Rising Peso, Falling BPO
About 90% of all BPO/Call Center transactions being managed in the Philippines have North American clients or contracts. The fall of the American dollar will not stop global outsourcing (rough estimates say that only less than 5% of jobs are being done offshore) and in fact, will aggressively see a ramp to counter the effect of rising cost of business in the US. On the other hand, it is equally true that global outsourcing has always been dictated by quality, cost and availability. In an industry where revenue is defined by one currency and expenses is defined by another, it is ideal that the exchange rate remain relatively stable to ensure that yearend target for margins are consistent. But what do you do when the exchange rate fluctuates by almost 12% within a six month period? (e.g. from PHP 47 to PHP 41 versus USD 1) companies that are targeting net profit margins of 35% - 40% will have to contend with managing margins at roughly a quarter less than their original targets. Where a...