Manila is pushing the country’s educated, English-speaking, culturally aligned workforce to make it a business process outsourcing destination for North American firms
MANILA — It’s not all about voice. That’s the one message the Philippine government and the local IT industry in this Asian country wants foreign companies to here load and clear.
After more than a decade of carving out a niche for itself as a premier contact centre destination, the Philippines is now highlighting the more value-added business process outsourcing (BPO) capabilities of its homegrown tech talent pool.
“From scratch with only 2,000 workers and US$24 million in revenues in 2000, the Philippine BPO has grown into a global powerhouse,” President Gloria Macapagal-Arroyo proudly announced as she officially opened the 10th e-Services Global Sourcing Conference and exhibition at the seaside SMX Convention Centre in Pasay City on Monday.
At a time when Canadian and U.S. firms are shedding thousand of IT professionals, the Philippine’s BPO sector provided livelihood for at least 600,000 people in 2009, she said. “From revenues of more than $7 billion last year, the industry is expected to exceed $9 billion by the end of 2010,” Arroyo said in her speech.
The conference is held by the Department of Trade and Industry (DTI) through its Centre for International Trade Exposition and Missions (CITEM) promotions arm.
Other government officials point out that while contact centres still account for the bulk of the amount, more and more foreign customers are outsourcing their more complex IT processes to the Philippines.
“We hope to see BPO to become as popular as nursing was when everybody wanted to become a nurse,” Gillian Joyce Virata, executive director for information and research for the Business Processing Association of the Philippines (BPAP), told ITWorldCanada.com.
Overseas foreign workers (OFWs) — from skilled labourers and engineers in Saudi Arabia to nurses and nannies in Canada — remitted $18 to $20 billion to the Philippines in 2009. The Philippines is the largest exporter f health-care workers. Every year it sends out at least 8,000 nurses and 14,000 caregivers. This exported labour market has been a consistent top dollar earner for the country since the days when the Philippines was ruled by president Ferdinand Marcos. Since the strongman’s overthrow, the BPO sector had slowly crept to the position of No. 2 dollar earner.
Virata said that during the recession, the BPO industry managed to maintain a 20 per cent growth in export revenues.
The top three IT services in the country are contact centres, which accounted for at least $5 billion in revenue last year; non-voice IT services, also collectively called knowledge process outsourcing (KPO), which fetched at least $1.18 billion for the same period; and IT maintenance services, which made $500 million.
A new breed of highly talented and flexible IT professionals is behind the BPO boom, says Torontonian James Dantow, vice-president and worldwide support and general manager for the Manila operations of online integrated business applications software and services firm NetSuite One World. The U.S.-based company also has a branch in Mississauga, Ont.
“When NetSuite began looking for an Asian location, I pushed for the Philippines because I knew the high calibre of the local IT talent pool,” said Dantow. His Manila-based team, through NetSuite’s shared IT services network, has served the tech support needs of U.S. and Canadian companies including the Toronto Star newspaper.
He said the top differentiating qualities of Filipino IT professionals were their high level of technology and non-tech education, their proficiency in the English language compared to that of other countries in the region
, and their affinity to North American culture and work practices.
“Low labour cost is not enough reason for foreign businesses to invest offshore. Outsourcing must bring the best value for the money as well,” said Dantow, who heads a team of more than 300 Filipino IT workers.
For instance, he said, the bulk of NetSuite’s Manila IT financial support team are certified public accountants.
Among NetSuite’s latest Philippine success stories is its systems integration work for Jollibee Food Corp., a popular food chain which is the country’s answer to McDonald’s. The Philippine hamburger and fried chicken restaurant now operates more than 1,800 stores in Asia and North America.
Jollibee sought NetSuite’s help in integrating its existing Oracle system and mix of legacy and small business applications to accommodate its rapid expansion.
Many of the country’s BPO firms are satellites of foreign based IT services firms. Some Philippines conglomerates that held sway in traditional industries such as manufacturing and real estate since the last century have also started to branch out into BPO, said Virata.
But some of the more vibrant IT services firms are startups. Such is the case with Transprocure, a global procurement solutions and services firm headquartered in the country’s business centre in Makati City.
“Eventually it is the demand for more complex IT services which will push the BPO industry,” noted Charlie Villasenor, president and CEO of the company.
His firm specializes in providing electronic procurement implementation and services. Villasenor claims many foreign companies can easily cut 10 to 30 per cent of their cost by resorting to electronic procurement solutions that automate product selections and purchase procedures.
Among Transprocure’s customers are Motorola and JP Morgan. The company also intends to expand into the oil and gas industry in Canada.
He characterized the call centre industry as a low-cost but low-skilled sector. “Pretty soon the Philippine’s language advantage will be swept aside by our neighbours like China, who are investing heavily in educating their workforce,” he said.
Villasenor said it’s high time the country take the competition a notch further by preparing IT professionals for more complex IT services. Related Download Sponsor: IBM Canada Ltd B2B cloud integration: A strategic approach to optimizing your value chain This IBM whitepaper presents an overview of the B2B integration landscape: its challenges, opportunities, and the approaches that leading organizations follow in developing a robust and scalable EDI solution. Register Now