Saturday, 24 January 2009

Philippines expected to emerge as premier non-voice outsourcing hub

BusinessWorld Online

The Philippines, whose offshore market has grown 46% annually since 2004, is poised to emerge as a leading destination for non-voice business process outsourcing (BPO) work for customers looking beyond India, Dallas, Texas-based Everest Research Institute said in a statement on Friday.

The $35-billion global BPO market is projected to grow to $220 billion-$280 billion by 2012, with non-voice work accounting for 90% of that growth.

Although a number of providers have already tapped the Philippines for a wide range of non-voice functions, there is limited awareness of the Philippines’ capability in non-voice services, which has grown significantly over the past three years, according to the Institute’s study, titled: "The Silent Knight: The Philippines’ Emerging Non-Voice BPO Capability." The study includes inputs from the Business Processing Association of the Philippines.

The $6.8-million Philippines offshore market employs more than 450,000 people, most of them in voice-based services.

"Success in voice-based BPO services has positioned the Philippines as the second largest low-cost BPO destination after India, and both countries combined account for 50% of the BPO market in revenue terms," the statement quoted Everest Research Institute Principal Nikhil Rajpal as saying.

"While some providers are leveraging the Philippines for non-voice functions, the scale of work is relatively low. However, tremendous market potential exists if service providers can successfully manage talent-related constraints."

Other study insights include:

* Most current non-voice BPO operations are focused on transactional services like finance and accounting, as well as medical transcription.
* Judgment-intensive services like research, analytics and legal services are being performed, although still at a small scale.
* Multinationals have expanded their service portfolios in the Philippines to include multiple non-voice BPO services in addition to voice-based BPO services, although the scale of operations in non-voice is low.
* The government is focused on development of the non-voice BPO industry, providing incentives to attract investors and developing relevant infrastructure.

"Managing talent-related constraints — especially the availability of specialized and managerial skills — will determine operational success in the Philippines," Everest research director Jimit Arora said in the same statement. "We expect strong growth to continue in the non-voice services sector, especially in the transactional services space."

"However, these constraints suggest the Philippines is not likely to replace India as the nerve center for the sourcing and management of services for many organizations," Mr. Arora clarified.

Everest Research Institute is the research arm of global consultancy firm Everest Group.

1 comment:

  1. The Philippines has time and time again proved its knowledge and capability able to adopt and learn...this is a great articles