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Thinking of offshoring managed services to another country? Check out this Q&A to ensure smooth transition with trusted partners.

Delegating tasks to global service centres and utilising outsourcing and offshoring managed services appear to be much more viable, cost-effective solutions, especially when your business keeps scaling through time.

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Offshoring Provider Australia

ASW - trusted offshoring provider for Australian Companies since 2011.

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IT Industry Seeks Clarity on Tax Provisions for BPO/KPO Services

IT industry body Nasscom has urged the government to clarify tax provisions that treat BPO-KPO services as intermediaries under GST rules, and scrap angel tax levied on investments in startups.

Expressing concerns over rising instances of revenue authorities treating IT-enabled services, including BPOs and KPOs, as ‘intermediary services’, Nasscom Senior Director and Public Policy Head Ashish Aggarwal said there is an urgent need to address the outstanding issue.

“These companies are in no way engaged in any facilitation/ arranging of supply of goods/services at a pre-supply stage... There is a need for clarification that BPO and KPO will not qualify as intermediary service...,” 

Aggarwal pointed out that during the last year, the GST Council had provided several clarifications on many aspects that have helped the industry.

However, there are “continued ambiguities and concerns” pertaining to determination of place of supply, blockage in working capital due to self-supplies, treatment of Head Office Branch office transactions, SEZ procurements etc that require urgent resolution, he said.

“These need to be addressed to ensure ease of business, growth and sustenance of the sector’s exports competitiveness,” 

He also called for scrapping the angel tax provision and said the focus should be on measures to incentivise startups.

“Angel investors invest at the earliest stage of the company and at the highest risk. They are critical to the creation and growth of new companies and need to be encouraged, if not incentivised,” 

Aggarwal explained that the flaw in the present approach is the focus on valuation as a means to verify the genuineness of the investment transaction.

“As is well recognised, valuations in unlisted companies are generally subjective and this is more so in the case of start-ups. Therefore, there is a need to shift the focus away from valuation,” 

The issue needs to be taken up at the earliest as “this is a matter of survival for start-ups and strengthening the startup ecosystem”, he added.

Aggarwal said the Indian IT-BPM industry today stands at $167 billion market and employs around 4 million people.

Despite the slowing down in growth rates, the industry has added about USD 24 billion revenue since FY2016 and continues to be a net hirer (over one lakh additions in FY2018).

“India is strongly placed to be the digital transformation partner for global businesses and is also home to more than 5,000 start-ups. The upcoming Budget should focus on ensuring that Indian companies remain globally competitive and ensure ease of doing business,” he said.

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Beside a detailed offshore strategy, choosing offshoring service provider proves vital in the company’s successful transition and operation in destination countries. 

The process could be quite confusing and bewildering, obviously due to the increasing number of offshore service providers in recent years. Fortunately, there are 4 factors you can use as guidelines in choosing an appropriate offshore partner for the company. 

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What are the best customer support outsourcing services?

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Where can I find call center projects like inbound, outbound and back office?

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What are some of the best outsourcing companies, and why?

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What are the best BPO or KPO companies to outsource Excel data processing to?

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Datacom Lands $76M Deal in ATO Outsourcing Spree

Datacom Lands $76M Deal in ATO Outsourcing Spree

Datacom’s customer experience and contact centre business, Datacom Connect, has won a $76.3 million multi-year outsource labor services deal with the Australian Taxation Office (ATO).

The contract win, which sees Datacom Connect renew a pre-existing arrangement with the ATO, is just one of a number of new business process outsource (BPO) deals Australia’s tax collector has just dished out to external suppliers.

The ATO has also granted Probe Group a $35.7 million deal for outsource labour services, while Stellar Asia Pacific has been granted a deal worth $49.6 million for the same services.

At the same time, Serco Global Services has been named as the recipient of an outsource labour services agreement worth more than $124 million over three years.

Serco Group reportedly renewed a pre-existing agreement with the ATO in 2012, inking a contract worth $140 million over five years, with two one year extension options.

Indeed, the ATO has used outsource providers to manage workload peaks for a number of years. The outsourcing arrangements provide flexible options to supplement the agency’s workforce.

In 2011, the ATO outsourced a component of its contact centre activities through the creation of contracts with three providers, Datacom, Serco and Stellar.

“In preparation for the expiry of these contracts the ATO undertook an open tendering activity in 2015 to meet the continuing requirements of our outsourced labour services, including contact centre services,”

The result of that tendering activity was the establishment of a supplier panel comprising six providers, including Concentrix, Datacom, Probe, Salmat, Serco and Stellar.

Earlier this year a request for quote (RFQ) was issued for a new period, beginning in November 2017 and extending until February 2020.

The RFQ ultimately resulted in the establishment of contracts with four providers: Datacom; Serco; Stellar; and Probe.

Since at least July 2013, Datacom has provided a large scale, multi-channel outsource contact centre for the ATO, after the company won a $32.5 million contract to deliver a range of contact centre services to the agency.

The four year contract followed Datacom’s earlier September 2012 appointment to the ATO’s Outsource Contact Centre Services (OCCS) panel.

“We are delighted to have been awarded this work after going through a fiercely competitive process to secure a place on the panel last year, and an extensive process to design a support model that met the ATO’S flexibility requirements," Datacom Group CEO, Jonathan Ladd, said at the time.

According to Datacom, the contact centre used to fulfil its contract obligations with the ATO has more than 500 employees, and provides customer service across multiple ATO business lines and skillsets.

The company also draws upon its contact centre capabilities to play a role in the ATO's Outsource Community Improvement Program (OCIP).

The IT services firm’s BPO business is headed up by the Kirsty Hunter, managing director of Datacom Connect and Asia.