Outsourcing To Philippines

By Henry Montgomery
Wednesday - April 02, 2008
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Bernice Parsons, Henry Montgomery, Rita Kristjansdottir, Scott Power and Hmone Putz
Bernice Parsons, Henry Montgomery, Rita Kristjansdottir, Scott Power and Hmone Putz

By Henry Montgomery
Founder and Chairman of MontPac Outsourcing

The Virtues of Outsourcing and Globalization. What virtues? Outsourcing? Globalization? Jobs exported to Third World countries? Layoffs? Difficulties in understanding tech support persons with strong accents? Bad stuff, no?

Well, yes and no.

Globalization is an epochal change with extraordinary impact on our daily lives and our careers. There are always going to be painful elements to any epochal change.

A perfect example was the Industrial Revolution. The Industrial Revolution created a new urban class of workers that came from the farms of the United States or immigrated to the U.S. from various foreign countries. You think globalization is tough? Read Upton Sinclair’s famous book of oppression, sexual harassment and economic struggle, The Jungle. Those were truly terrible times.

Not that any of this minimizes the negative aspects of the forces of globalization that we are dealing with today, but it does invite, at least, an opportunity to view epochal change in an historical perspective.

After all, what does globalization mean to most of us? It means the loss of jobs to other countries that can perform those tasks at less cost.

Almost two years ago I, along with three colleagues, founded a company that provides outsourced transaction processing, accounting and financial management. Although client contact services are performed by professionals here in Hawaii so there is personal contact with our clients, all of the accounting work is performed at our subsidiary in Manila. We have a team of 17 professionals there, more than half of whom are CPAs and all of whom are thorough professionals. We provide superior, expert accounting and financial management to our clients at a much reduced cost.

Is this a bad thing? There is no way our company could have been created without the professionalism and cost-effectiveness of our Philippine colleagues. The service levels provided by our Filipino associates is often superior to in-house personnel at many U.S. companies.

The upshot? By leveraging outsourcing, small businesses can now obtain the type of “big company” accounting and financial management services at a fraction of the cost they would pay a U.S.-based accounting firm.

Our firm provides clients with in-house financial reporting, accounting and business transaction processing at our Philippine subsidiary. Our clients benefit both from the cost advantages and the expertise of our team.

The demand for services, such as those we provide, is not going to subside. In fact, as global wealth expands, the demands for services will rise as well. There aren’t enough qualified personnel in some countries available at a cost that is affordable to meet the demands.

So, when we see globalization in a balanced historical context, we can begin to view outsourcing as a positive evolutionary change that benefits both people in the U.S. and in developing countries.

In short, outsourcing provides economic benefits to underdeveloped countries, which will in turn support world peace and prosperity for all. In a small way, I believe our company is contributing to the eventual emergence of the Philippines from a Third World status to a strong partner in democracy and capitalism.

Outsourcing and globalization are not all that bad.

Henry Montgomery is Chairman and CEO of Montgomery Pacific Outsourcing (www.montpacoutsourcing.com), which provide Hawaii enterprises with in-house professional accounting, transaction processing and financial management and reporting on an outsourced basis.


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