Tech Mahindra to expand Phl operations

MANILA, Philippines - Indian business process outsourcing (BPO) giant Tech Mahindra and its sister company Mahindra Satyam have expressed their interest in expanding operations in the Philippines due to the rapid growth of the BPO sector in the country.

“The Philippines is fast becoming the country of choice for BPO investors because of the similarity of culture between the Philippines and our western clients, coupled with the lower cost of operations in the country,” Tech Mahindra president and chairman Sujit Baksi said yesterday.

Baksi also pointed out that investors find it risky to invest in the BPO industry in India due to to the sector’s oversaturation in that country, thus making the Philippines’ BPO industry, which is currently in the developing stage, attractive to investors.

“To that end, we will be investing $240 million over the next three years to bolster our operations in the Asia Pacific region,” he added.

Tech Mahindra entered the Philippine BPO industry in 2010 when it opened its first call center and back office processes service in Eastwood. Now, the company has over 1800 employees, nearly all of which are Filipinos, and it has opened another operations office in Manila and one in Cebu.

 “We currently have some 1,800 employees, all of which are Filipinos except for three positions which are being handled by foreign nationals. Eighty percent of our employees work in our voice services such as call centers while the remaining 20 percent are in non-voice services such as IT services and analytics. We have 1,300 call center seats working 24/7 and we handle 550,000 calls per month while our non-voice services handles 150,000 transactions per month,” Baksi said.

Tech Mahindra is currently handling five clients in the United States, one client in the United Kingdom and one client in the Philippines, the names of which Baksin refused to divulge, citing client privacy agreements between the companies.

According to a study done by the World Bank, there will be 100,000 jobs that will be available in the BPO industry in the Philippines this year. However, the quality of job applicants has lowered as more companies open their doors to undergraduates who lack the necessary skills for the job. This is being addressed by the Business Processing Association of the Philippines (BPAP) which has tied up with TESDA in offering skills and language training for individuals interested in entering the BPO industry.

According to Baksi, Tech Mahindra has taken steps to address this as well with stricter hiring policies as well as offering scholarships for undergraduate employees.

“We stick to a global hiring standard. All our employees must be approved by not just the HR office, but also with the Quality office and Team Training office. This is the only way we can assure our clients that we can offer a high level of quality on our services,” he said.

“We also offer scholarship programs for deserving undergraduate employees who are interested in finishing their studies. This assures us that our employees have the chance to grow and lower our attrition rate as well,” he added.

The scholarship program has lowered the attrition rate of Tech Mahindra to 21.1 percent, nearly one-fourth of the industry average.

However, Baksi said he is optimistic that the BPO industry will remain robust in the Philippines in the years to come.

“I think that the Philippines will overtake India in voice services soon. In non-voice, perhaps not in the near future, but that is only due to the slightly higher education Indian graduate receive due to the influence of the British Empire in our educational system. But I am happy with the work being done by the government to upgrade the educational system in the Philippines,” he explained.

The company started operations as a systems integrator and IT services provider in 2004, earning $160 million during that year, while 2011 revenues has reached $1.12 billion dollars. It has offices in over 54 countries worldwide and clients that have tapped Tech Mahindra for its services include market leaders in different fields of business such as oil firms, pharmaceuticals and wealth management companies.

It offers a range of services such as cost transformation, application transformation and migration, cloud services, and analytics.