NEW DELHI (March 5) — The Philippines’s IT and Business Process Outsourcing Services (BPO) firms may soon a get a break as news about its major competitor’s financial practices here are revealed.
Ramalinga Raju, chairman and founder of Satyam Computer Services, a leading Indian outsourcing company that serves more than a third of the Fortune 500, resigned March 4 after revealing that he had significantly inflated the company’s earnings and assets for years.
Satyam serves as the back office for some of the largest banks, manufacturers, health care and media companies in the world, handling everything from computer systems to customer service.
This development may give a major impact on Satyam’s business with its clients and divert their business to the Philippines.
Earlier, Philippine Congressman Joseph Santiago, chair of the House of Representatives’ information and technology committee, had said the Philippines could reap a bonanza with more Western firms as a result of Satyam’s financial scandal disclosure.
The disclosures about Satyam would “force Western firms to rethink their plans to do new business, or contract out additional back office work to BPO providers based in India,” said Santiago.
He added that the “the Philippines is in a superb position to capture whatever outsourcing business that India stands to lose on account of Satyam’s troubles.”
SanDisk, the world’s largest supplier of flash memory cards, is reported to face problems like project delays and productivity loss owing to the current of at Satyam. According to The Economic Times, if Satyam were to lose key personnel, declare bankruptcy or unable to perform at the expected level, SanDisk would have to engage a new integrator, which would likely result in significant delays in implementation and additional costs.
The paper also said that Nissan and Pfizer have invited bids from other vendors to move the project away.Soon after the Mumbai terror attacks too there was speculation in The Philippines that local IT firms would be the beneficiaries of the uncertainties caused by the attacks and security concerns of international corporations.
In recent years, the Philippines has emerged as an outsourcing services hub, but Philippine IT and BPO solution providers do a mere fraction of the business conducted by India. According to Philippine Software Industry Association figures, the country’s IT firms earned $423 million in 2007, up from $200 million in 2008.