Wednesday, 9 February 2011

BPO revenues seen surging to $25B [by 2016]

Competition from neighbors expected to rise
By Paolo Montecillo
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20110208-319192/BPO-revenues-seen-surging-to-25B

MANILA, Philippines—Business process outsourcing (BPO) companies operating in the Philippines will have to innovate and start offering higher-value services to clients if the country is to be able to maximize the industry’s potential for growth in the next five years.

Maulik Parekh, president and CEO of SPi Global, said that despite the impressive performance of the offshoring and outsourcing industry in the Philippines, “BPO companies should not be complacent.”

SPi Global is the biggest Filipino-owned BPO company employing 11,000 people in the country.

Speaking to industry executives at the recent Asia CEO Forum, Parekh said companies should be able to create value for their clients, nurture their leaders to their full potential and take advantage of the opportunity to employ many good employees because BPO is a people-intensive business.

“The Philippine offshore market size is expected to triple by 2016 with revenues growing from $9 billion to $25 billion. Globally, the revenues in the BPO sector may reach $124 billion in 2016, up from the $45 billion recorded in 2010,” Parekh said.

But with competition growing, especially from neighbors in the region such as Malaysia and Vietnam, companies must be able to differentiate themselves and be able to offer services with increasing value for their clients.

“One of the trends that we should all watch out for is the shift in the level of business that’s generated from voice to nonvoice. In 2016, the nonvoice sector is expected to grow to 58 percent from 2010’s 43 percent. Nonvoice is the future,” Parekh said.

For its part, Parekh said SPi was poised for the “next generation” in BPO.

Maulik said one of the firm’s recent major initiatives was the establishment of a so-called SPi Healthcare Academy, which aims to train workers to fill a gap in the industry that has yet to be fully tapped.

“Knowing the huge potential of healthcare information management in the major markets and aware that the Philippines can play a key role in the sector, the academy aims to develop the required talent that can prepare Filipinos in the healthcare industry for high-value work,” Parekh said.

He said other companies need to consider similar initiatives that would help the industry grow to the benefit of all firms that would compete against one another.

“I really believe that if a company creates a more people-centric culture and create an environment that is sticky to the people, we won’t have to worry about trying to bring in 100,000 people incrementally into the system every year,” he said.

SPi is a unit of Philippine Long Distance Telephone Co. (PLDT) through wholly owned unit ePLDT Inc.

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