Outsourcing News for August 2014 | MicroSourcing
The Philippines is Ready for the ASEAN Integration
According to the People Management Association of the Philippines (PMAP), the country falls short in some areas, but the Filipino workers are all set for the ASEAN integration next year.
Josephus Jimenez, President of PMAP, pointed out that Filipino workers are more competitive compared to workers of their neighboring countries. However, he said Filipino workers need to improve on behavior, character building, and values formation. He also said Filipinos should not worry about the ASEAN integration.
Meanwhile, PMAP Executive Director Rene Gener said the Philippines would need to work on its products by making them faster, more affordable, and better in general.
PMAP cited several issues that are similar to the findings of World Economic Forum - concerns in infrastructure, corruption, inefficient government bureaucracy, tax regulation, and restrictive labor laws.
The sectors that are expected to be at risk with the integration are agriculture, micro-small-medium enterprises, food manufacturing, as well as information technology. On the other hand, sectors that are seen to thrive with the integration are business process outsourcing (BPO), education, services, tourism, and electronics.
ICT/BPO Training Programs in Rural Philippines
In a press conference, Lizabel G. Holganza, President of the National ICT Confederation of the Philippines (NICP), said they are working on several programs that can help rural areas take part in the opportunities from the ICT and business process outsourcing (BPO) sectors. The executive is hoping to achieve this through rural impact sourcing. The program is expected to equip particular underprivileged segments such as out-of-school youth and undergraduates with the basic skills needed in ICT-related tasks.
Holganza added that these training programs are also a great way to discourage people in doing malicious or unlawful acts because they are kept busy.
Impact sourcing is expected to bring communities together and make way for income-generating opportunities which could then lead to changes and growth to individuals, and the nation as a whole. By getting employed in the ICT-BPO sector, they no longer have to leave their communities.
One of the key regions eyed for this program is the Autonomous Region in Muslim Mindanao (ARMM).
Increased Cyber Threats in PH Attributed to BPO
FireEye, Inc. recently stated in a forum that the Philippines is the top target of cyber attacks in Southeast Asia, and one of the key reasons is the strong activity from business process outsourcing (BPO) companies in the country.
The organization's officials said the Philippines surpasses Singapore, Malaysia, and Thailand in having the most advanced persistent threats (APT), which are described as attacks that are programmed to breach a network's security system and harness information which will then be used for political and business gains.
From January to June, the Philippines registered an APT of 56 percent which is higher than the regional average of 49 percent.
Vivek Chudgar, Managing Director at FireEye, said the BPO sector is the key target of the attacks. Nearly 20 percent of the attacks are directed towards the services, consulting, and value-added reseller industry. The government was also a prime target, accounting for 13.5 percent of the attacks, 13 percent at the IT segment, 10.2 percent at media, entertainment, and hospitality, and 9.2 percent was geared towards telecommunication companies.
Thomas Acero, FireEye Country Manager for the Philippines, said the digital attackers are very experienced and they know their way around the field. Some of the malware identified by FireEye are Hussarini and Page.
However, Chudgar noted that even if the BPO sector has been the primary target in the country, the Republic Act 10173 or the Data Privacy Law signed by President Aquino in August 2012 helps protect it from such security breaches. It was also stated that it is better than India's.
Record High Real Estate Activity in the Philippines Driven by BPOs
A report shared by Colliers International, a global commercial real estate firm, projected that office space development in the Philippines will set record high activity before the year ends. By the end of 2014, nearly 480,000 square meters of new office space will be available with the current occupancy rate at 45 percent.
Julius Guevara, Director at Colliers, said the office space expected to be produced this year will be the highest volume of office space recorded in the Philippines. He also noted that the last time the country developed a record number of office space was in 2009 - 467,000 square meters of office space were developed.
Guevara added that the demand for office space is aggressive and the market remains bullish. However, he also said the target volume of office space will not be achieved as some developers may fail to reach their deadlines.
He pointed out that the largest occupant for office space is the business process outsourcing (BPO) industry.
India lost 50% of Call Center Operations to the Philippines
It is a known fact that India was the one to beat in the call center outsourcing segment. But when the Philippines took over the top spot, India had a hard time recovering from its losses, with the lack of cultural affinity and neutral accent in the largest voice market - the US.
In a study done by the Associated Chambers of Commerce and Industry in India, it was reported that India lost more than 50 percent of its call center operations to the Philippines.
Meanwhile, a report from research firm IDC stated that the business process outsourcing (BPO) market in the US is projected to grow at a CAGR of 4.3 percent, and by 2017, it will be valued at $97.3 billion.
However, growth of voice services in the Philippines may soon slow down as it continues to face attrition, lack of manpower, etc.
Proof of the movement between these countries is the transfer of 600 jobs from the Philippines to India because the employees in India are better at upselling services. Companies such as Telstra are bringing back operations to India because of the skilled sales people - further proof that India is a feasible player in the voice outsourcing segment and work will slowly start coming in.
Also, different types of platforms such as email, social media, and chat are being integrated by multinational companies. These are eliminating constraints for India in terms of offering "purevoice" services.
Mix-use Properties for the Retail Segment and Outsourcing Companies
According to property services firm JLL, they are currently developing over 20 mix-use projects which can accommodate more retail proprietors and BPOs that are looking to expand.
The business process outsourcing (BPO) sector still has the largest market share for office properties so far this year - 67 percent of transactions came from the sector.
In a statement, JLL’s Associate Director Lylah Fronda-Ledonio said the percentage is seen to grow by 80 percent at the end of 2014 since the BPO sector is the key driver for office demand in the country.
Meanwhile, Claro Cordero, head of research at JLL, said the new mix-use zones will be able to accommodate different types of segments including retail, restaurants, and residential properties. This will be able to match the preference of new and expanding BPO firms.
He also said the expansion of existing BPO firms and the entry of new players in the Philippines will contribute to the growth. In addition to that, the townships will enable BPOs to have access to skilled and affordable workforce.
In Metro Manila, the township developments are Uptown Bonifacio, Woodside City, Vertis North, McKinley West, ARCA South, La Fuerza, and South Park District.
Healthcare Outsourcing Philippines to create more Jobs
With the robust global healthcare outsourcing industry which is expected to reach $162 billion next year, the healthcare information management outsourcing services (HIMS) segment of the Philippines aims to employ 100,000 by 2016.
According to Dr. Penny Lauchangco, President of the of Healthcare Information Management Outsourcing Association of the Philippines (HIMOAP), the Philippines currently employs 66,000 which is just a portion of the global healthcare outsourcing industry. The executive added that the requirements in the industry are continuously evolving, and demand is growing.
Lauchangco noted that the country has the resources needed and they are doing their best to tap them to reach the target of 100,000-strong workforce by 2016. Healthcare information management is said to be the largest contributor to the growth, and the United States has the largest market share.
Growth in the healthcare information technology industry is seen in the establishment of new players, as well as the spread of high-value and specialized processes that cater to the complex requirements in the healthcare industry.
One of the challenges cited by Lauchangco is the shortage of skilled candidates who match the requirements of the segment. She also pointed out the lack of partnership among private and government institutions that can help address talent pool problems. Meanwhile, she said HIMOAP is committed to achieving the necessary human resources requirements that can empower the country to be one of the preferred healthcare IT outsourcing destinations.