MANILA, Philippines—Over 100 countries around the world are now seeking to challenge the Philippines’ dominance in the business process outsourcing (BPO) sector, especially in more high-value, non-voice services, industry stakeholders warn.

Many of the players that are moving in to steal market share away from the Philippines are in the country’s own backyard, such as Malaysia, Singapore and China, according to the Business Processing Association of the Philippines (BPAP).

“There are over 100 locations around the world where IT [information technology] BPO services are being offered,” BPAP head of research and industry veteran Gigi Virata said in a recent press conference.

“While we have our lead in voice services, we have to be more competitive in higher-value services,” she said.

The Philippines now ranks as the top call center service provider in the world, surpassing erstwhile leader India in terms of revenues and head count. Industry officials, however, have emphasized the need for BPO firms to diversify into more complex services if the sector is to sustain its rapid growth.

These include many back-office functions such as accounting tasks and the management of human resource systems that many corporations, in a bid to cut costs, have started to subcontract to companies in countries like the Philippines.

Proficiency in the English, which has been the Philippines’ main advantage over competitors, is not a key factor to success in non-voice services.

“It’s a very competitive world out there,” Virata said. “We encourage companies to be more efficient. They have to be more productive and they can’t just keep cutting costs by reducing salaries.”

“What you have to do is improve systems to identify redundancies, and come up with innovative ideas for better customer service,” she said.

The emphasis on improving quality, she said, has become a key priority for stakeholders to a point that in the upcoming annual ICT [Information and Communications Technology] Awards, a new category, “Quality Program of the Year,” was recently added.

She said eliminating redundancies would reduce the need to keep salaries low, allowing companies to retain the best talent while keeping costs competitive.

Virata said companies should also vie for certification by international organizations that have been recognizing corporate best practices. These include the International Organization for Standardization, or ISO.

“These are the sort of things that clients from places like the European Union demand from suppliers more than our traditional American clients might,” she said. “If we want to break in to new markets, we need to do this.”

There are currently 800 BPO companies employing over 630,000 people in the country today. Last year, the industry contributed over $11 billion in revenues to the domestic economy, up by over 20 percent year on year. This makes the BPO industry the country’s second-largest source of foreign exchange next to remittances from migrant workers.


Source:   http://business.inquirer.net/48155/philippines-now-competing-with-over-100-countries-for-bpo-investments

MANILA, Philippines — Last week, Business Processing Association of the Philippines (BPAP) president and CEO Benedict Hernandez announced that the IT-BPO industry grew 24% to US$11 billion in revenues in 2011, maintaining its eight percent share of the global market despite the emergence of more than 100 competing centers worldwide in recent years. Perhaps reflecting a gradual shift to non-voice, complex services, employment grew slightly slower at 22%.

Some 640,000 Filipinos were employed in the industry at the end of 2011.

Acknowledging the contribution of the industry to the Philippine economy and job creation while seeking to sustain and extend that contribution, Philippine President Benigno S. Aquino III and his Information and Communications Technology Office deputy executive director Alejandro Melchor in recent months and weeks have announced a series of government grants to the industry. These funds are administered by BPAP.

Some P800 million in grants will go to remedial training (P450 million), strategic training and educational initiatives, brand visibility marketing to prospective employees and the individuals who influence them, and brand visibility internationally to increase awareness and recall of the Philippines for a variety of IT-BPO services (P350 million in 2012). Mr. Melchor says the government will provide P500 per annum in funding to support the industry from next year.

Quarterly surveys conducted by the BPAP and Outsource2Philippines reveal more than 20 outsourcing segments being served by the Philippine IT-BPO industry. For reporting purposes, BPAP aggregates these sectors into seven categories: Voice BPO, Non-voice BPO/KPO, ITO, Health Information Management and Care, Engineering, Animation, and Game Development.

Revenue for each of these segments grew fairly to very significantly last year, save one. That was Animation, which has struggled somewhat in recent years as a result of unrelenting competition, the introduction of new technologies, and shift in demand. Still, the industry employs almost 9,000 Filipinos and generated $128 million in revenue last year, a fall of 10% from 2010.

On the other hand ITO — which encompasses a wide range of IT services — grew a whopping 37% to almost $1 billion in revenue and almost 50,000 employees. Growth in ITO is particularly notable because the Philippines’ competitors for these services — particularly India — has worked diligently to cast the Philippines as a capable voice services provider that lacks the maturity to provide ITO services.

These results show that while India may have been somewhat successful in perpetuating the myth of the Philippines as a solid voice services provider, the reality is that an increasing number of firms leveraging ITO are turning to the Philippines. Anecdotal evidence suggests that trend is continuing to accelerate and that voice services providers are expanding into this segment as a result of growing demand.

Of course, the industry continues to be dominated by voice services, which posted revenues of $7.4 billion last year, a 21 percent increase. The sector employed close to 420,000 Filipinos. Although this segment is very large, it’s worth noting that it continues to grow as if it were in the early stages of development. Voice has been expanding for more than a decade, overtaking India in both revenues and employment in 2010.

The biggest growth last year was seen in health information management and care. According to BPAP, that sector grew 172% to $277 million in revenue and almost 25,000 full-time employees (FTE). BPAP senior executive director Gillian Virata cautions, however, that the increase is in part due to the decision to reclassify some non-voice BPO/KPO services to the health segment. But by any measure, 2011 was a breakout year for the health segment.

Non-voice also posted impressive numbers, growing 24% to more than P2 billion in revenues and almost 130,000 employees. Services in this segment also vary dramatically, from finance and accounting processes to financial risk analysis. Like ITO, competitors and some analysts have questioned the Philippines’ capability to provide these services. Last year’s impressive growth seems to show that there is little, if any, reason to do so.

Engineering services grew a modest five percent to $172 million in 2011, and employed over 9,000 Filipinos. What is notable about this industry is its shift from providing relatively low-value engineering drawings to high-value project conceptualization and management. Although this sector shuns visibility anecdotal evidence once again tells me that Filipino engineers are creating and managing very large engineering projects all over the world. From here.

Finally, game development grew a respectable 13% last year to $8 million in revenues and 1,400 FTEs. The sector is highly competitive, but the Philippine industry is making some significant contributions. WORDTROTTER — whose creators call, “The World’s Coolest Word Game,” claims to be the first Filipino video game on Facebook. More accurately, it was the first Filipino-owned game on Facebook. Filipino developers create dozens of Facebook games annually for clients.

IT-BPO isn’t the Philippines’ only economic leg, as some economists have said recently, and indeed it shouldn’t be. But it’s a healthy leg. One for other industries to emulate.


Source:  http://www.mb.com.ph/articles/353499/public-and-private-sectors-up-the-local-itbpo-ante

12:18 am | Friday, March 2nd, 2012 Deficiencies in higher education in the Philippines have kept it, along with other neighboring countries, from growing faster and becoming more competitive, according to the World Bank.

In a study, the multilateral agency said that there remains a significant gap between the labor requirements of companies and the quality of graduates produced by local colleges and universities.

This gap, which has long been observed, must be addressed to maximize the potential of higher education in  boosting the economy, said Emanuela di Gropello, World Bank lead economist and one of the authors of the study titled “Putting Higher Education to Work: Skills and Research for Growth in East Asia.”

The study points to the need for research that will help bridge the gap between what employers need and what higher education institutions produce.

This gap is most apparent in the services, export, and technology-intensive sectors, the study said.

“Employers in both manufacturing and services in East Asia and the Pacific, including the Philippines, are looking for problem-solving, communications, management and other skills that will support higher productivity,” Di Gropello said.

Also, inequality in terms of access to higher education is another problem that must be addressed. Although the proportion of the population going to colleges and universities has grown over the years, growth is concentrated on people belonging to higher-income households, the World Bank economist said.

Di Gropello said measures to address the inequality should include the grant of state scholarships and student loans.

The study recommended adequate financing with help from the private sector, improvement of management of higher education institutions, and the enhancement of government systems that facilitate the link among higher education institutions, employers, research institutions and training providers.

Di Gropello said increasing the public budget for higher education would not address the problems in higher education. In fact, she said, the correlation between the amount spent on higher education and its effectiveness is not strong.

Also, the problems confronting higher education are not peculiar to the Philippines, she said. The problem is being experienced elsewhere in Asia, such as Cambodia, Vietnam, Indonesia, Thailand and Malaysia.

Soource:  http://business.inquirer.net/47155/wb-poor-education-holds-back-philippines

By Jamie Yap , ZDNet Asia on February 28, 2012 SINGAPORE--Amid the overall "cautious optimism" worldwide in terms of hiring sentiment this year due to global economic uncertainties, the Asia-Pacific IT sector sees positive hiring forecasts which contrast to the flat or lowered projections from other segments such as banking, finance and engineering in the region.

According to global recruitment consultancy Robert Walters, while recruitment activities will still continue, organizations in Singapore will exercise prudence and caution especially in the first half of 2012 when hiring the right talent to add value to the company.

Andrea Ross, managing director of Robert Walters Singapore, Malaysia and Vietnam, presented the Singapore findings from its latest global salary survey at a media briefing here Tuesday. The survey was conducted in the fourth quarter of last year.

For Singapore, IT hiring levels were expected to remain stable as the country undergoes further growth, the report said. Last year, recruitment was particularly buoyant among technology vendors, as well as IT consulting and telecommunications businesses.

IT hiring in banking and finance services and commerce industries such as pharmaceutical, energy, oil and gas, and electronics was moderate, riding on the back of "over-recruitment" from 2010, it added.

Still, Ross noted that the shadow of global economic uncertainties will undoubtedly impact headcount decisions among organizations here, which saw strong employment growth last year with consistent hiring across all industries. Such market sentiment also contributed to disparity between candidates' expected pay rises and actual increments offered by companies which fell below expectations.

Healthy appetite for IT hiring continues 
Despite the conservative hiring sentiments on the whole, the outlook for IT jobs in Asia remained positive this year compared to rest of the world, the report said.

According to Pri Sandhu, manager of IT commerce division at Robert Walters Singapore, while companies "won't go crazy" with hiring IT staff, IT departments will definitely hire more manpower to prevent the budget from being reallocated to another department within the company.

Given the current market volatility, companies increasingly want to use or upgrade their existing IT resources to make their businesses more profitable, or run it in a cost-effective and lean way, Sandhu told ZDNet Asia on event sidelines. Hence, mission-critical IT projects or projects that were put on hold in previous years would now get budget sign-offs.

Also, companies were now investing more resources into building their online presence, as Web sites were increasingly "the first touch" for potential customers, he added.

Companies want their Web sites to be a transaction tool, and not just a commercial tool, whereby, customers are enticed to make purchases or orders through the Web site instead of simply browsing, he explained.

Such efforts to cut or stretch business costs translate into demand for IT professionals, particularly those with knowledge of data centers and infrastructure, software, cloud computing, and Web development, Sandhu noted.

IT security professionals will also be sought to ensure robust digital defenses, audits and regulatory compliance of IT systems, given the several incidences of security breaches andmalware on organizations around the world, he added.

Talent crunch remains 
But while the hiring outlook was fairly optimistic in Asia, there remains a shortage of skilled talentin the region, Sandhu said.

"The roles that are coming up, such as cloud and security, it's not generic anymore; they are very niche," he noted. "But, there aren't many [professionals] with this background or many who have upgraded their skills. Hence, there always is a gap and supply cannot match even a lowered demand."

The executive added that with such niche skillsets required, only those who fit the bill can command a premium. But due to economic anxieties, companies will likely offer prospective candidates lower increments.

Nonetheless, IT candidates today are "more commercially-savvy" and willing to settle for smaller pay rises because they also assess the "soft side" of job benefits, he said.

According to Sandhu, IT professionals no longer have the "backroom" mentality and are asking organizations more questions about training and overseas programs, or mobile working arrangements for work-life balance.


Source:  http://www.zdnetasia.com/apac-it-hiring-outlook-stays-positive-62304028.htm