Business Process Outsourcing in the Philippines Then and Now

Business Process Outsourcing, Knowledge Process Outsourcing, Outsourcing Blog1 Comment

outsourcing industry in the Philippines
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Business process outsourcing (BPO) is the means of farming out business tasks to a third party service provider. More than just a well-paid trade, the outsourcing industry proves to be the country’s largest and fastest growing field, too. Read on and find out how BPO boomed in the country and how the trends have changed as times passed.

Philippines’ Business Process Outsourcing Industry Then and Now

1992
– BPO began here in the country when Frank Holz of the Accenture group, formed the first contact center in the Philippines (PHL).

1995
– To draw more foreign sponsors, the Congress passed the Special Economic Zone Act that lowered the area requirements for growth and gave tax incentives.

1997
– SYKES forged the call center trade with just 17 people and became the first global BPO firm in the country.

1999
– Jim Franke and Derek Holley founded eTelecare, known as the first call center in the PHL.

2000
– The BPO sector added 0.075% to the country’s gross domestic product (GDP).

2001
– The US-based outsourcing center, PeopleSupport, reformed its business and moved to the Philippines, opening 8,400 jobs.

2003
– The head of Convergys Corp., Jack Freker, chose PHL and India and opened two call centers as part of the firm’s global growth and income generation plan.

2005
– PHL gained 3% of the global BPO market that explained the 2.4% growth in our GDP.

2006
– ePLDT Ventus was at the forefront of the BPO landscape that boosted the country’s economy by 5.4% and gave 11,000 jobs across North America, Europe, and Asia.

2010
– PHL became the world’s business process outsourcing industry’s hub with 525,000 people in call centers and $8.9 billion earned income.

– The country remained an appealing place to foreign firms. Thus, experts expected the profits to shoot up with a five-year compound annual growth rate (CAGR) of 38%.

2011
– BPO became one of the biggest and fastest growing job providers in the private sector with $11 billion in earnings (4.9% of PHL’s GDP) and 638,000 employed Pinoys.

2012
– Profits comprised 5.4% of the country’s total GDP.
– BPO grew by 46% per year since 2006.

2013
– Earned income climbed up to $15.5 billion and the number of full-time workers reached 900,000.

2016
– The outsourcing industry will most likely create 1.3 million new jobs, with 17% growth each year.

Current Outsourcing Industry Trends and Practices

1. Clients choose work quality over low cost.
While cost remains to be a key factor for most clients, vendors will get more points for their results-oriented approach. In the same way, clients will ask for better value, faster response, shorter delivery cycles, and more tailored services.

2. Knowledge process outsourcing or KPO grows and becomes more relevant.
By 2019, analysts expect that the KPO market will have a CAGR of 23% on a global scale. By this time, more firms will count on vendors that can help them scale their firms and tap into new markets; hence, the need for high-skill services and pros grows.

3. Firms won’t move to the cloud fast enough.
To vie in this field, firms must learn to adopt and adapt to new tools. Cloud, for example, can change the outsourcing market in more ways than we can imagine. Despite the gains, outsourcing firms are reluctant to move due to concerns on safety and privacy.

With these advances and updates in the BPO sector in the country, Filweb Asia, Inc. offers a range of services to clients around the world. Our firm is a global hub of KPO and BPO solutions. For more fine points on the outsourcing industry in the country, browse our blogs page.

Sources:
www.searchcio.techtarget.com
www.axiemoffshoreoutsourcingsolutions.com
www.rappler.com
www.sprout.ph
Image courtesy of Tuomas_Lehtinen at FreeDigitalPhotos.net

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One Comment on “Business Process Outsourcing in the Philippines Then and Now”

  1. Patricio

    BPO companies rise in the Philippines is not duly because of the low cost compare to neighboring countries but also due to the kind of services delivered by Filipinos. A quality work is preferable than a low cost service.

    Patricio @ http://www.infinit-o.com/

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