Riding the Outsourcing Wave As seen in Manila Tapped by Levone


									                                                                    As seen in

 Manila Tapped for Call Center
Joint venture adds 1,200 seats in Philippines                                               by Christopher Barton, cbarton@gomemphis.com
                                                                                                                           October 20, 2002
When Teresa Hartsaw, president of ePerformax Centers Corp.                  one account, and therefore, becomes trained to answer
in Cordova, began searching for an expansion site, geography                detailed questions about that company, Hartsaw said.
was a major consideration.
                                                                            Top clients include San Francisco-based The Sharper Image,
Hartsaw considered several sites around the globe, and like                 a specialty retailer with 127 stores and an Internet ordering
many American call center firms,                                                                      site, and Baton Rouge, La.-based
searched for lower labor costs and a                                                                  UC Lending Corp., a residential
dependable, educated workforce.                                                                       mortgage company.
After several months of research and                                                                   On Oct. 30, the company will have a
negotiations, the choice was clear.                                                                    grand opening for its Manila call
She chose to invest more than $3                                                                       center, which is a joint venture with
million to expand in Manila,                                                                           Transnational Diversified Group Inc.,
Philippines, where English is a                                                                        or TDGI, a Philippines conglomerate
second language and there is an                                                                        of 30 companies that also
abundance of college graduates                                                                         specializes in real estate investments
seeking good jobs.                                                                                     and international trade.
                                           Photo by Alan Spearman
Hartsaw is part of a growing trend of Teresa Hartsaw, president of ePerformax Centers Corp., meets The Manila call center eventually will
U.S.-based call center firms opening with Dennis Lindley (left) and Ken Van Vranken at the                employ about 3,500 full-time
                                            company's Cordova call center. Van Vranken will be onsite
overseas operations as the Internet general manager of the firm's operation in Manila, Philippines. workers, all of whom are required to
and                 telecommunications                                                                    have college degrees. The call
infrastructure improvements have                                                                          center has 1,200 seats, which can
dramatically dropped global phone rates, said Brendan Read,                    accommodate workers on three eight-hour shifts. The
services editor for New York-based Call Center Magazine.                       company has leased 150,000 square feet of office space on
                                                                               six floors in the Makati business district of Manila.
Top countries for English-speaking call center expansions
include India, the leader, and Canada, the Philippines and                     Hartsaw is president of the joint venture. She has hired Ken
South Africa.                                                                  Van Vranken, who has helped her set up other call centers, to
                                                                               be onsite general manager of the Manila operation. The center
"The vast majority of call center seats will still be in the United
                                                                               will be managed via daily video conference calls with the
States, but it’s a trend to locate call and service centers outside
                                                                               Cordova headquarters, although there is a 13-hour time
of the U.S. to take advantage of low labor costs," Read said.
Hartsaw, who co-founded Centralized Marketing Co., now
                                                                               Positions at the Cordova call center include two to four weeks
called ePerformax Centers Corp. U.S., in 1988, began
                                                                               of paid training. Wages start at $8 an hour, and experienced
researching an overseas operation several years ago.
                                                                               workers can earn up to $20 an hour, she said. It’s hoped that
"We had reached full capacity at this center, and we needed to                 workers will have a high school diploma or degree/certificate
find our next expansion site," she said.                                       from a college or trade school, or previous call center training.
In Cordova, the company employs more than 150 full-time                     In the Philippines, workers will earn $2.50 an hour to start, and
employees and 400 part-time employees at 8001 Centerview                    experienced workers may earn up to $5 an hour, she said. At
Parkway. The company leases 25,000 square feet and                          an exchange rate of 52 pesos-to-$1, the $100 a week equals
occupies the third floor.                                                   about 26,000 pesos a month. The $200 a week equals about
                                                                            52,000 pesos a month, which is considered a moderate-to-
The company is an out-source call center, hiring and training
                                                                            high income in Manila, Hartsaw said.
customer service representatives to service accounts for other
companies for a fee. A call center representative works on only
                         ePERFORMAX—The Company That Pionered Performance Maximization n Page 1 of 2
                                          www.eperformax.com n 800.925.1974
Paul Parero, 24, of Cainta, Philippines, is one of eight              to 2.6 jobs because a seat can accommodate up to three
Philippines citizens to come to Cordova for three months of           shifts, he said.
paid training. He will be among the first 80 workers at the
                                                                      "We are predicting we could have 50,000 seats in the next
Manila call center. The company paid for his travel expenses,
                                                                      three or four years," Manlapig said.
including his flight.
                                                                      King White, a vice president of Dallas-based Trammell Crow
"For me, this is my career now, and it’s challenging, and I like it
                                                                      Co., is in charge of the firm’s global call center site selection
because it’s a continual learning experience," said Parero, a
                                                                      group. He is working on opening two call centers in Manila by
college graduate with a four-year degree in management.
                                                                      January for U.S. firms, including a 1,000-seat and 500-seat
He said the starting wage will allow for a moderate living by         operation.
Filipino standards, especially when there is an unemployment
                                                                      One recent study by Trammell Crow showed that in 2001
rate of about 25 percent in the Metro Manila region.
                                                                      there were 67,000 new call center jobs created worldwide, he
"All of the positions in the Philippines are full time because they   said. That included 51 percent in the U.S., 24 percent in India,
see the call center job as a career, whereas people in the            16 percent in Canada, 5 percent in the Philippines and 4
United States usually see it as a transitional job," said Hartsaw,    percent in other countries, mostly Europe.
who is traveling to the Southeast Asian country next week to
                                                                      The overseas boom for call centers began about five years
prepare for the grand opening.
                                                                      ago. India became the leader as a natural evolution of that
She said 100 percent of the calls will be to and from customers       country’s emergence as a leader in information technology
in the United States. On average, Hartsaw charges clients             and software development.
about $35 an (service representative) hour, but she will be able
                                                                      But there have been concerns in the past couple of years
to drop that cost to $17-$22 an hour for the Philippines call
                                                                      about the quality of infrastructure in India, and the Indian
                                                                      accent is harder for Americans to understand, White said.
In addition, U.S. call centers traditionally have high turnover
                                                                      India remains more competitive for high-tech-related call
rates, sometimes as much as 100 percent a year, as the work
                                                                      centers, but the Philippines is being looked at more closely
here is considered entry level. In the Philippines, however, the
                                                                      because of its cultural ties to America and because the Filipino
average turnover rate is about 10 percent or less a year, and a
                                                                      accent is not as hard to decipher.
call center job can be considered a respected career.
                                                                      "India is going to be the long-term survivor for IT help-desk
Hartsaw said she can pass the labor-cost savings onto her
                                                                      support and for back-office processing, with the Philippines
clients, which will increase her volume, but the real savings
                                                                      being the primary provider of customer service," White said.
comes from less turnover — not having continually to hire and
re-train as many workers.                                             Amit Shankardass, a native of India and solutions planning
                                                                      officer for Nashville-based ClientLogic, said he believes India
"With this expansion, we expect we’ll have sales of $20 million
                                                                      continues to offer the best-trained professionals for call
by this time next year, and sales of about $50 million in about
                                                                      centers. ClientLogic has call centers in Canada and Europe
three years," she said.
                                                                      and recently opened a 500-seat operation in Bangalore, India.
Last year, Dell Computer Corp. of Austin, Texas, which has            Besides ePerformax, he said he is not aware of any other Mid-
major manufacturing operations in Nashville, took bids for            South call center companies that have also taken the overseas
plans to add to its out-sourced call center capacity. Hartsaw         plunge.
said she bid on that project, but failed partially because she
                                                                      He said his company continues to work on its accent reduction
didn’t have the capacity that Dell needed. In the end, Dell
                                                                      programs in all countries.
opened an additional site in India, the company said. But
Hartsaw said she is hopeful that the next time a large project        "We want a seamless operation regardless of geographic
becomes available, she will have the capacity to make a               location."
successful bid.
                                                                      Hartsaw said while some had feared that creating jobs in
Romulo Manlapig, special trade representative based in New            Manila would cause job reductions in Cordova, the move is
York City for the Philippines government, said he met with            actually creating more opportunities here, especially in
Hartsaw and her staff several months ago in Chicago to                management.
discuss the benefits of a Philippines operation.
                                                                      "We are expanding our 180-seat operation here, and we’re
He said the Philippines government is aggressively seeking            going to 250 seats in the next six months," she said. "That’s
overseas investors and call center operators, and the country         because the Philippine venture is creating more business, and
wants to be a world leader in the industry in the next decade.        most of our trainers and facility support people will be here."
While there were an estimated 6,000 call center seats in the          n
Philippines several years ago, that figure has doubled to about
12,000 today. On average, one call center seat can create 1.7

                        ePERFORMAX—The Company That Pionered Performance Maximization n Page 2 of 2
                                         www.eperformax.com n 800.925.1974

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