I work with Data Process Outsourcing, a company in the Philippines, for turning my interview recordings into transcriptions. Recently, the head of that company, Loudel Dario, informed me that her company’s rates were going up. Why? Because the Philippine peso had appreciated. Curious, I asked her to explain since I always need an education when it comes to matters concerning the global economy. Her response was so thoughtful, I’m sharing it here (with her permission), because it’s a great explanation about how even when a developing country succeeds economically, it can hurt its citizens in daily ways.

The Philippine economy is improving (a record 6.9% growth in the first quarter of 2007), the peso has appreciated by 20% since October of last year, exports have increased by 13% so far this year, foreign direct investments have been pouring in since last year, recording 26% growth last year.

Some of the reasons noted by economists for this positive economy include the record $12.8 billion sent home by overseas Filipino workers last year, comprising of 8 million Filipinos making a living abroad (they comprise 10% of the entire recorded population of the country), as well as by the sharp reduction in government deficit brought about by the implementation of new tax laws and revenue boosting measures.

The government is resting on their laurels, celebrating and proclaiming their achievements to the rest of the world, officials and the wealthy beaming with pride from side to side. Everything seems to be doing well for the country...

...except that this is not being felt by the ordinary Filipinos, numbering more than 80 million people. Prices of goods in the market have been rising together with the mercury in our thermometers as we experience the heat of summer. As the beginning of the school year approaches, increases in tuition fees (15% increases annually) are crushing wallets of households. In spite of the strong peso, fuel prices are rising, together with the prices of basic services like power and water. A stronger economy is forcing the ordinary Filipino people to experience “growth” pains. This is the reason for the record-breaking remittance of the overseas Filipino workers. They sent more dollars this year only so their families can catch up with the rising cost of living.

The sales spiel of the government in promoting the nation is that we are a source of highly-qualified, low-salaried workers. Calls by the labor sector to raise wages are denied. The Philippines is an exporting country, be it for goods or for services, and an appreciation of the peso means fewer pesos for every dollar earned. Export companies would have to decide - do we raise prices of products and services? Customers in affluent countries may understand and feel for the Philippine companies, but business is business. This would mean tougher competition in the international arena? So, the other alternative is do we pull the strings and cut down on costs? The first usually affected by cost cutting measures are the workers. Either their benefits get cut or their contracts are cut short.

Presently, we the Filipinos find ourselves in this vicious cycle. Even the National Economic Development Authority, a government agency, has stated in a paper, “In a strange way, we are being punished for our own success.”

It is time for the government to sit down for a reality-check and find out the actual situation of the more than 80 milllion people of its constituents. Now with elections just completed, and new officials are in position, let’s get down to business, think out of the box, and rally the people to a well-deserved, more than just-subsistence-level of life.

David Scott Lewis, a guy I love to interview, has landed at Startech, and he's blogging over at Sandhill. Through the marvels of syndication, he'll soon be blogging here too, as soon as I get my administrative act together. Plus, we'll be running a new interview with him, to get the latest on where the action is in China's software and services industries.

If you haven't read David's writings, you're in for a treat. He's articulate, scary-smart, fast talking and plenty fun.

Zinnov, which does a bit of blogging here, and SVB India Advisors, recently came out with a 600-page report on "compensation and benefits" specifically for tech companies in India. In an executive brief (which runs 32 pages), that Sandhill.com is running, you'll learn such interesting tidbits as these:

• The engineering function saw an average salary increase for 2006 of 16%.
• For tech support and operations support functions, the increase was 14%.
• The average turnover rate was 13%.
• Raises typically happen in March and April.
• Signing bonuses are gaining popularity, to offset options or a bonus a given candidate was expecting to receive before he or she jumped ship.

Interestingly, the total industry average salaries in 2006 for product engineering companies actually dipped 6%. Why? The talent pool is too small. That's driving companies to bring in "freshers" (Americans know them as newbies), people coming in with zero to two years of experience, who get lower salaries, thereby depressing the overall salary level.

If you're in a position to care about compensation for this type of company in India, this might be worth ordering. Funny thing, though. I can't figure out how you're supposed to order it, other than contacting info@zinnov.com or Roma David at rdavid (at) svb.com and asking.

In January I wrote about OnForce, an online exchange that hooks up people and companies that need on-site technical help with people and companies that provide that help.

I recently had a demo of a new generation of the service that adds a ranking capability to the selection of a service provider or individual. "PowerMatch" uses an algorithm to derive a score that helps match up a given IT service buyer with the most qualified provider.

The score is based on a dozen or so criteria, including proximity to the location of the service event, the degree of fit between the provider's skills and the tasks being put out for a match, the brands of hardware and software involved and the rankings provided by previous customers for a given provider.

As I show in these screenshots, the buyer provides information about the job that needs to be done, location and what he or she is willing to pay for that work. The system provides a list of service providers that fit the criteria. From there, the buyer can select several to put the work out to and make a decision about which provider gets the job.

As of this writing, OnForce had 10,733 active service providers in its database, a median time to acceptance of a posted job of 15 minutes, and an average service fee of $159.65.

This ranking capability is a compelling addition to a cool service that makes it even valuable.

I am Shared Services Exchange right now at the lovely Chateau Elan Winery & Resort outside of Atlanta.

Let me share some of the insights I've picked up in sessions, which all feature the heads of various shared services organizations at blue-chip companies.

Steve Peterson, executive VP for Cummins, the $11.4 billion engines/power generation/components/distribution company, reports that his firm moved from an environment that had 60 to 70 different desktops in use, over 200 different laptop models and 4,000 software applications to a company with a single desktop, a single type of laptop and a greatly reduced number of applications. How?

One rather obvious technique was simply putting a price on every single component it provides. It's $85 a month per person for a computer, which includes hardware, software and support. .If you want to use Lotus Notes, that's $20 a month. Where business units or plants want to hold onto their old platforms, he said, "We're going to start charging big bucks for things being used by fewer than 10 people.”

That same standardization and automation approach has been used in HR administration, supply chain, call centers and order processing.

Prior to shared services, the businesses had no concept of cost structures related to the services they were getting. Now they know down to the line items.

The revenue generated through those component charges covers the cost of providing that service. Plus, the shared services organization has a P&L and it is trying to grow the business. The overall goal: "We want to be the preferred outsource services to Cummins,” said Peterson. The clock is ticking; after five years of mandated use of the shared services organization, the businesses can decide to go to outside vendors.