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Archive for December, 2010

Outsourcing Credit Function with Bizulo.com Can Help Lenders Boost SBA Lending

December 20th, 2010

Small Business Administration (SBA) loan programs have become a critical source of funding for small and medium sized enterprises, which had difficulty in accessing to capital during the recession. Many small, community-based lenders, however, are not prepared to respond back to the needs of small businesses, in spite of many benefits that SBA loan programs have for the lenders. Bizulo.com offers SBA lending advisory and outsourced underwriting services for small financial institutions that will help them boost their SBA lending operations.

SBA loan programs can be ideal for small, community-based financial institutions primarily because of the SBA guaranty feature that can effectively mitigate potential credit risk of loans made to small businesses. The substantial coverage of exposure by the SBA guaranty, typically 75% for 7(a) term loans (85% for loans not more than $150,000) and 50% for Express loans, makes community-based lenders feel more comfortable to make SBA loans to small businesses.

SBA loan programs also offer flexible loan terms to the small businesses with limited burden of carrying debt. SBA 7(a) term loans may have 10-year loan term for such purposes as financing accounts receivable, inventory purchase, leasehold improvement, and business acquisition or restructure. SBA 7(a) term loans for financing business-purpose real estate or fixed assets can generally go up to 25 years. 504 loans for financing business-purpose real estate, machinery and equipment, or new construction can go up to 20 years.

These 10-year, 20-year, or 25-year term loans are seldom offered to small businesses through traditional commercial lending programs. This is a great selling point for the community-based lenders as the SBA loan programs are used as a business development tool.

Another great advantage of SBA loan programs for community banks is that, through SBA loan programs, they can fund loans larger than their regulatory lending limit. The SBA guaranteed portion is excluded from total risk exposure of loans. Therefore, community banks can technically make four times larger SBA 7(a) loans, with the 75% loan guaranty, than their legal lending limit, up to five million dollars which is the size limit of SBA 7(a) loans.

Moreover, perhaps the most lucrative characteristic of SBA 7(a) loan program is that lenders can sell the guaranteed portion of SBA 7(a) loans to a very active secondary market. By selling the SBA guaranteed portion, lenders can not only immediately recapture the funds utilized to make loans (equal to the guaranteed portion of loans sold less fees paid), but also make substantial premium income right away, plus annual loan servicing fee of 100 basis points over the life of loans.

Although SBA loan programs bring many benefits to the lenders as mentioned above, many small financial institutions are not active in offering SBA loan products. In fact, they are hesitant in expanding their SBA lending operations primarily because of the substantial costs of hiring and retaining experienced SBA lending personnel in place. To start an SBA lending operation, a financial institution needs at least an experienced SBA lending officer, SBA underwriter, and closer. What is critical for the lenders is to retain an officer well versed with SBA’s Standard Operating Procedures (SOP’s).

Some of the SBA lending and/or credit functions can even be outsourced, which may improve efficiency in the overall credit process. Lenders may consider outsourcing such functions as application prescreening, underwriting, compliance review, legal documentation, regulatory reporting, training, etc. Start-up or expanding SBA lending operations can utilize reliable outsourcing solutions to ensure adequate human resources are in place to achieve loan growth and risk management goals.

The consultants at Bizulo.com offer SBA Loan Underwriting and decision support services for community-based financial institutions, should there be needs for outsourcing such functions. As experts in commercial and SBA lending, they possess the knowledge and expertise needed to help community-based lenders build a successful SBA lending process

Source:http://www.businesswire.com/news/home/20101220005892/en/Firstsource-Signs-Three-Year-Outsourcing-Agreement-GENBAND

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South African incentives could hurt India’s BPO industry

December 20th, 2010

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South Africa’s recent announcement of incentives to attract business process outsourcing (BPO) firms could challenge India’s dominance of the sector in the long run, say executives and experts.

The development comes close on the heels of an International Business Machines Corp. (IBM) report that said the Philippines has overtaken India in terms of the number of people employed by the voice-based BPO segment.

India pioneered the BPO industry two decades ago, bringing in low-end business functions from the US and Europe, but now needs to move up the value chain and offer more specialized services to maintain supremacy, experts said.

Late last month, South Africa said it would offer a tax rebate of nearly 120,000 rand (Rs.8
lakh) over three years for every job created by BPO firms.

English is the mother tongue of a large number of South Africans, another bonus for voice-based firms that service American and British clients. “The lowering of costs with incentives coupled with good English skills and world-class environment have considerably enhanced South Africa’s overall BPO offer,” the statement announcing the incentives said.

Some 200,000 South Africans are employed in the sector, with five of the world’s top 10 BPO firms setting up shop there in the last two years. Genpact Ltd and Aegis Communications Group Inc. have started operations, while Mahindra Satyam is planning to open a centre of its own.

“Genpact has been operating since August 2009 and is exploring expansion opportunities,” said Rein van der Horst, vice-president of Genpact-South Africa. “Clients are looking for a strategy to diversify risks and moving a part of their business to destinations like South Africa,” he said.

Some also want to set up an Africa-wide hub there, he said.

Pravin Kumar, chief executive of Spanco BPO, said similarity of accents and financial systems make South Africa perfectly suited to service European clients. “The lesser time differential also helps,” he said. Spanco entered Africa by acquiring a part of Kuwaiti firm Zain’s assets this year.

Mahindra Satyam operates in South Africa through a partnership with local BPO firm Direct Channel Holdings (Pty) Ltd, but is thinking of opening its own centre, Mahindra Satyam BPO’s chief executive Vijay Rangineni said.

The incentives announced by South Africa reduce the cost of operations by nearly 20% for 10-400 jobs created, and 30% if more than 800 jobs are created.

This can offset even information technology and transportation expenditure, in addition to capital expenditure, said H. Karthik, vice-president of Everest Group.

Kumar Parakala, global head of sourcing advisory at the consultancy KPMG, said South African BPOs typically offered 53-56% savings in operating costs compared with UK-based BPOs. “With the new package, this saving is expected to go up to 73-76%,” he said.

South Africa already has an infrastructure that is conducive for business. Although BPOs have to spend more on salaries compared with India, the new incentive would bring down the difference substantially. “No country should rest on its past laurels and should continue to innovate to remain competitive,” said Rangineni of Mahindra Satyam.

Even if other countries, such as the Philippines or South Africa, get a lead due to their accents or specific skill sets, India has to maintain its significance by moving up the value chain, he said.

Research firm Everest estimates that call centre revenue in the Philippines will be at $5.7 billion (Rs.1.5 trillion) in 2010 compared with India’s $5.5 billion.

John Lutz, general manager of IBM Global Process Services, said the development does not mean the voice-based BPO business will vanish in India.

“There are certain clients who are particular about accents, there are others who are not,” he said. India can continue to service such processes along with delivering other capabilities, he said. India’s strength lies in its ability to deliver a wide range of services, unlike most other countries, he said.

Source:http://www.livemint.com/2010/12/16214542/South-African-incentives-could.html?atype=tp

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Wipro joins the Greenpeace CoolIT Leaderboard

December 19th, 2010

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Wipro became the first Indian company to join Greenpeace’s CoolIT Leaderboard rankings that assesses companies on their commitments and actions on energy and climate solutions. It featured in the top 10 of a list that includes many global IT majors.

Greenpeace (GP) released Ver 4 of the CoolIT Leaderboard rankings at Cancun, where this year’s global climate change meet is being held. According to the report, Wipro stands out for its transparent mitigation plan that front loads energy efficiency and direct renewable energy purchase and installation.

Mr. Anurag Behar, Chief Sustainability Officer at Wipro said, “IT companies can and need to be catalysts for the kind of change that the energy sector requires today to build a sustainable ecosystem. We are happy to be in the top ten in our very first instance of participation. The ranking is a reflection of our commitment to making sustainability integral to our business; something which we will continue to emphasize and build upon in the coming years.”

The CoolIT Leaderboard evaluates top IT companies across the spectrum on their efforts to provide economy-wide climate solutions, reduce emissions from their own operations, and lobby for science-based climate and energy policies. The latest assessment of 17 global IT companies by Greenpeace reveals signs of climate leadership and penalizes inaction.

Wipro’s sustainability initiatives include – working jointly with education and civil society networks on sustainability programs, engaging with government bodies to shape policies on green, minimizing Wipro’s internal footprint on energy, water and waste and providing products and solutions that enable customers to become greener.

Source:-http://www.orissadiary.com/ShowBussinessNews.asp?id=23218

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Israeli Outsourcing to Palestinians Booms

December 19th, 2010

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That Israel is a world leader in high-tech is well known, but a story you’re unlikely to see much coverage about – Israeli companies outsourcing IT work to Palestinians. Proof that in the 21st century, IT is a language that transcends all cultural, economic and political barriers.

Although peace talks between Israeli and Palestinian politicians may have reached an unfortunate impasse, AP reports that an increasing number of Israeli high-tech companies are doing work with their Palestinian counterparts in the West Bank.

For some Israelis, this is their own small way of making a positive contribution to an otherwise troubled part of the world. To others, it’s “because it simply makes good business sense.”

Traditionally, many Israeli high tech firms sent their work offshore to Eastern Europe, India or China. However, in the last 3 years, they have increasingly turned to their Palestinian neighbors and have found that not only are they smart, ambitious and hard working, but “the cultural gap is much smaller than we would think,” said Gai Anbar, chief executive of Comply, an Israeli start-up that develops software for global pharmaceutical companies like Merck and Teva.

And here’s the thing – many Palestinians have also warmed to the idea. “I doubt you would find a company who says, ‘I am closed for business‘” to Israelis, said Ala Alaeddin, chairman of the Palestinian Information Technology Association.

Although the Palestinian workers cost less to the Israeli companies than do Israelis, they still earn on average more than say their Indian or Chinese counterparts, and more importantly – than the average Palestinian salary in the West Bank (and certainly more than in Gaza, where such ‘collaboration’ would be tantamount to treason in the eyes of the ruling Hamas). It is an opportunity for them not just to put food on the table for their families, but like their Israeli counterparts, also a chance to make a positive contribution to peace between the two people.

So here’s the thing – next time you think about boycotting, divesting from or sanctioning Israeli companies, remember this – you’re not only hurting Israelis, but you’re hurting the Palestinians and hopes for peace even more.

Source:-http://www.frumforum.com/israeli-outsourcing-to-palestinians-booms

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Outsourcing of Turnpike jobs opposed

December 19th, 2010

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More than 200 union members and leaders packed the New Jersey Turnpike Authority’s meeting last week to oppose a plan to outsource toll collectors jobs on the Garden State Parkway and Turnpike to private contractors next spring.

“Over the years, the union has worked together to help the turnpike solve its problems,” said Franceline Ehret, president of Local 194 of the International Federation of Professional and Technical Engineers, which represents 1,200 authority employees. “We urge you to hold off putting out the request for proposal and allow us to work it out.”

Ehret and other speakers said outsourcing will take what are now middle-class jobs and reduce them to minimum-wage jobs, which will have a negative effect on the state and local tax base and the economy. Ehret said that her union recognizes the tough economic conditions and is willing to negotiate on other issues.

Authority officials said the union will have a chance to submit a proposal as a private contractor.

Union contracts with toll collectors expire June 30, and authority Executive Director Veronique Hakim said she wants a privatization contract awarded sometime in the spring.

Source:http://www.courierpostonline.com/article/20101219/NEWS01/12190337/Outsourcing-of-Turnpike-jobs-opposed

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IT players slam “cyber sex” trade

December 19th, 2010

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A government body and an umbrella organization for business process outsourcing providers denounce and condemn on-line sex trade saying further that those involved in such practice should be criminally prosecuted.

The Commission on Information and Communications Technology (CICT) and the Business Processing Association of the Philippines (BPAP) has aired their denunciation amidst faulty insinuations that commercial cyber sex trade is part of the country’s outsourcing capabilities.

Business process outsourcing (BPO) is unlike commercial cyber sex operations, both insist.

In a press statement, both clarified that commercial cyber sex is not in any way part the country’s BPO capability.

Some media reports have allegedly attributed incidences on cyber sex to an illegal practice to “Outsource”, said BPAP Director for external operations Marti Crisostomo.

Meanwhile, the same statement quoted that CICT Chair Sec. Ivan Uy statement which said that cyber sex and illegal sex dens as reported recently is pervasive on the worldwide web and they are being committed from various locations, thus they are not being offshored to the Philippines.

We should not attribute or compare cyber porn with our flourishing BPO industry, the press statement quoted Sec Uy.

For his part, BPAP President and CEO Oscar Sanez called commercial sex on the net as on-line porn and not part of the Off-shoring industry.

He accordingly called these illegal activities being done around the world and is not at all related to the outsourcing industry and certainly not at all connected with BPO.

The BPO government arm and industry association made the statement to clarify fearing that the “Sunshine” industry, which is now getting the Philippines on the global map mat slide back.

The phenomenal rise in the country’s BPO rests in the strength in local scalable skills in business and corporate services that can support US and European companies, Crisostomo said.

The BPO industry has been growing at an average of 26% per year and is expected deliver to the economy some US$ 9 billion in revenues by year-end as it has provided jobs half a million workers.

CICT is the government body overseeing the over-all welfare of the country’s ICT development while BPAP is the umbrella association of BPO companies which houses some 320 members in the Philippines.

Source:http://www.theboholstandard.com/bnews.php?issue=196&s1=3360&s2=3363&s3=3369&s4=1017&s5=3362&s6=&s7=1015&s8=1014&s9=&s10=&s11=&s12=1013&s13=&s14=&s15=

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Israeli Outsourcing to Palestinians Booms

December 19th, 2010

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That Israel is a world leader in high-tech is well known, but a story you’re unlikely to see much coverage about – Israeli companies outsourcing IT work to Palestinians. Proof that in the 21st century, IT is a language that transcends all cultural, economic and political barriers.

Although peace talks between Israeli and Palestinian politicians may have reached an unfortunate impasse, AP reports that an increasing number of Israeli high-tech companies are doing work with their Palestinian counterparts in the West Bank.

For some Israelis, this is their own small way of making a positive contribution to an otherwise troubled part of the world. To others, it’s “because it simply makes good business sense.”

Traditionally, many Israeli high tech firms sent their work offshore to Eastern Europe, India or China. However, in the last 3 years, they have increasingly turned to their Palestinian neighbors and have found that not only are they smart, ambitious and hard working, but “the cultural gap is much smaller than we would think,” said Gai Anbar, chief executive of Comply, an Israeli start-up that develops software for global pharmaceutical companies like Merck and Teva.

And here’s the thing – many Palestinians have also warmed to the idea. “I doubt you would find a company who says, ‘I am closed for business‘” to Israelis, said Ala Alaeddin, chairman of the Palestinian Information Technology Association.

Although the Palestinian workers cost less to the Israeli companies than do Israelis, they still earn on average more than say their Indian or Chinese counterparts, and more importantly – than the average Palestinian salary in the West Bank (and certainly more than in Gaza, where such ‘collaboration’ would be tantamount to treason in the eyes of the ruling Hamas). It is an opportunity for them not just to put food on the table for their families, but like their Israeli counterparts, also a chance to make a positive contribution to peace between the two people.

So here’s the thing – next time you think about boycotting, divesting from or sanctioning Israeli companies, remember this – you’re not only hurting Israelis, but you’re hurting the Palestinians and hopes for peace even more.

Source:http://www.frumforum.com/israeli-outsourcing-to-palestinians-booms

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