Monday, September 22, 2014

#BPO industry insiders clarifies #Aegis Malaysia video brouhaha


I agree that there is a great need to work on solutions regarding the points highlighted in the investor marketing video by Aegis. But as an offshore industry insider myself, there is a more nuanced understanding of the background behind Aegis moving to Malaysia before anyone throws in knee jerk reactions on any side of the argument.

Note that as of late 2013, Essar Group (the Indian-controlled holding company of Aegis) has been slowly divesting and offloading its shares in order to streamline core investments. Their Aegis US-based markets (which is offshored to the Philippines and Costa Rica) has not been performing well as much of Aegis concentration is within the Indian domestic markets. They lost 200 million in USD revenues in a span of 2 years. What compounds this is that other BPO players catering to the US markets are making more revenue than Aegis. There is also this growing trend of consolidation & buyouts by large BPO players in the Philippines.(Convergys which acquired Stream which acquired the Ayala-owned Etelecare; Sykes acquiring ICT; Synnex acquiring Concentrix & IBM; Telus acquired Ambergris, all these within the last 4 years. Do note that these companies have an employee headcount of more than 5k prior to them acquiring the centers mentioned.)

PeopleSupport, as Aegis Philippines was formerly known, was a Delaware based company that had offshore centers in the US, Philippines and Costa Rica. PeopleSupport was bought by Aegis in 2008. As of 2013, Aegis' profit margins are lower than its industry peer averages as it has always had a poor vendor ranking amongst client-company outsourcers due to prevalence of fraud, penalties and inability to grow existing portfolios and thereby losing contracts to competitors. Not to mention, NLRC mediated labor cases that Aegis lost due to bad labor practices.

Last Aug 2014, Teleperformance (based in France and with Philippine centers employing more than 35k employees within 16 sites in the Philippines) acquired Aegis US, Philippines and Costa Rica. Aegis as part of the Essar Group continues to maintain its centers in India, Malaysia, Sri Lanka, South Africa and some Latin American countries.

Industry insiders do believe that the ease of doing business here in the Philippines needs massive improvement as well as our telco infrastructure. However, in order to facilitate growing foreign investments, the country needs to primarily review FINL (Foreign Investment Negative List) controls and regulations currently in place. This is more a low-hanging fruit than having to change the law (which move like molasses in this country).

However, the Aegis investor video (mind you, it's not a public ad, but an investor ad) was deployed in bad form. It connoted sour-graping and was released after the TP deal was finalized this August.

Also, note that as part of the BPO/KPO/IT-BPM industry, Aegis Philippines applied for PEZA/BOI tax exemption & was granted certification & BOI pioneer status without having to show the necessary 60-40 stakeholder requirements. It also benefited from certain tax holidays, labor tax exemptions, and waived import-export duties and regulations for 6 years since 2008. However, Aegis filed a case against the BIR last 2012 as a counter suit to BIR's official notice to make them pay the correct taxes. Aegis misdeclared taxable earnings for 2007 and was seeking for the government to refund them 66M Php (Yes, it is actually 66,717,803.87 pesos). The Court of Tax Appeals denied Aegis' claims in a decision penned last June 2012.

In as much as i understand Aegis investor sentiments about the Philippines, it does connote a degree of sourgraping and in large part, their business handling…in comparison with the larger players in the industry who continue to prosper despite these bottlenecks.

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http://getrealphilippines.com/blog/2014/09/aegis-video-pits-malaysias-infrastructure-versus-the-philippines-in-bid-to-attract-bpo-business/comment-page-1/#comment-727326

2 comments:

  1. TRUTH HURTS only if we (Filipino) keep on denying/running away or pretends it's not happening. We and especially our leaders have to face it, deal with it and hope our condition improve.

    WHO and HOW can we solve all these Problems?

    "Politicians (even if they were sincere) cannot solve all these problem because they have no technical capabilities, poor problem solving skills & logic and lacks observations/imagination (no vision) and bad organization/planning skills (since politician are mostly lawyers - nature of work are disputes/chaos).

    Architects, Engineers, planners, Scientist, researchers & technical people are trained to solve all these problems because they have the capability, experience & know how to design, plan & construct building, community & cities - making all our lives better & safer.

    SO WHY NOT USE THEM?

    1. @ $20 Billion annual remittance
    Philippines main Export commodity are OFW (modern day hero or a form of slavery), Philippines role will always be to supply of cheap/quality labor to the world.

    Our Government always Export our Best People (OFW w/c are hard-working, productive, highly skilled & intellectual) which result to "Brain Drain". And forever relied on their dollar remittances to fuel our economy. Those left behind (lazy & AMPAW) who are tasked or voted to lead our nation and others are appointed to vital positions in the government.

    "It stands to reason that where there's sacrifice, there's someone collecting sacrificial offerings. Where there's service, there's someone being served. The man who speaks to you of sacrifice, speaks of slaves and master, and intends to be the master" - Ayn Rand

    2. Ruling Profession or majority of our POLITICIANS are ff.:

    a. Popular Actors/celebrities - whose nature of work is movies/TV (fantasy or not real world), often Lack of political acumen due to poor observation & awareness of the real problems of our country. An actor turned politicians can easily be manipulated (puppet) by people around him.

    Just because someone is popular (name recognition & charisma to capture votes and manipulate our mass with looks, smooth talk, act, sing or dance around important issues) doesn't make him a leader.

    b. Lawyers - whose nature of work are disputes of legal matters (negative). They simply talk or discuss & disagree/argue with one another and often forgets logic and reasoning. So they usually end up fighting w/ one another. Thus, no one cares anymore, who is right and who is wrong. All that matters is who is friend and who is foe.

    "Being in a fight creates a new frame of mind, attitudes, expectations, and reactions that comes w/ arguing. Because the parts of the brain that handle reason and logic will be dormant. And the parts of the brain that handle hostile attacks — the fight-or-flight response — lit up."

    This is why our political system is so divided and Philippines remains to be a 3rd World.

    We need Leaders from other professions like the ff.:

    a. Architects/Engineers - whose nature of is to Create/Build/Plan (positive)

    Architects/Engineers & OFW are involved in billions dollar projects (energy) around the world which benefit not only our country but globally we literally "makes the world go round" - by providing thousands of work (employment), business opportunities and Fuel/energy supply worldwide which in turn also circulate (billions) money around the world.

    The peso that we spend and our politician (corrupt/dumb) waste or pocketed are back by dollar (value) remittances we Architects/Engineers & OFW bring to our country. Without the dollars remittances (fuel to our economy) we bring-in, our Peso basically has no value & trade will be a problem.

    http://asia.nikkei.com/Business/Trends/Japanese-companies-turn-Filipino-workers-into-overseas-leaders?n_cid=NARAN012

    b. Doctors - (Dr. Mahathir) who cured & made Malaysia a very healthy (wealthy) nation.

    ReplyDelete
    Replies
    1. All these citations, true or self-shooting in nature, do not merit a badly written and executed ad however you put it, even from a marketing standpoint. Just look at the backlash it's been getting.

      Aegis also has no excuse to say that badmouthing Philippines was not the intent. Why would any creative agency waste money and effort developing an ad that is supposedly at odds from the concept that Aegis had in mind?

      Delete

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