Niyamath Parveez

Being one of the biggest companies in the world means that a firm can withstand some bad news and negative bubbles from time to time but there still has to be some management of the situations faced. Around the world, the fact that a number of Coca Cola employees in the North of Ireland are facing losing their jobs is hardly going to rock the company around the world but the personal loss on individuals, families and communities in the local region is going to be huge. Of course, this is going to be balanced out by the fact that another area will benefit and prosper from the number of jobs that are being brought to their area through the benefits of outsourcing. There is always a flip side to decisions taken and the anger and resentment that is currently brewing will be balanced out by the happiness that will follow the new jobs. However, this will be of no comfort to the people who are currently facing losing their job.

This has led to the local Labor council in the North of Ireland making recommendation that Coca Cola should at least offer redundancy packages alongside the level of previous packages they offered. From the company’s point of view, they would argue that the reason behind the outsourcing decision is an economic one and if they acted upon this recommendation, their benefits would be less than projected. It is still likely that this money would be a drop in the ocean compared to the overall turnover that the Coca Cola company experiences but the best firms are always thinking about the bottom line, even if it is not a popular move for some people. It is likely that Coca Cola sales will drop in the local area where the people affected by this move will switch their allegiances to Pepsi. This move is not going to be enough to alter the axis between Coca Cola and Pepsi sales figures but it is a way for a small community to exert some influence.

The current situation in the North of Ireland has been exacerbated by the fact that 130 or so workers have taken strike action in their dispute against the Coca Cola Company and when this happens, it very rarely ends well for the striking staff. French employees have a strong history of taking strong and powerful industrial action but in Ireland and the UK, the same success rate has never been achieved. This does not bode well for the future of the plant with Coca Cola likely to cite the time lost in the past month as reason to not offer the same redundancy packages as previous former Coca Cola employees received. It is a harsh environment and both parties will be claiming that they are in the right but it is likely that nothing will deter Coca Cola from outsourcing their work abroad to reap the benefits of lower labor costs. They may be one of the biggest firms in the world but even Coca Cola are not averse to making as much profit as possible.

Coca Cola is one of the most famous brands in the entire world and any news story surrounding them is of great interest to many people. Like so many top brands, Coca Cola have managed to transcend the fact that they are a drinks manufacturer and have a fan base that is devoted as any sports fan. This can be seen in the merchandise for the company with people wearing t-shirts with the logo splashed over it and have their house full of products. Some people can’t see the company doing any wrong but it is inevitable that they will occasionally receive bad publicity. One of these instances has arisen recently with the news that Coca Cola are looking to outsource an element of their production.

Given the current economic climate, no one wants to lose their job and the local economy could be greatly affected by these outsourcing moves.
The thing that gets most people is the fact that they will believe that Coca Cola will be making more than enough money as it is. For small firms, it is easy to see that outsourcing is extremely important and taking these steps may be the difference between the firm surviving or going to the wall. However, when people consider the size and stature of Coca Cola, they will start to struggle with the concept that they need to improve their financial status. It is important to realize though that companies like Coca Cola didn’t get to their current status by making bad decisions. They know that if they can make improvements to their production facilities or make a further saving, they will do so. This is exactly what is happening in Ireland at warehouse and distribution outlets. If the outsourcing plan goes ahead, areas like Dublin, Cork, Tuam, Tipperary, Waterford and Killarney will be affected by these outsourcing plans.

A total of 130 jobs are likely to be affected and given the current levels of unemployment in Ireland, these figures are not a small matter. Any small economy would miss this level of jobs and again, the fact that it is a company like Coca Cola that is making the layoffs happen makes it more difficult for many people to comprehend. The news has not been well received and this has led to the announcement that current staff are looking to strike in protest against this decision. As always, whenever strike action is mentioned, there is usually a trade union close behind and this is the case in this latest development.

Whether these latest actions will be enough to keep people in a job or will only be enough to earn a better severance package, it is no doubt a very trying time for all concerned. It is not likely that this move to outsourcing is going to affect the sales of Coca Cola around the world but it is fair to say that the drink will be leaving a bad taste in the mouth of those affected by this latest outsourcing decision.

Everyone knows the name Intel and they are easily one of the world’s most recognized brands, sitting alongside Coca-Cola, Microsoft and Apple. In fact, you know that Intel is so successful with the fact that Apple changed their manufacturing processes in order to include the Intel chip in their macs. This is high praise indeed for any firm and shows that the power of Intel is something that can make a huge difference to any computer user. However, it is interesting to note that not even a firm like Intel is immune to the difficulties that the current credit crunch brings and the company is looking for ways to reduce their cost, to become leaner and to be more cost effective in their working.

As they can see from a whole host of companies and firms, outsourcing has become a fantastic way to reduce costs whilst obtaining a great level of skill and experience from staff well trained in the processes that the firm has to deliver. Intel may be one of the best firms operating in the market but there is always room for development and their recent decision to outsource should see them benefit in this manner too. It is the Southbridge chips that the firm has decided to outsource and the lucky recipient of this agreement is Advanced Semiconductor Engineering Inc (ASE), who is based in Taiwan. This move will enable Intel to close a number of their assembly and testing warehouses and insiders predict that the companies working revenue could rise by a figure close to 50% in the next quarter. This move indicates why outsourcing is such an attractive proposition to a great number of firms.

Of course, a firm like Intel has to be fully aware that many of their rivals and competitors are keen to learn what makes their chips tick and will attempt to copy and steal their ideas at every opportunity. This means that Intel look to take great care and have a higher level of security over their products and naturally they are mindful of the issues that may arise when using outsourcing firms. It is not that outsourcing firms are not to be trusted but any process which adds an extra layer to the process and involves more people is sadly more likely to run the risk of leaks or information escaping but Intel has made moves to keep their information and products safe from harm. Any firm based in mainland China and suspected of operating in the trade for knockoff chips and processors will not be allowed to buy chips directly from the outsourced producer. Intel are maintaining a strong control over the production and any suspected firm that wishes to buy chips from Intel will be required to purchase and interact directly with Intel. This should give the firm a greater degree of control over their product and alleviate any of the blame or concerns from the outsourced firm. This will work out for the best for all parties and indicates that outsourcing can be managed in such a way to take care of any concerns that a firm may have about security or confidentiality.

The recent news that Xerox were ploughing $100m into a new outsourcing venture in India may have led many critics and industry experts to predict that the trend towards this market was going to continue but the unpredictable nature of the market is alive and well. The ink will have barely dried on the Xerox contracts, and the firm has probably not got around to copying the documents before news of another major US firm cancelling its outsource deal in India surfaced.

Sallie Mae, responsible for the vast majority of student loans in the United States of America has announced it is pulling 2,000 jobs from its outsourcing location in India. These jobs are returning to the United States of America with Newark, New Jersey expected to be one of the recipients of this bold move. With the job market being particularly depressed, any influx of jobs in the United States will be warmly welcomed by politicians and the population as a whole which means this will certainly be viewed as a popular decision by Sallie Mae.

The importance of Sallie Mae to the US economy is not only due to the fact that it is the major loan provider to the student population but also because the firm currently manages a sum of around $180 billion in loans in the education sector and has a customer base of around 10 million people, relating to students and their parents. The firm has a tradition of using offshore outsourcing options and has centers in the Phillipenes, Bangalore and Pune. All of these centers have assisted the firm in providing loan originating, maintaining and collection activities.

Sallie Mae have almost four decades worth of experience in supporting American students and there is no doubt that they are one of the organizations that people strongly associate with America and indeed their own lives. This is because countless of people who have went through higher education will be aware of the organization and of the support they received from them which means there is a greater emotional requirement for Sallie Mae to acknowledge the mood of the nation. Bringing 2,000 jobs back to the United States over the next 18 months will not be enough by itself to move the country from these harsh economic times but at least Sallie Mae can state that they are playing their part in helping to re-stimulate the economy.

There is no doubt there is a growing trend and political movement to maintain more jobs in the United States and this means there is an opportunity for US based outsourcing firms to provide an outlet for companies who require the support and assistance of outsourcing but not the political flak that comes from moving overseas.

One such outsourcing firm is Xpanion, a company who have their headquarters in Atlanta and who mainly operate in the software field. Xpanion pared back their testing facilities from Pune to Nebraska and are just one of the firms who are hoping to entice US based companies back to working with outsourcing partners in the United States. Xpanion can point to working with illustrious companies like Goldleaf Financial Solutions, NCR and Coca Cola as a sign of the quality and capabilities they can add to the market.

Asian and European countries are not the only players in the BPO field any longer. South American countries are fast catching up, Guatemala being the latest name in the roster. Coca-Cola Enterprises have already outsourced the processing of their financial and accounting work to Guatemala-based outsourcing vendors, and more big names are expected to follow suit pretty soon.

Guatemala has always been a prime location for outsourcing jobs, and its delay in grabbing its slice of pie from the field can only be attributed to less enthusiastic advertisement of the capabilities of its population. Compared to many other South American countries, Guatemala has some significant advantages in the field of business process outsourcing, especially when it comes to handling tasks outsourced by big names in US. The principal advantages that give Guatemala a significant edge over many other countries in the outsourcing field include:

High literacy rate with impressive knowledge of English – 80% of the population learn English from the age of 5. Thus processing business operations for companies that have English as the official language is not a problem to outsourcing vendors located in Guatemala. Besides, the impressive literacy rate of 86% is good enough to provide a sizable advantage to the country in the fields of both technical and non-technical jobs.

Low average age of its working population – About 80% of the population of the country is under 30 years of age. Thus, the workforce of Guatemala is young, energetic, and prepared to work hard. Also, around 200,000 of its population are still studying in Universities, so the inclusion of thousands of freshly out-of-college, technically proficient graduates to the workforce is not far off. This is quite a lucrative prospect for outsourcers indeed.

Already a popular outsourcing destination – Several big names worldwide have already outsourced sizable fractions of their business processing to Guatemala, thereby forming a strong base and proving the potential of the country’s workforce. Some of the key names include Capgemini, Walmart, P&G, Scotiabank, etc.

Peaceful Government – 20 years of undisputed, peaceful democracy have given Guatemala the political stability required for attracting investors and outsourcers.

Well-developed telecom infrastructure – Guatemala is well known for its well-developed and stable telecommunication services. The commerce minister was spotted carrying three Blackberries to a recent conference; which bears further evidence of how tech savvy the general population can be – quite a welcoming sight for outsourcers.

Short distance from US, and same time zone – Guatemala is located very close to the US; a simple 3-hour flight could take the representative of a US-based outsourcing company to a call center in Guatemala. Those located in Asia, in contrast, will take more than half a day to reach.

Good economical condition – Guatemala has quite a flourishing economy, even in these recession-plagued times. The export of green tomatoes, coffee and bananas has picked up, while manufacturing industries continue to provide a strong backbone to the economy of the country, as always.

For these reasons, Guatemala is fast turning into quite a major player in the outsourcing field. The advantage of having a favorable location and a compatible workforce have provided the country with almost all the resources it needs to build a strong and effective outsourcing network.