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Philips
Philips set to reap the rewards of payroll outsourcing
Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 31.8 billion in 2002. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 184,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems.
In the Philippines, Philips is one of the biggest business organizations in the country employing an estimated 5,000 Filipinos in marketing and manufacturing activities. It has made great strides towards becoming a fixture in every aspect of the Filipino’s life, either in the homes with its consumer electronics, lighting products, domestic appliances and personal care products, or in business and medical electronics.
At Philips, the company only has one goal: to make things better by keeping the Filipinos in step with the latest digital technological developments at any time and any place: at home, at work or on the move.
Going into BPO
Just like any other market leading multinational company, Philips has realized that in order to be competitive in the market, certain business strategies should be implemented. The company has set its eyes on Business Process Outsourcing (BPO) as a type of service that greatly improves operations and results in boosting company productivity.
“Most companies are now going into BPO”, said Daisy E. Enriquez, Chief Financial Officer of Philips. Indeed this statement reflects the emergence of BPO as a type of service that will be beneficial for businesses like Philips.
She added, “The only way to fully realize the benefits of BPO is by implementing it. Other multinational companies have already implemented BPO and they are reaping its rewards. The same will be true for Philips.”
Philips outsourced its payroll division from Fujitsu Philippines, Inc (FPI) through FPI’s manufacturing software services subsidiary, UniServ Systems International, Inc.
According to Enriquez, the company’s back-office function was centralized before. A change in organization caused Philips to go into decentralization, whereby each of the product division had its own accounting, human resource, and logistics functions among others. This move was costly and at the same time duplication of work set in. Through outsourcing the payroll process, this problem was eliminated.
Ms. Daisy E. Enriquez (CFO for Philips)
Boosting productivity
Outsourcing the payroll process at Philips started in January 2003. The implementation proper started with the migration process from Philips' system to FPI's. Target date for going live is the end of February.
The outsourcing project will also include the payroll portal whereby employees can course their inquiries and other concerns online. This will relieve the HR staff of attending to the employees directly about their inquiries, thus saving everybody time and enabling HR to focus on more important activities.
According to Enriquez, business process outsourcing paved the way for the reduction of manpower, which in turn ultimately led to reduction of cost. Management can now focus on core business activities such as planning and implementation rather than looking into details of the company’s daily operations such as payroll. This set of benefits definitely helped Philips in boosting productivity and improving operations.
