IBM promises long-term investment in its "business transformation outsourcing" (BTO) operations in the Philippines as it eyes more demand from the Asia Pacific market while growing the services capability of its Manila offices.
IBM delivers BTO services from two centers located in the Philippines: IBM Business Services, a subsidiary of IBM Philippines that delivers human resource or HR services, and IBM Daksh, which is focused on customer relationship management (CRM) services. Established early last year, IBM Business Services resulted from IBM"s acquisition of Procter and Gamble"s HR shared services center as part of a global outsourcing contract between the two parties. It currently services P&G and IBM"s own global operations.
IBM Daksh, meanwhile, resulted from IBM"s acquisition in April 2004 of Indian BPO provider Daksh, which set up operations in the Philippines, initially doing call center services. IBM Daksh is part of IBM Business Consulting.
"IBM will continue to invest heavily, especially in the Philippines as we continue to acquire new domain expertise and expand our global network of delivery centers," said Randy Walker, BTO Asia Pacific general manager for IBM Business Consulting, during the recent formal opening of IBM Business Services.
Located at the CyberOne building at Eastwood in Libis, Quezon City, IBM Business Services employs a workforce of 370 people that delivers services in eleven languages to more than 178,000 P&G and IBM employees spanning 65 countries.
"Lift and shift"
Regarding its BTO jargon, Walker noted that BPO literally means a "lift and shift" of client processes to the service provider. On the other hand, aside from taking over these processes, Walker said IBM"s goal is to improve their operations by leveraging on the company"s technology.
The strategy is to centralize and standardize the delivery of its services from these centers, using IBM-developed applications. IBM will deploy processes that follow global standards but more and more will be tailoring our services to suit local requirements using IBM"s in-country operations, Walker added.
Applications demonstrated during a tour of IBM"s facilities include those dealing with travel disbursement and global "relocation" services for expatriates.
Evolving from HR
The Manila center is expected to boost demand for services coming from Asia Pacific, Walker said. The Manila center currently serves P&G"s operations in North America and Europe.
Aside from Manila, IBM, which has gradually transformed its business model from selling products to services, also operates HR delivery centers in Costa Rica, Budapest (Hungary) and Newcastle (United Kingdom).
"We now have a number of clients from North America moving their requirements to Manila," said Kathy Hegmann, head of IBM"s Global BTO, citing the core capability and strong multi-language support of the Manila center.
IBM also intends to expand its capability from HR -- such as payroll and benefits processing -- to finance and accounting services, which are also touted to have big market potential. IBM currently delivers the latter range of services from its centers in Bangalore (India), Budapest, Krakow (Poland) and Tulsa, Oklahoma.
Likewise, Hegmann added IBM plans to grow IBM Daksh from call center services to other CRM back-office services similar to how Daksh has diversified its operations to become one of the leading back-office service providers in India.
Additionally, IBM is also looking forward to address the local market for outsourced HR services. "It is one key factor now looked into by local companies who want to be competitive not just locally but globally," said Renato Jiao, president of IBM Business Services.