’s outsourcing industry came out relatively unharmed from the devastation inflicted by typhoon “Ondoy,” BPO officials said.

The Contact Center Association of the Philippines (CCAP), the biggest organization of call centers in the country, said only minimal effect, mostly in the form of stranded employees, were reported by three of its member companies.

Call center firms TeleTech, ICT, and NCO have said none of their equipment were damaged since most their facilities were located in malls, according to CCAP executive director Jojo Uligan in a phone interview.

ICT, which has a site in Riverbanks mall in Marikina City, was able to salvage its computers and networking gears by transporting them to the second floor of the building at the height of Ondoy’s downpour.

NCO, meanwhile, also has a site in Marikina City but it occupied the second floor of Robinsons mall. It did not report any damages, as well.

TeleTech, said to be the biggest call center operator in the country with 17,000 agents, reported two of its sites — in Robinsons mall in Cainta and Novaliches — were surrounded with water but the company said this resulted to “minimal disruption” to its operations.

In a statement, the US-based call center operator said its “proprietary cloud-based delivery network minimized any business interruption to its clients through its highly reliable failover architecture and its ability to temporarily reroute its clients’ customer inquiries to other locations in TeleTech’s global delivery network.”

CCAP’s Uligan said call centers in other flood-hit areas such as Laguna were also not affected. Big player Convergys, which has call center facilities in the province, did not suffer any disruption or damages.

“If there were some damages, I guess it’s just some tables and chairs,” Uligan said. “In terms of business loss, it was not that significant since the number of calls just decreased by a few percentage.”

Those trapped inside the sites, Uligan said, were discouraged from going home and were given sleeping quarters and food. TeleTech, for instance, doubled the pay of its agents who chose to work while waiting for the waters to subside.

In Libis, Quezon City where a number of call centers are located, agents were also asked to render overtime service since most of their colleagues were not able to report for work.

Uligan said CCAP’s board will soon meet to finalize a disaster mitigation plan which their members can adopt.

“Although each call center has its disaster plan, our strategy will also involve pooling our resources,” he said. “We’ve already drafted this a long time ago but Ondoy may have pushed us to finally finish it.”

In a way, the great deluge gave the outsourcing industry, particularly call centers, the opportunity to test the robustness of their IT infrastructure.

“One reason why the call center did not suffer very much from this calamity is the fact that they merely rerouted the traffic to other sites,” said Martin Crisostomo, executive director for external relations of the Business Processing Association of the Philippines (BPAP).

BPAP, the umbrella group for all outsourcing firms in the country, counts CCAP as a member.

Crisostomo said it was actually the road network, rather than the country’s Internet infrastructure, which prevented call centers from operating in full capacity.

“The telecom infrastructure was not disrupted at all during the typhoon. And even if the power was cut off in the affected areas, the call centers had generator sets on hand,” Crisostomo said.

He said some call centers such as Sitel, whose site in Julia Vargas St. in Pasig City was not flooded but had a huge number of employees residing in nearby areas, have also released the 13th month pay for its employees.

Source: http://www.mb.com.ph/articles/225249/rp-outsourcing-business-emerges-unscathed-ondoy-test

As economists explore the causes of the current worldwide recession, they are expressing a growing recognition that free markets are not always as efficient as many assumed them to be. In particular, free markets do not appear able to properly price systemic risk: the second- and third-order effects of decisions by a number of financial players, each apparently operating rationally, which can combine to cause a complex interrelated financial system to collapse.

These forces can also impel manufacturing companies—each independently making apparently rational decisions to outsource certain segments of their operations—to ravage their industrial commons: the infrastructure of suppliers and skills that underpins their business. The savings these firms expect to generate from outsourcing are based on costs that often do not properly reflect the damage caused by such activities.

A related situation occurs when financial players choose to buy or sell an asset (e.g., a stock bond, collateralized debt obligation or credit default swap) with the implicit assumption that they can either insure against possible losses from such decisions or reverse them at some later date. But insurers, deluged by an unforeseen surge in claims and faced with the possibility of losses, may not be able to honor their contracts. And, as shown by the role CDOs played in the recent economic collapse, once-reversible financial decisions may turn out not to be so.

Choosing to outsource assets to a foreign company is fraught with the same risks. Outsourcing can decimate both the skills and capabilities that are key to a company’s competitiveness. It can also undermine the competitiveness of the network of backup suppliers counted on to step in if a major supplier fails to meet its commitments.

A company’s competitive advantage is rooted in things it can do that its competitors cannot do as well, if at all. As the number of these core capabilities decreases, the company’s competitive vulnerability increases. US manufacturing companies’ preoccupation with outsourcing has had the effect of teaching an armada of hungry competitors first how to master their own capabilities, and then surpass those of the outsourcing firms. All the while the lower costs these companies have achieved have deluded them into thinking they’re improving their profitability. In actuality, they’re simply cashing out their intellectual assets. An ideological belief in the supposed transparency and efficiency of free markets has led these firms to the brink of disaster.

Robert H. Hayes is a professor of business administration emeritus at Harvard Business School.

Source: http://businessmirror.com.ph/home/perspective/17387-outsourcing-is-high-techs-subprime-mortgage-fiasco.html

AFTER a plan to save $2 million by outsourcing its Canberra bureau to Sky News fell over, Nine has moved to cut costs by sacking five producers.

Two long-serving senior news producers, Craig Sullivan and Phil Hind, were made redundant on Friday.

Sullivan produced the now-defunct This Afternoon and Hind produced the afternoon and late news bulletins.

As well, three freelance assistant producers were dismissed as network chief executive David Gyngell looks for $30m in savings this year, on top of the $20m he had to cut from Nine’s budget last year.

The sackings, which represent a substantial part of Nine’s news-production team, came as details emerged of the network’s secret plans to axe its Canberra bureau.

A Nine spokesman confirmed yesterday that Nine had explored closing down its Canberra bureau and merging it with Sky News but claimed it had never been anything more than an “option for discussion”.

Mr Gyngell had wanted to close down the expensive political operation at Parliament House but retain the services of Nine political reporter Laurie Oakes as the face of the network’s political coverage.

But the plan was scuttled before Mr Gyngell could tell Oakes or Nine’s news chiefs Mark Calvert and Darren Wick about it, when someone leaked the news to veteran Oakes.

Apparently Mr Gyngell’s argument was that Oakes, a giant of the press gallery with a wealth of exclusives to his name, was the only part of the Nine bureau the public wanted to see.

When contacted, Oakes declined to comment.

The idea was for Sky News Australia’s correspondent David Speers to take over the daily reporting of Canberra stories for Nine, leaving Oakes to do the main 6pm bulletin only.

Sky reporters were to be branded as Sky reporters but would appear on Nine’s early and late news, and the number of camera crews would have been reduced dramatically.

It has been reported that Sky News chief executive Angelos Frangopoulos had held discussions with Nine to take over parts of Nine’s news operations.

And according to Sky sources, the move is “inevitable”, one saying “Laurie won’t be around forever”.

Nine would be responsible for paying all redundancies and Sky would then charge Nine a fee of between $500,000 and $600,000 for the service, a considerable saving on the current cost of more than $2 million in salaries alone.

It appears the plan came unstuck when Mr Gyngell and Frangopoulos extended it to include Seven, hoping to create a mega bureau.

Under that scheme, Seven and Nine would be merged with Sky, retaining only Oakes for Nine and political correspondent Mark Riley for Seven.

But sources at Seven said the idea was immediately rejected by the network, a claim Nine denies.

Seven news director Chris Willis said the plan was considered last month by the network and rejected.

“This wasn’t a bean counter’s idea or a pipe dream,” Willis said.

“It came from the highest levels at Nine and as far as we know it wasn’t run past Oakes, Mark Calvert or Darren Wick. We discussed it with David Leckie and his response was that it ‘was a loser’s position’ and we agreed.”

But a spokesman for Nine said Seven was trying to spin it now to appear as though it was never interested.

“Seven’s position, rather than somehow being heroic as they pretend, was schizophrenic,” the spokesman said.

“Had anything come of it, Seven would have had nothing to fear, but fear itself. So they just ran away at speed instead.”

Source: http://www.theaustralian.news.com.au/story/0,24897,26227185-7582,00.html

A British TV investigation has revealed that confidential medical records sent to India for computerisation are being offered for sale, sparking another round of concern over breach of data security.

The investigation is scheduled to be broadcast on ITV on its ‘Tonight’ programme on 19 October and is titled ‘Health Records for Sale’. On the basis of the investigation, the police in Britain and their counterparts in India have reportedly launched an investigation.

Sall Anne Poole, head of investigations at the Information Commissioner’s Office, said: “We are very concerned that private patients’ medical records are on sale in India. The ICO will establish the full facts and will then decide what action, if any, needs to be taken. Medical records are sensitive personal information and must be held securely.”

Chris Rogers, the programme’s presenter, contacted two Indian salesmen through an internet chat room, and posed as a marketing executive keen to buy medical records to sell insurance and medicines.

Rogers bought 116 files with detailed medical records of British patients, from the two salesmen, whom the programme named as Jaesh Bagchandnani and Kunal Gargatti, the Daily Mail reported today.

Bagchandanai reportedly said they came from staff at an Indian ‘transcription’ centre where medical records are computerised.

Bagchandnani told Rogers: “We can do really good business with these leads. These leads will give you diagnose, entire diagnose of all the customers, what the customer is facing. There are 17 teams or you can say team managers.

The floor managers, they are working as freelancers for me and I am telling them to pull the data for me. They work for me.”

Researchers for the programme then met Gargatti, in Mumbai. Kunal told them: “You have the doctor’s name, doctor’s address, doctor’s phone number. Each and every thing here. I have 30,000 files to give you today, right now. I’ve around 140 diseases here. You just tell me which disease you’re looking out for – I can give you anything.”

The files procured were of patients of London Clinic, one of Britain’s top private hospitals. Several hospitals in the National Health Service have also outsourced their transcription to India, sparking concern over data safety following the latest investigation.

The London Clinic said it dealt with its own files internally and did not send them to private companies. But it advised a group of consultants to use a specialist Buckingham-based IT company, DGL Information Technologies UK, with which the clinic has a contract, to help turn paper records into computerised files.

DGL itself did not handle the records but recommended that the doctors use a document-scanning service provided by a company it has a contract with, Scanning And Data Solutions, which operates from Hertfordshire.

But Scanning And Data Solutions then sub-contracted further work on the files to a company in Pune.

Scanning And Data Solutions admitted it had sent thousands of medical records to India over the past two years and said it ‘had no reason to disbelieve’ that it had scanned the records obtained by ITV in India. It has now suspended its operations there and requested that its partners delete all the information they hold. It has told both Hertfordshire Police and Indian police of the theft.

Company director Michael Bailey said: ‘Urgent investigations are under way to ascertain how these confidential records were stolen. A serious crime has taken place.’

A spokeswoman for the London Clinic said: “The outsourcing of patient data to India was without the knowledge or consent of the clinic or its consultants. All business was ceased with the third party as soon as we were alerted to this issue. We will do all we can to assist the investigations.”

- Agencies