Tuesday, June 7, 2011

The future of the call center industry in the Philippines

SPI - Iloilo: One of the Oldest Contact Center in Iloilo
The call center industry in the Philippines has been developing rapidly since 2000. Call center professionals amounting to only a few hundred were already being employed in several contact centers in the country in 2000. Some of the established BPO firms then included Accenture, SYKES, eTelecare and PeopleSupport. (PeopleSupport had moved all of its operations in Los Angeles to the Philippines in 2000 and 2001.) The total revenues from the BPO and call center Philippines industries reached up to $24 million at the end of the said year. During the succeeding years, the call center Philippines industry’s revenue had grown along with the number of call center professionals working in different business process outsourcing (BPO) companies.

According to reports, the call center Philippines industry has been growing at a rate of 100% annually since 2001 in terms of employment and revenues. Offshore outsourcing services offered by Philippine call centers were ranked as number one in the Asian region in 2003. The number of call center Philippines professionals rose to 112,000 in 2005 while the total revenues of the industry correspondingly increased. Total revenues amounted to $1 billion in 2005. Currently, the entire BPO and call center Philippines industry holds between 7 to 8% of the global outsourcing market. In 2009 alone, the BPO, KPO, call center and ICT sectors contributed to the entire industry’s total revenues of $7.3 billion.

Many professionals have begun to realize the advantages of working in the call center Philippines industry. Most BPO firms are paying above the country’s standard wages and there is enough room for growth in call center Philippines companies. Some call center Philippines employees even perceive working in call centers as a valuable experience as they learn new and different skills which they can use later on if they choose to change career paths. Foreign investors and clients alike have also seen the advantages of outsourcing in the Philippines. The country has a large talent pool that is highly skilled and speaks English fluently. Filipinos are also known to be adaptable and have a close cultural affinity to the American culture which gives them an edge over other countries in the field of business process outsourcing.

Offshore outsourcing has made it possible for a lot of small- and medium-sized companies as well as large corporations worldwide to survive the global financial crisis in 2009. Many foreign firms chose to move many of its back-office operations – including customer support and technical support – to offshore sites that offer certain services. The Philippine call center industry felt the financial crisis both ways. Some client companies pulled out accounts in outsourcing companies, resulting to a significant number of call center agents loosing their jobs. Other foreign firms chose to outsource many back-office services in offshore locations such as the Philippines, leaving only their core services in their main offices. As a result, the call center industry in the Philippines employed many professionals to fulfill vacancies in many of the Philippine BPO firms.

Philippine economists, businessmen, analysts and the Philippine government realize that the BPO industry of the country still has aspects that can be improved on to make the Philippines the best BPO destination worldwide. The call center Philippines along with other sectors is targeting to get a bigger chunk of the global outsourcing market in the following years. Analysts realize that fierce competitors like India, China, Brazil and South African countries can either stimulate or get in the way of the Philippine call center industry’s growth. India plans to take 71% of the global outsourcing market in 2010, while China and several South African countries have emerging BPO industries.

Many business associations like BPAP and the Philippine government realize that several steps must be taken to ensure that the country’s call center, BPO and KPO sectors take 10% of the global outsourcing market. The industry is also targeting to outdo its 20% revenue growth in 2009 and up its growth to 26% in 2010. Over the last few years, many locations outside of Metro Manila’s business districts that cater to BPO firms have been established. Major cities such as Baguio City, Cebu City, Davao City, Laguna and Angeles City house offshore outsourcing companies. Advances in technology – specifically Internet technology – have allowed other cities to become BPO destinations. As these locations house more call centers, next wave cities like Iloilo City are being developed to provide more room for new BPO companies and businesses.

Aside from developing next wave cities in locations outside of Metro Manila, businesses and government alike should focus on sustaining and strengthening the current business environment. Presently, legislation in the country offers non-fiscal and fiscal incentives to IT service exporters, export producers and developers of economic zones. This particular legislation can fuel the steadily growing BPO sector by attracting more foreign investors and multinational firms. The call center Philippines sector as well as the KPO, ICT, game development and animation sectors will find it favorable if more and more investments enter the country and stimulate the growth of the Philippine economy.



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