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Outsourcing News for July 2013 | MicroSourcing

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PH BPO to further Improve Talent Pool

by: Sarah Joson

Wednesday, July 31, 2013 | Outsourcing News | Comments (0)

The Philippines to train 1.1 Million Filipinos for BPO

With the rising threat to the Philippines’ position as a leader in the global business process outsourcing (BPO) industry, the country is set to reinforce its talent pool by training at least 1.1 million Filipinos.

According to Jose Mari Mercado, President and CEO of the Information Technology and Business Process Association of the Philippines (IBPAP), training programs will be done with the help of public and private partnerships.

Mercado added that these efforts are designed and expected to improve the capabilities of the country so that more Filipinos will have the option to stay and work locally, rather than find opportunities abroad.

In 2012, the local BPO sector accumulated 13.2 million in revenues from voice and non-voice segments of outsourcing and employed 777,000. For 2016, the sector aims to reach $25 billion.

For countries like the Philippines and India, information technology-business process management (IT-BPM) had influenced the reduction of poverty and nationwide growth. Both countries are the leaders in voice and non-voice process outsourcing in Asia.


The launch of PhilHealth’s (Philippine Health Insurance Corp.) eClaims (digital claims) program prods optimism within the Healthcare Information Management Outsourcing Association of the Philippines (HIMOAP).

Great news for the healthcare information management of the Philippines

The healthcare information management (HIM) of the Philippines sees this as great news because of possible job opportunities for the country’s local health professionals.  

According to HIMOAP President Dr. Josefina Lauchangco, the launch of the complete eClaims program is great news as they expect more employment opportunities to the unemployed healthcare professionals. She added that is a breakthrough for efficiency in the local government and its processes. It is also seen to reinforce private and public partnerships.

Meanwhile, HIMOAP Industry Development Committee Chairman Myla Mundo-Reyes said the event is a milestone for the Philippines and is putting the country on the map as a promising destination for healthcare information management services.


During the quarterly CEO briefing of the Information Technology and Business Process Association of the Philippines (IT-BPAP), Senior Executive Director Gillian Joyce Virata said the minimum revenue target, which is $20 billion, could be achieved in the next two years.

Growing demand seen in the IT-BPO sector

The IT-BPO sector sees the growing demand for high-value products compared to low-value processes.
According to the updated 2013-2016 IT-BPO roadmap, this year’s revenue is projected to reach $15.8 billion from last year’s $13.2 billion. For the industry to achieve its end goal of $25 billion by 2016 and 1.3 million jobs from the current 770,000, it has to achieve a 17-percent annual growth rate in three years. 

Virata noted that the growth of the sector is caused by the rising demand of companies for high value products.

Virata also cited data from IT-BPAP’s survey that 43 percent of the 850 BPO firms in the country earn their revenues from high-value processes. The study likewise showed that 23 percent of BPO firms generate 70-89 percent of revenues from high-value offerings.

Other findings showed that 75 percent of the total revenues are from BPOs based in Metro Manila, and the rest are from other major cities.


In a study done by polling group Nielsen, countries from Southeast Asia fared well in the rankings for the most confident based on their economic prospects. Indonesia was found to have the most confident consumers.

Increasing number of middle class consumers in Southeast Asia contributing to consumer confidence

The increasing number of consumers belonging to the middle class in Southeast Asia and its dynamic growth are contributing to the region’s rankings. Indonesia, the biggest country in the region, posted an index of 124, followed by the Philippines with 121. The average index score recorded by Nielsen’s Global Survey of Consumer Confidence is 94.

Meanwhile, India took the third spot, followed by Thailand, Brazil, China, United Arab Emirates, Hong Kong, Malaysia, and Saudi Arabia.

The survey aims to determine the economic outlook of consumers’ confidence in the job market, readiness to spend, and personal financial capability.

Over 29,000 from 58 countries took part in the survey which was held last May 13-31.

Vishal Bali, Managing Director of Nielsen’s Consumer Insights Business in Southeast Asia, said globally, consumers in the region are the most optimistic about the economic outlook. He added that minimum wages are increasing, caused by the influx of foreign investments and growing middle class.


After being snubbed by President Aquino during his fourth State Of the Nation Address (SONA) last Monday, representatives of the BPO Industry Employees Network Philippines are urging the President to support the proposed bill that aims to protect the welfare of BPO workers in the Philippines.

BPO industry workers lobby for President's support of proposed bill

The organization stated that President Aquino can help move things along by requesting the Congress to prioritize the bill which is set to warrant employees better working conditions and job security.

Terry Ridon, Kabataan party list Representative, filed the BPO Workers’ Welfare and Protection Act of 2013 or House Bill 1180.
Other important provisions seen in the bill are regularization of trainees upon six months of employment or completion of the maximum probationary training period, standardized implementation of bathroom breaks, automatic granting of medical benefits once employment contract starts, and exercise democratic rights.

The group said they expected the President to discuss the law that will protect employees from BPO companies that disregard the well-being and security of its workers. However, that wasn’t the case.

The group also noted that since BPO employees contributed 22 percent of the local services sector’s revenues, they should have additional protection and security.


Mobile Computing Outsourcing Growing in new ITO Markets

A 13-percent growth rate is projected for the new IT outsourcing (ITO) markets such as Asia-Pacific and Greater China.  

According to a research done by Gartner, businesses are now looking to adopt and integrate more IT-based processes such as mobile computing.  

In an interview, Freddie Ng, Senior Analyst at Gartner, shared with BizIT that more and more businesses are adding new technology to their processes to keep up with the demand of users, which in turn is propelling the growth of IT outsourcing.

Another reason he said is the aspiration of companies to become more agile, which is why they are keen on cloud integration. He also noted that CIOs are looking for more convenient and flexible solutions that will enable them to avoid spending on building IT infrastructure that will be irrelevant in the future. Some of the processes CIOs are considering are co-sharing of data centers, hosting, and cloud computing.

Mobile adoption is also a crucial factor for the growth of the ITO market in the region. The rise of the use of mobile devices such as smartphones, tablets, and other devices leads to an increase in demand for mobile device management services.


IT outsourcing spending to increase

A report from technology research firm Gartner states that the global IT outsourcing industry will grow this year, reaching US$288 billion. IT outsourcing spend would increase 2.8 percent in USD, and 5.1 percent in constant currency.

Emerging markets like Asia-Pacific, Great China, and Latin America were seen growing over 13 percent.

According to Gartner Research Vice-president Bryan Britz, the slowdown in the IT market’s overall growth is caused by near-term market factors like economic, labor and political environment, rapidly evolving IT outsourcing delivery models, and the financial performance and budget of service providers. Moreover, he said projections for 2013 will be similar to 2012 forecasts.

However, Gartner’s projections for 2014 are higher to prepare for custom application outsourcing and infrastructure services. From the figures drawn up, software-as-a-service remained excluded from its outsourcing numbers.
Britz noted that the propellers of cloud and data center service management segment are enterprise buyers looking for IT strategies, as well as the demand from small and mid-sized business buyers for infrastructure as a service (IaaS). The data center outsourcing market is declining due to the migration of workload to IaaS and infrastructure utility services outpacing data center outsourcing.

Also, the rapid adoption of mobile devices and connectivity is driving the growth of IT support outsourcing.


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