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Manila Madness – Market roaring along While India and China are getting the lion’s share of attention in the outsourcing space due to their shear size and scale, the Philippines is building is reputation and a viable and even desirable alternative for outsourcing. And while the initial jewel is the customer facing services such as call center and help desk, high quality back office solutions are also emerging as compelling offerings.
An interesting side benefit of the India and China phenomenon is that countries like the Philippines are being dragged along in the slipstream. For example, the Philippines Business Process Outsourcing (BPO) industry has been praised by its Government as being primarily responsible for projecting the Philippines as an attractive outsourcing location. The country takes pride in the productive workforce that possessed the necessary skills to step up to the plate and match and in some cases outperform world standards. The main reason that it has become so easy for advanced economies to source back office support in Asia is because telecommunications costs have flattened at the very point in time that the Philippines have produced a highly skilled generation of information workers, eager to embrace a life-changing opportunity.
The BPO sector in the Philippines now employs over 130,000 workers. This workforce is divided in the sectors of Back Office Processing that includes services like legal, medical and general publishing, animation, accounting, and software development. Front Office activities include help desk, lead generation, debt collection, and customer care programs, usually delivered via contact centers. It is expected that the employment numbers in this sector will increase to 800,000 by 2010. That is exciting growth for a country that had less that 20,000 people in the sector five years ago.
It is now accepted that first world companies move for the price drop but stay for the quality and benefits that come from off shoring. By all accounts the off shoring value proposition is evolving beyond labor arbitrage to include elements such as quality and productivity improvements.
I was just in Manila this past month and to say it is bustling with opportunities is an understatement. Just try getting a room in a decent hotel. They are full of American executives doing site tours of BPO facilities or doing transition projects for deals already done. We were involved in a site tour of a leading Filipino facility (eVentus) at Fort Bonifacio in Manila, it was extremely impressive and the quality of management across the board was outstanding.
An interesting development in the Philippines is the merger and acquisition activities happening in the marketplace. We are seeing Filipino BPO companies sizing up other Filipino companies and Indian BPO companies aggressively eyeing up the Philippines market as well. We are witnessing the establishment of the first Pan Asia Pacific delivery models. This is where companies play to the strengths of their service offer from different countries, i.e., you might put your software development into India and your relational based customer support into the Philippines.
More often, we are hearing about financial back office processes going offshore as well on the back of the customer support programs. Furthermore, we are noticing that across the sector Filipino companies are aggressively setting up sales offices in the US. There is a sense of latent entrepreneurial activity that is now coming to the fore as the players become more confident and really start to stretch their wings.
-- Martin Conboy
(Martin Conboy is the Founder and CEO of FooBooOnLine.com. He has extensive knowledge of Asia Pacific market trends and he is one of the most quoted commentators in the call center and outsourcing space in the in the Asia Pacific.)
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