Business Process Outsourcing (BPO) in the Philippines

Introduction

The business process outsourcing industry is internationally recognized as one of the fastest growing industries in the world. The demand for outsourcing services is expected to reach a whooping $200 billion in 2010. Customer contact services, finance and accounting, and human resource sub-sectors have the biggest share in the BPO market. It was also forecasted by experts that the BPO trend of cost-effectiveness will inevitably shift to skills quality and competence as the demand, supply and competition continues to grow. This gradual shifting boosts further the Philippine’s drive to becoming a huge leader in the BPO industry.

Philippine BPO

The demand for offshore call centers continues its form hold as the leader in the BPO boom in the Philippines. The Philippines put itself on the spotlight of the BPO map in 2006 when it generated business process service revenues of $2.1 billion, ranking third behind India and China. The Philippine BPO industry reaped a $0.8 billion or an outstanding 62% from its 2004 revenues of $1.3 billion and now has an estimated 200, 000 employees working in an estimated 120 BPO companies in the country. BPO Philippines is expected to earn $11 billion and employ 900, 000 workers by the year 2010.

Legal services, Web design, medical transcription, software development, animation, shared services and other higher-end outsourcing services and not the traditional low-value call centers are what sparked the gigantic growth spurt in the Philippine outsourcing industry. Call centers however, still compose the largest part of the BPO sector. The Philippines has started taking measures to leverage its creative design talent pool, its hefty pool of lawyers, and its professionals in accounting and finance with hopes of dominating the other sectors of BPO.

Fiscal and non-fiscal incentives aimed at enticing foreign direct investments in the offshore servicing industry have been the Philippine government’s primary means of sustaining this rapid climb towards being the king of world BPO.

Metro Manila, Cebu City, and Bacolod City house the majority of BPO facilities in the Philippines, although other regional areas like Baguio City, Cagayan de Oro, Clark (Angeles City), Dagupan City, Davao City, Dumaguete City, Lipa City, Iloilo City and Legazpi City are now highly promoted and fast growing sites for offshore operations. The Philippines has been a permanent top 10 choice for offshore operations since 2006.

Call Center Industry in the Philippines

Contact centers or call centers in the Philippines started out s simple providers of email response and managing services. These call centers possessed industrial capabilities for almost every kind of customer relations service, ranging from travel services, technical support, education, customer care, financial services, and online business to customer support, online business to business support.

Second to skills and competence, primarily the ability to fluently speak English – the primary medium of instruction in all educational levels, the Philippines is often being chosen as BPO provider because of its less costly operational and labor costs. In 2007, The Philippines continues to be a top BPO location for the estimated $150-billion business process outsourcing industry.

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Legal and medical transcription

Legal and medical transcriptions outsource providers generally provide medical reports, discharge summaries, operative reports, therapy/rehabilitation notes, chart notes, and hospital and clinic reports using state-of-the-art software and equipment from the U.S. These BPO servicers can execute per day at a 98% accuracy rate up to 1, 000 lines of transcriptions. Also, it has been a practice to carry out regular training programs to have transcriptionist continuously develop and enhance their skills. Most can generate output in three to six hours for emergency or rushed cases, while normal cases have a general turnover of 24 hours. And Philippine transcription providers normally have 24/7 business hours.

The Philippines has also ruled into law the certification process for all individual companies’ services in legal and medical transcriptions to improve quality and further promote the country’s prowess in this area of BPO. The government and industrial sector has also forged an alliance to mutually sustain the rapid growth of the sector. The addition of medical transcription subjects in medical courses has been the biggest step, with the aim of expanding the nation’s pool of skilled and qualified medical transcription experts.

Finance, Logistics and Accounting

Excessive demands for Philippine financial services such as accounting and bookkeeping, account maintenance, accounts receivable collection, accounts payable administration, payroll processing, asset management, financial analysis and auditing, management consulting, inventory control and purchasing, expense and revenue reporting, financial reporting, tax reporting, and other finance-related services such as financial leasing, credit card administration, factoring and stock brokering; as well as for logistics management, and cargo shipment management have bolstered the country to fast becoming not only a regional but a global hub for shared corporate backroom operations.

The Philippines’ rich pool of low-cost yet English- and IT-proficient business, accounting, HRM and engineering graduates has been the main reason why many companies trust the country with their shared corporate backroom operations. The Philippines is even ranked 16th out of 49 countries in terms of international business experience. Filipino finance, logistics and accounting professionals are also highly regarded for their marked customer service orientation, superior work ethic, and high degree of trainability, flexibility, multicultural adaptability, and loyalty.

Software Development and Animation

The Philippines ranks first in the world in terms of availability of knowledge-based workers. The country also ranks fourth in Asia when it comes to labor quality. The country also excels in the quality of its managers and information technology staff and engineers besides its huge pool of productive, trainable and multi-skilled labor force. The high level of English proficiency, with the country being the third largest English-speaking country in the world, is the reason behind the country’s unique competitive advantage in the realm of animation and software development.

The fast growing global market for animation due to the increasing popularity of animation as a form of entertainment when it comes to television and computer games coupled with the increased use of animation in advertising, internet and education has paved the way for the steady rise of Filipino animators.

Filipino animators can deliver the whole animation package, ranging from full 2D and 3D animation, including pre- and post-production services such as lay-outing, in-betweening, clean-up, digital background production through scanning and pre-compositing, color styling, special effects creation, and digital ink and paint application, to flash animation and web design, graphic and art design, mobile applications, and art and animation training.

In recognition of the Filipino talent in animation, major animation studios like Disney, Marvel, Warner Brothers and Hanna Barbera have established big offices in the Philippines. Pixar's Finding Nemo, Paramount Picture's Barnyard and Twentieth Century-Fox's Anastasia are just a few of the latest works of Filipino animators that hit it big in Hollywood.

The Philippines has also become second only to India as the preference of various countries abroad in the software and web development industry. Many companies in highly developed and rich countries come to the Philippines to take advantage of the low cost yet high quality software and web development offered by the country.