Bayan Telecommunications have announced that they plan to fully support the offshoring & outsourcing industry in the Philippines and explore business opportunities in its list of Next Wave Cities.
The Philippines is expected to own 10 percent of the global offshoring & outsourcing market share by 2010. The country will need an estimated 1 million new employees in the industry in order to meet the goal.
Bayan said it seeks to help achieve that goal by supporting outsourcing companies in alternate locations outside Manila. Bayan was in attendance in Iloilo for Covergence 2009 – a project of the Commission on Information and Communications Technology (CICT).
“In line with our thrust of bringing out the best in the lives of Filipinos, Bayan hopes to have highlighted the regional capabilities of the country to attract investors and locators for various outsourcing and offshoring services as part of the Philippine cyberservices corridor,” Bayan Managing Director, Fred Bernardo stated.
The Philippines' Next Wave Cities in the outsourcing sector are Iloilo, Metro Laguna, Metro Cavite, Davao, Bacolod, Pampanga Central, Bulacan Central, Cagayan de Oro, Bulacan South and Lipa.
Commission on Information and Communications Technology (CICT) Secretary Ray Anthony Roxas-Chua III said the people of Iloilo City must work harder in order to attract more IT-BPO investments and provide more job opportunities. The city is considered one of the top new wave cities in the Philippines.
"Iloilo is number three, but you can do much to further improve," Secretary Chua said at the opening of the Convergence 2009 in the city. He added that the presence of many business outsourcing companies in the country is concrete evidence of the accolades given to the Philippines. The most recent award is the Best Offshoring Destination of the Year title given by UK's National Outsourcing Association (NOA).
At present, the Philippines ranks second, next to India, in the list of key outsourcing destinations in the world. Based on the CICT report, the BPO industry in the country employed about 400,000 workers in 2008, and reported US$6.1 billion in export revenues.
The Call Center Agents of the Philippines (ACCAP) was officially launched at a press briefing last Tuesday, November 24. The group is reportedly non-profit and will work to unite the increasingly large community of call center and Business Process Outsourcing (BPO) workers in the Philippines.
According to ACCAP secretary general, Kevin Carreon, workers in the Philippines' outsourcing industry have grown to close to 800,000.
“Over the past 10 years, the country has become a significant outsourcing destination and extremely competitive due to the highly trained English-speaking Filipino agents. This is the reason more and more US and UK companies prefer the Philippines to outsource jobs,” said Carreon.
The ACCAP also launched its own website designed to connect call center and other outsourcing workers throughout the nation, and to help them find new jobs and skills development opportunities.
Outsourcing services which are considered high-end and analytic-intensive will be highlighted in the 10th e-Services Global Sourcing Conference & Exhibition. This will be held on February 8-9, 2010 at the SMX Convention Center, Mall of Asia Complex, Metro Manila.
"In light of the global economic downturn, emerging trends reflect a movement up the value curve [away from voice-based services] towards what is called knowledge process outsourcing (KPO) with functions involving greater business complexity," the Center for International Trade Expositions (CITEM) said. These outsourcing services refer to tasks from the fields of medicine, engineering, and finance. CITEM added that cloud computing technology will also be discussed in the event.
The upcoming e-Services event aims to promote the Philippines as the ideal outsourcing destination. About 200 local and foreign IT service providers and 2,000 buyers are expected to take part in the event.
A recent survey conducted by Forrester Research indicates that outsourcers in Continental Europe feel the outsourcing model utilized by Indian IT service providers is “not working”. The survey was conducted during the last quarter and the first month of this quarter. A large portion of the firms surveyed indicated that they sourced hardware, software and people from different locations. 60% of the firms, however, said they still outsource to companies in India. Principal Analyst at Forrester Research, Sudin Apte, commented on their findings:
“Although Europe offers a lucrative opportunity, the success rate for Indian companies has been low and ramp-up of operations has been slow.”
The majority of the outsourcing firms surveyed said they did not expect IT budgets to be any cheaper in the UK, France, and Germany – with “even fewer” considering India as an offshoring option.
The study by Forrester research cites a “highly federated decision-making process”, complex procurement processes, and language barriers as the major challenges outsourcing service providers face in Europe.
“Most companies in Europe are more pan-European than global,” said Apte. “Many Indian IT companies confuse cultural compatibility with local presence.”
Consulting firm Watson Wyatt Worldwide said there is a need for Filipinos working in the business process outsourcing industry to take graduate studies since other countries might surpass the position of the Philippines in the world of BPO.
“The Philippines has an excellent supply of graduates of college degrees, but it does not have an excellent supply with professional degrees, or those with master’s degree,” said J. Michael Orszag, head of research at Watson.
While the country produces a lot of graduates every year, he said the BPO sector needs more in the future, and workers must have management skills. It is also necessary to urge workers to aspire for managerial positions.
Orszag added that the country must focus not only on how to stay afloat amidst the current economic downturn but also on long-term solutions such as addressing the problems on education and infrastructure.
Lighthouse Holdings B.V. Recently began outsourcing operations in Cebu. The new facilities, located at the Mactan Export Zone (MEZ-2), is the second outsourcing facility for Lighthouse Holdings after opening a center in China. The Netherlands-based company has reportedly invested upwards of 250,000 Euro since being established in Cebu, with the company stating they expect to invest over a million Euro in a year.
The new facility will be focusing on software development as part of the company's pursuit of corporate Intellectual Property services. CEO Geert Lagemaat claimed that the Philippines was chosen as an outsourcing destination for the availability of quality software developers and impressive government support:
“We’re here because we need a qualified team. So far we have found very good people. Culturally, it’s much easier to operate here [compared to people in China].”
Cebu's software outsourcing sector has averaged revenues of $60 million a year - a number that is expected to double this year.