Every year, the business process outsourcing (BPO) industry grows by leaps and bounds. International-investment consultancy firm McKinsey & Company foresee that in 2010, the demand for outsourcing services will reach $180 billion, with emphasis on customer service, finance and accounting, and human resourcing.
The Philippine government aims to sustain this rapid growth by offering monetary and nonfiscal incentives that are meant to attract the attention of foreign direct investors in call center industries as part of the 2007 Investment Priorities Plan. This healthy economic environment that draws foreign investors to locate their operations in the country has earned the Philippines the honor of Best Offshoring Destination of the Year (2009), presented by the United Kingdom’s National Outsourcing Association. This is the second time the Philippines has received this honor.
Inexpensive operational and labor costs plus an English-speaking workforce have made the Philippines a choice location for the BPO industry. According to the U.S.-based Meta Group, the Philippines is number one in the availability of knowledge-based jobs and workers worldwide and ranked fourth in Asia in terms of labor quality. In addition to a multiskilled labor force, the country also competes in the quality of its managers and IT staff and engineers.
In the near future, experts predict a shift in the trend in primary business requirements, from cost-effectiveness to skills, quality, and competence. This development will further strengthen the Philippines’s status as an emerging global leader in the BPO industry.
Call Centers in the Philippines
The call center industry accounts for 80% of BPOs in the Philippines. It has been dubbed as the sunshine industry by the government because of its massive expansion over the last ten years. What started out as providers of email response and managing services has come a long way. Today, call centers have capabilities for nearly all sorts of customer relations ranging from customer care, education, financial services, technical support, travel support, online business-to-customer support, and online business-to-business support.
The calls managed by Philippine call centers can be categorized as either outbound or inbound calls. Outbound, usually initiated by the agent, include advisories, sales verification, customer services, and surveys. Inbound calls, initiated by the client, include inquiries, technical help, complaints, and customer service.
Publishing
Over the last three years, offshore publishing services have transitioned from low-value services to high-value services such as original design, testing and assessment, and e-learning tools. This influx of technology has caused a rise in the publishing BPO industry. From $660 million in 2008, the industry is expected to reach a $1.2 billion annual market in 2012, as reported by market research firm ValueNotes.
India is currently the favored publishing outsourcing hub, with 35,500 people in direct employment. Although the BPO industry in the Philippines and India began at the same time, the Philippines is approximately one-fifth of that of the Indian publishing BPO in terms of manpower. However, most large- and mid-sized players in the Philippines have been growing at an estimate of 20%–30% annually for the last few years.
Medical Transcription
BPO companies who focus on this area do discharge summaries, medical reports, operative reports, therapy notes, and other such medical documents using advanced software and equipment from the U.S. At a 98% average-accuracy rate, a medical transcriptionist is able to transcribe up to 1,000 lines per day. This industry is currently pursuing certification for individual companies’ services to promote the country’s capabilities herein.
Finance, Logistics, and Accounting
Shared corporate backroom operations has been growing in the Philippines owing to the country’s rich pool of low-cost yet English- and IT-proficient business, accounting, HRM, and engineering graduates. These professionals are exceptional for their customer service orientation, superior work ethic, and high degree of trainability, flexibility, multicultural adaptability, and loyalty.
Software Development and Animation
The Philippines does well in the global market for animation due to the ever increasing popularity of animation as an entertainment medium. Animation is no longer limited to TV and movies, but it is also now used for computer games, advertising, Internet content, and educational tools. Many companies in Europe and the United States are now coming to the Philippines to avail of low-cost, high-quality software and Web development.
Outsourcing Business in the Period of Global Recession
Despite the recent economic downturn in the U.S., a well-known U.S. outsourcing giant declared plans for five new customer-contact centers in the Philippines, signifying jobs for at least 7,000 people. The recession also prompted the significant loss of jobs for overseas Filipino workers, prompting the government to provide Filipino domestic helpers government-sponsored training to become call center agents. The project aims to sharpen English proficiency of applicants and provide call center training for 40 hours at $700 per student, which the Philippine government has shouldered.
CONCLUSION: The Philippines as an Increasingly Attractive BPO DestinationOver the last few years, the Philippines has been gaining a lot of momentum as an offshoring destination. Important attributes like cultural proximity to the U.S. and design and copyediting skills have made the Philippines a formidable competitor to India in the BPO segment. The Philippine workforce has been continually proving itself capable of increasingly higher-value services as evidenced by the 20%–30% yearly increase of medium to large vendors that now offer end-to-end services.