DEVELOP INDONESIAN HUMAN RESOURCES FOR GLOBAL OUTSOURCING INDUSTRIESPREPARED BY :

LINKQ

PRESENTATION OBJECTIVES :To provide input for Indonesian Education Department to create program of specialist (high school level) to compete with other countries (India & Philiphines) as the main players in global outsourcing industriesTo develop our people skills, quality and availability for the industries to substitute our current offshore workers to be more higher level of resources

GLOBAL OUTSOURCING INDUSTRIES POTENTIALS SOURCE: TECHNOLOGY PARTNERS INTERNATIONAL INC.

OUTSOURCING POTENTIALS INCREASED ANNUALY BY 7 % (Technology Partners International Data)2007 Annual Revenue to Service providers around $78.7 Billiony/y growth : 7.3%; 5 year CAGR : 5.3%; 2,701 active contracts2015 potentials available around $ 125 Billion with estimated growth by 7% per year

OUTSOURCING TERMINOLOGIESBY TYPE OF FUNCTIONS OUTSOURCED : - IT Outsourcing (ITO) : delegating some or (all) of the IT functions to one or more external partner(s) - Business Process Outsourcing (BPO): delegating fully or partially business functions to one or more partner(s)BY LOCATION WHERE THE OUTSOURCED SERVICE IS PROVIDED : - On-site : the service is provided at the customer site - Off-site : the service is provided off customer site

OUTSOURCING TERMINOLOGIES CONTDBY GEOGRAPHICAL PROXIMITY OF THE OUTSOURCING PARTNERS - On-shore outsourcing : outsourcing within the country - Near-shore outsourcing : outsourcing to a firm with delivery of service is not far outside the country (nearby territory) - Off-shoring or off-shore outsourcing is to outsource the business functions to a company outside the country or overseas e.g : India, Philiphines

BPO AREA OF BUSINESS FUNCTIONSContact/ Call Centre outsourcingHuman Resources OutsourcingClaims Processing OutsourcingBack Office Outsourcing : Finance & accounting, Human Resources management, payment services, Payroll, customer care, supply management, marketing, transcription(medical, legal), data entry, backoffice operation, Help Desk, Reception, etc.

WHERE DOES INDONESIA STAND IN THIS BPO INDUSTRY?Based on AT Kearney report, Indonesia has increased its overall attractiveness from 13th in 2005 into 6th in 2007 and become the 5th in 2009 for global BPO country direction.

Refer to A.T Kearney Global Services Location Index, 2009

QUALITY OF WORKFORCE IS IMPORTANT IN BPO

3 (THREE) CATEGORIES AS INDEX METRICS FOR OFFSHORING ATTRACTIVENESS ( Source : A.T. Kearney)Financial Structure Attractiveness (40%)People skills and availability (30%)Business Environment (30%)

INDEX METRICS (Source : A.T.Kearney)

INDONESIA AS POTENTIAL COUNTRY FOR BPO FACTS :Indonesia has 8.08 score in financial attractiveness after India with score 8.15. Philipines has 7.98 score.In term of business environment; Indonesia score is 3.31; compare to India 4.35 and Philipines 4.12 in score.Indonesia has people skills and availability score of 4.89; India s score is 8.26 and Philipines score is 3.90.

STRENGTH :Indonesia has a large population (3rd) after China and IndiaHas a large workforce in low costCompetitive wages, rent and electrical costsRelatively low tax burden

CHALLENGES FOR INDONESIA IN BPO INDUSTRY Indonesia to do education enforcement to improve and develop quality of workforce to increase the score in people skills and availability to compete in the BPO markets Indonesia continuously improves the business environment with political and economic stability in the country to compete with the main BPO players (India & Philipines) Indonesia maintains as the second highest score after India in financial attractiveness Indonesia has a high potential to become a BPO player after India in the future and compete with Philipines.

Note : A.T. KEARNEY Global Services Location Index 2009, shows INDONESIA has increased its overall attractiveness to the 5th place

Note :A.T. KEARNEY Global Services Index 2009 shows Indonesia stands still in score for people skills attractiveness and makes the overall attractiveness become 5.69 (slightly reduced)

Note :A.T.Kearney Global Services Index 2009 shows Indonesia remain similar in the financial attractiveness from 2007 and slightly reduction in the business attractiveness; with overall attractiveness slightly reduced; eventhough has moved up to the 5th place.

EDUCATIONAL ENFORCEMENT:

Improved quality of education in English Speaking skills and computer literacy/ applied

Today, the availability of people with english speaking skills is mostly overqualified (more high level) and considered as high cost workforce

INDONESIA WORKFORCE/ HUMAN RESOURCES CULTURE & CHARACTERS(Link:Q experience)Indonesia already has a good basic culture andcharacters of workforce and can be trained tofit in the requirement of this outsourcingindustry : - Patient- Politeness- Accuracy- Eager to learn

FAST TRACK SOLUTION To build vocational school (equal to high school level) specializing in : - English Language (ESL Method) - Hospitality - Applied Computer/ IT literate

To support and show global exposure in English language speaking skills of its workforce

Note : ESL English as a Second Language more conversation/ communication and writing than grammar studies

TARGETED WORKFORCE DEVELOPMENT FOR BPO INDUSTRYUndergraduate/ postgraduate level of workforceVocational school/ high school level of workforceLower level education of workforce/ TKI

INDONESIA TARGET ACHIEVEMENTThis fast track education will generate HR quality in a greater amount to fill in the BPO industriesTo substitute Indonesian workforce in a higher level of workforce for overseas market (previously TKI)Indonesia will significantly develop middle level of resources in the countryTo generate higher foreign exchange income for IndonesiaIncrease huge number of intelectual voter, to improve the quality of future election result

POTENTIALS LOCATION AS PILOT PROJECT (DISCUSSION)Special Vocational School : Targeted on English speaking, Hospitality & Applied Computer

Pilot locations for development : Bali, Jogyakarta, Ambon, etc.

Teachers : young fellows or visitors from Australia, USA or other English speaking countries