The business process outsourcing industry in the Philippines has grown 46% annually since 2006. This boom is led by demand for offshore call centers. To date, there are 788 call centers in 20 key locations in the country, including in Mindanao. The Philippines holds a major portion of the global outsourcing market, due in large part to the English proficiency of most Filipinos. The country’s call centers count among their clients giant multinationals in the United States, Europe, Middle East, and Asia.
Start of BPO in the Philippines – Accenture
Business Process Outsourcing in the Philippines significantly started by Accenture in 1992. Much has been attributed to Frank Holz, the Partner responsible for developing and marketing the first Global Resource Center in Manila. Its main facility was located at the Robinson’s Cybergate 2 Tower in Mandaluyong City, with around 5,000 seats. The Center also has 7 other major call center facilities in different key locations in the country. Majority of Accenture employees are IT professionals performing system design and software application development, as well as application management and maintenance. Recently, Accenture is venturing toward tele-services to support clients with voice requirements.
SPi Global was founded by New Zealand expatriate Alan Fraser in 1980 (recently acquired by ePLDT). Although the Company started with simple data entry work and as content outsourcing provider, SPi has widened its service portfolio in 1997 through CEO Ernest Cu. The Company now provides Content Editorial and Production; Content Coding, Abstracting and Indexing, and Electronic Data Discovery; Content Transcription; and Transaction Processing for the Healthcare, Legal, Publishing and Transaction markets. SPi’s software development is dedicated to creating common platforms for its other practices. SPi Global is now one of the world’s largest and most diversified Knowledge Process Outsourcing (KPO) and Customer Relationship Management (CRM) service providers in the industry in terms of clients, geographic presence, and capabilities.
In July 2006, ePLDT Ventus has become the forefront of the local BPO game with 11,000 employees distributed across 26 locations in North America, Europe, and Asia. The Company formerly had a stake in one of the early call center players, eTelecare Global Solutions, which it subsequently divested itself from in April 2004 as a publicly listed company (with SPI holding a majority share).
eTelecare was founded in November 1999 by Jim Franke and Derek Holley, two McKinsey alumni of its call center practice. Currently the Ayala Corp owns 11% of eTelecare. The Company launched its first program in the third quarter of 2000, and currently focuses on complex transactions for American Express, AOL, Cingular Wireless, Dell, Intuit, Sprint Nextel Corporation and Vonage delivered from four delivery centers in the Philippines and seven in the United States, with approximately 9,800 employees.
With revenue of $195.1 million and operating margin of 9.9% eTelecare is considered one of the founding call centers in the Philippines and its vice president and general manager Benedict Hernandez is widely respected and credited with the firm’s operational success. Hernandez is also on the Board of the Contact Center Association of the Philippines (CCAP) and has been an articulate advocate of BPO growth in the Philippines.
SYKES – First Multinational BPO Company in the Philippines
SYKES entered the Philippines two years before eTelecare, in 1997, and is considered the first multinational BPO player to enter the Philippines. SYKES’ entrance was the result of its acquisition of 19 seats from McQueen LTD. Prior to acquisition, McQueen was headquartered in Galashiels, Scotland focusing on inbound call center support, software fulfillment and customer service application and foreign language translation and localization.
Another early mover was PeopleSupport, co-founded in 1998 by David Nash and Lance Rosenzweig. The model was very similar to 24/7 Customer’s — email and chat support for dot-com clients. After struggling from their Los Angeles outsourcing center PeopleSupport, in 2000 and 2001, restructured its business by relocating outsourcing operations first to St. Louis, Missouri and then to the Philippines. Subsequently the company closed operations in St. Louis and completed the migration of operations to the Philippines. and closed their facility in St. Louis. Essentially the move to the Philippines not only rescued the Company, but invigorated them into a significant “local” player with eight outsourcing facilities and, roughly 8,400 personnel in the Philippines, 400 people in Costa Rica and over 150 in the U.S.
At the outset of operations in the Philippines, PeopleSupport employed 40 employees. This move was executed at the behest of Rainerio (“Bong”) Borja President of PeopleSupport Philippines and Vice President of Global Operations since May 2000. Bong is widely regarded as the most articulate and consistent voice of the Philippines BPO industry and the architect of much of the industry’s growth.
Future of Business Process Outsourcing in the Philippines (2012-Beyond)
For 2012, BPO in the Philippines is expected to be a key major export sector in the country. The promising growth in investments fostered by BPO activities is expected to result into a 5% economic growth rate for the year. This is so since BPO activities in the Philippines account for 30% of the country’s export earnings, which, with the help of sustained overseas remittances, would potentially drive consumption and enhance the country’s foreign reserves.
With these hopeful projections in mind, BPO in the Philippines will take the shape of an export hub that showcases to the global market various forms of goods and services. As such, Business Process Outsourcing for 2012 will take the following shapes among others:
Mobile Apps Process Outsourcing
The rise of smart phones and tablets will create outsourcing demands from clients who process mobile apps monitoring and auditing.
Social Media Contact Support
The popularity and influence of social networks will produce demands in satisfying social network patrons. Assessing the comments, complaints, and suggestions of social network users will exhaust the core process outsourcing demands of this activity.
Public-Private Partnership Venture in BPO
The success of the global BPO industry will command further and stronger ties between the private and the public sectors. As such, most economies would strengthen policy-based alliances between private and public stakeholders so as to relish from the fiscal benefits of Business Process Outsourcing.
BPO Progress Despite Global Financial Uncertainties
The economic uncertainties in developed countries such as the UK and US would be providential for the BPO industry. The central premise of outsourcing, which is providing solutions at cheaper cost, would allow investors to expand and continue their operations by means of outsourcing. As such, developing countries that provide cheaper labor and a large pool of well trained workforce would greatly benefit from such economic difficulties in developed nations.
With these new trends in the outsourcing industry, BPO in the Philippines must be flexible enough to meet their demands. As such, it should widen its horizon and innovate more in training and polishing its pool of talents. The industry is young and promising and by being such, 2012 commands further creativity and innovation for every stakeholder.