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Outsourcing News for April 2011 | MicroSourcing

PH Outsourcing Industry Sustains Growth

In the midst of a global economic slowdown, the Philippine outsourcing industry was able to maintain its steady pace of growth, the country’s central bank reported yesterday.

The Bangko Sentral ng Pilipinas (Central Bank of the Philippines) presented the results of the 2009 Survey of Information Technology-Business Process Outsourcing (IT-BPO) Services, which surveyed 736 companies involved with the outsourcing industry’s subsectors of contact centers, transcription, animation, software development, and “other BPOs.”

Total revenues in 2009 rose to USD 8.3 billion, up by 30.6% from USD 6.3 billion earned in 2008. All IT-BPO subsectors earned double-digit growth in revenues, according to the BSP. Voice-based services made up half of industry earnings, growing with an annual rate of 48.2% to post USD 4.207 billion in revenues. Software development sales increased by 18.4% to earn USD 1.672 billion, while transcription sales posted the highest growth at 66.8% to earn USD 57 million.

According to the BSP report, the US stays on top of the local outsourcing industry’s clients, followed by Japan, Europe, Australia and New Zealand. The total workforce employed by the industry grew by 25.3% for a total of 444,811 workers in 2009, the BSP report showed.


Financial services sector expected to grow

Everest Group, an international consulting and research firm, shared data about the potential of the financial services sector in business process outsourcing (BPO) to expand. Currently, the said sector is valued at US$16-18 billion, 40 percent of the entire US$40 billion global sourcing market. It is expected to grow 15 times its current market size.

The report entitled “Role of Global Sourcing in Financial Services BPO” tackles topics such as what made the financial service BPO what it is today and how fast it got there.  It also includes analysis of data from clients and service providers, strategies done by financial services companies, as well as factors that affect the demand in various financial sectors such as the banking sector and insurance BPO.
Research Vice-president Saurabh Gupta said, “In the current economic scenario where financial services companies are facing competitive pressures and are reconsidering their cost bases, BPO across industry-specific processes in banking, capital markets, and insurance is generating much interest. Our analysis finds the medium to long-term growth outlook to be significant and robust,” he added.

Rajesh Ranjan, research director and co-author of the report, said “Despite significant challenges, such as constraints in the United States associated with the Troubled Asset Relief Program (TARP) and new data protection measures in the European Union, the impact on global sourcing has been minimal,” and asserted, “Financial services firms and service providers have adapted and properly mitigated against new and emerging challenges.”

The participants in the research done by Everest Group were (strongest global sourcing capabilities): Banking BPO - Genpact, HP and TCS; Capital Markets BPO - Infosys BPO, TCS, and Wipro; Insurance BPO - Accenture, EXL Services, and WNS; and other Services - Capgemini, CSC, eClerx, HCL, Intelenet, Syntel and Xchanging.



PH BPO Industry Attracts Top Financial Firms

by: Ronald Escanlar

Thursday, April 14, 2011 | Outsourcing News | Comments (0)

Global Financial Firms Heading to the Philippines for BPO

The Philippine business process outsourcing (BPO) sector is getting ready to deal with the global demands of multinational financial firms that have flocked to the country, says the Business Processing Association of the Philippines (BPAP), the country’s private association of BPO service providers.

"Based on the 2010 report of Everest Consultancy Institute, the Philippines generated revenues of $5.7 billion in the call center or voice sector compared with India, which had only $5.58 billion revenues last year," says Martin Antonio Crisostomo, BPAP executive director for external affairs.

Crisostomo comments that the country’s BPO companies are already providing services to global financial firms JP Morgan and Deutsche Bank. JP Morgan is currently employing 10,000 BPO workers from a pioneering staff of 200, the BPAP officer explains.

The exponential growth of the BPO industry in the country has even attracted competing Indian BPO firms, opines Crisostomo, citing Indian companies Tata Group and Gen Pact as examples of multinational, Indian-owned companies that have either transferred or started up operations here.

The BPAP officer says the association expects the non-voice sector of the BPO industry to improve revenues this year, especially in the animation and game development areas. "There is a film being made by DreamWorks animation and some portions of PlayStation 3 which are being done by Filipinos here," says Crisostomo.

At present, the Philippine BPO industry employs around 530,000 workers, according to the BPAP.


With a 26 percent revenue growth rate in 2010, which translated to almost $9 billion, the Business Processing Association of the Philippines (BPAP) sees stronger growth, reaching 25 percent a year, for the industry. In the roadmap created for 2010-2016, it is estimated that the outsourcing industry of the country will reach a growth rate of 15 percent.

Last year, BPAP and associations reported that 525,000 individuals comprised the IT/BPO workforce, and $8.9 billion in revenues were generated. With a faster growth rate, BPAP Chairman Alfredo Ayala said the industry can post $25 billion in revenues by 2016 and employ 1.3 million direct jobs and 3.2 million indirect jobs. When it comes to the projected growth rate of 15 percent, the industry is capable of employing 900,000 direct jobs, 1.7 million jobs, and posting revenues reaching $20 billion.

Philippines takes lead in providing call center services

The Philippines had already taken the lead in providing voice-based or call center services. This sector alone grew by more than 20 percent last year. On the other hand, the non-voice sector, which includes back office functions and knowledge process outsourcing (KPO), posted a 30 percent growth rate in 2010.




PH BPO Sector Gets 26% Revenue Growth

by: Ronald Escanlar

Thursday, April 7, 2011 | Outsourcing News | Comments (0)

BPO Philippines Posts 26% Growth

The Philippine business process outsourcing (BPO) industry posted a year-on-year growth of 26%, earning $8.9 billion for 2010, the domestic industry association announced yesterday.

The Business Processing Association of the Philippines (BPAP) said the contact center sub-sector made the highest growth at 21%, generating $6.1 billion in earnings. The growth enabled the Philippines to overtake India in voice-based services. According to Benedict Hernandez, president of the Contact Center Association of the Philippines (CCAP), "The Philippines now leads the world in voice-based customer service."

Employment among BPO companies also increased by almost a quarter, for a total of 525,000 employees for 2010, according to BPAP records. "We achieved robust growth in all major sectors of the industry: voice-based BPO, non-voice business support and complex services, and information technology," announced BPAP chairman Alfredo Ayala.

BPAP said they expect an annual growth of 15% until 2016 – by that time the industry would involve two million jobs generating $20 billion in revenues. "But with greater collaboration from all stakeholders, including government and the academe, we have the potential to grow at 25% a year. This would create 1.3 million direct jobs, 3.2 million indirect jobs, and $25 billion in export revenues," Ayala opined.