The Philippines serves as haven to countless international business opportunities. As a winning outsourcing destination, the country has earned a good reputation as an excellent offshore services provider. Business Process Outsourcing (BPO), among other outsourcing ventures, consistently creates a mark in local corporate and economic stability. It is an industry which promises a lot of potential for the Philippines in terms of investments and labor force utilization.

A Budding Sector
Outsourcing involves the partnership between a foreign firm and its qualified locally-run counterpart. It takes several forms, namely: BPO, contact centers, medical and legal transcriptions, software development, animation, graphics, engineering, and computer-aided design. Clinching the leading posts in the corporate community are the call center and BPO sectors.

In an outsourcing country’s perspective, call centers are extended business outposts abroad that support the Customer Relations Management (CRM) needs of onshore clients. On the other hand, BPO addresses multinational corporations’ (MNC) expanded back-office operations in outsourcing destinations. Canada, Mexico, China, India, and the Philippines are prime industry players, with the last two as mainstream stakeholders. In relation to this, the United States, Europe, and Asia (Japan), respectively maneuver 50%, 30%, and 20% of onshore conglomerate claims for BPO.

BPO Activities in the Country
Interpharma Ltd. and its Philippine subsidiary Zuellig Pharma Inc. put up the Information Systems Group (ISG) to cater to the former’s Information Technology systems and application development needs. It works around corporate issues through IT development, infrastructure and support capability, program management, and business systems analysis.

American International Group, Inc. (AIG) and its Philippine partner Philamlife AIG Inc. merged and kicked off the AIG Business Processing Services, Inc. (AIGBPSI) late last year. This outsourced processing center initially conducted proxy corporate communications and transactions such as data entry, indexing, mail management, correspondence, claims disbursements, and premium processing, then moved on with the additional assignment of handling customer service affairs.

In July, Procter & Gamble, Inc. (P&G) inked a ten-year contract with Hewlett-Packard Philippines (HP). The agreement indicates that HP will be handling P&G’s IT needs in terms of data center operations, desktop and end-user support, network management, and applications development and maintenance.

Backroom operations similar to those mentioned continue to thrive locally, focusing on non-core yet critical operations such as accounting, human resource administration, claims administration, and logistics functions. At the forefront of this promising industry are Ayala Systems Technology, Inc., AyalaPort Makati, Inc., Corporate Information Solutions, Data One Asia Philippines, Inc., Radix Systems Services Corporation, and Software Ventures, International (SVI).

Although the US and Europe predominantly take account of BPO in the Philippines, Asian leader Japan continues to partake in our capabilities as an outsourcing destination. Recently, four Japanese firms expressed interest in putting up their offshore facilities in the country. Epson Software Development Center, Nihon Design Engineering Co., Ltd., Maejima Industry Co., Ltd., and 10art-ni Corporation will be launching their back office operations in the Philippines by the end of the year.

The Filipino Knowledge
BPO projects enter the Philippine business market mainly because of our noted telecommunications infrastructure and workforce capability and potential. The Department of Trade and Industry (DTI) boasts of the availability of top-quality, yet economical communication bandwidth in the country. This alone duly gives us a competitive edge. DTI statistics also report the impeccable position of our special economic zones built as IT parks and buildings. These facilities are equipped with unstinted supply of telephone lines, ISDN (Integrated Services Digital Network) and fiber optic technologies, power, computer security, and building monitoring and maintenance systems.

Evidently, both our Information Technology (IT) and Information Management (IM) aptitudes present a viable prognosis for fostering progressive BPO relationships with foreign firm clients.

Moreover, Filipinos – with a collective 94% literacy rate – form a dynamic pool of laborers, employees, and executives. Foreigners regard our encompassing expertise in technical and managerial workload, extensively armed with a people-oriented disposition, as a catalyst for interdependent employment. Place the Filipino in a technical position and he is sure to excel by meeting and even surpassing expectations. Give him a managerial post and he is bound to deliver thoroughly well and consequently, will be motivated further to work his way up the transnational corporate ladder.

With the META Group (a provider of information technology research, advisory services, and strategic consulting) ranking the Philippines at the top of the tier in availability of knowledge-based workers and jobs, and fourth in the overall quality of labor output, Filipinos are undeniably one of the more highly qualified players in the global arena. Apart from superior work ethics – our partially westernized culture as manifested in our lifestyle, alongside our proficient English-speaking skills – attracts foreign companies to seek our services and labor pool. In line with this, back in 2000, Hong Kong’s Political Risk Consultancy Ltd. declared that the Philippines is the leading Asian nation and third internationally in terms of the quality of expatriate life that we offer. True enough, the conducive lifestyle we provide expatriates assures foreign investors of a harmonious and proactive state of coexistence as they conduct business in our country.

Globally Competitive
Multinational corporations (MNCs) profusely divert their attention to, and invest their resources in developing countries in search of reasonable and high-caliber service providers and business affiliates. India and the Philippines signify latent performance and therefore respond as niches to BPO opportunities, particularly in Information and Communications Technology (ICT), IT, and IT-enabled services. As such, we benefit from multibillion dollars worth of issuance and revenues, allowing us to access a highly-globalized market arena more conveniently.

However, our country admittedly still needs to adopt and implement developmental measures to keep pace with the global competitiveness that BPO entails. The foremost strategy deemed to empower the Philippines is to upgrade the national standard of IT education. By revising curricula in pursuit of IT and IM discernment, more and more Filipinos would be qualified to work in the world of technology where BPO opportunities and challenges abundantly thrive.

Validating IT professionals is another proposal that aims to assure foreign firms of the Filipinos’ IT and IM competence. Likewise, company certification that matches international probity standards would definitely secure local firms’ stability in the competitive market, and thus finding foreign firms interested in working at possible business endeavors with them.

Anti-Outsourcing Sentiments in Major Markets
At an age and time where interdependence works its way across the globe, there was no better break for BPO to have played its part when it did. Consequently, outsourcing has and shall continue to affect economic decisions, while gradually politicizing worldwide business affairs.

With the onset and success of BPO concerning the US, Europe, and Asia, it would be pure naivete to think that it won’t create a stir among the labor sectors of the said countries. Such is the situation now brewing in the US with the states of New Jersey, Maryland, Connecticut, and Washington now in the process of legislating measures that would counter outsourcing in their respective governments. These states are motioning a ban on externally subcontracting workload to developing countries. Threatened apparently by overseas competition, some US lawmakers now fear the rising unemployment numbers of their blue-collar workers as service firms continue to shift jobs to cheaper locales outside the US. This apprehension is not unfounded as Forrester Research predicts that 3.3 million service jobs would have moved to countries like India, Russia, China, and the Philippines in the next 15 years.

Yet for outsourcing destinations, halting continuity in BPO projects contradicts the America’s backing for free trade and market access. In effect, as outsourcing promises a progressive relationship between and among the countries involved, some US government officials dismissed the pending bills as “bad policy” that hinders collective growth for American firms and their partners abroad.

RP-India Tandem?
On a lighter note, as the leading outsourcing destinations, India and the Philippines explored the scope of BPO even more. India’s National Association of Software and Services Companies (NASSCOM) and the Philippine IT Offshore Network (PITON) transcended their competitive differences into yet another business opportunity that would result in mutual gains and benefits. NASSCOM members have informed PITON of their interest in turning to the Philippines as a destination for India’s offshore service needs.

An executive of international research firm Gartner, Inc. stressed this potential for cooperation between India and the Philippines, saying it makes good sense for both countries’ outsourcing providers to seek “synergistic opportunities.” By complementing and playing on each other’s strengths, an RP-India tandem is seen to be a formidable force that could counter the threat that China poses in the regional IT-enabled services landscape.

Home Front Strategies
The Philippine government and the private sector are tossing in optimal support to strengthen our ICT industry. The Information Technology and E-Commerce Council (ITECC) promulgated ICT-related laws such as the Electronic Commerce Act, National Information Technology Plan, ISP.COM and the Medium Term Development Plan. These policies aim to elevate the country’s ICT capability a few notches above its present standing.

The private sector, on the other hand, took the liberty of empowering IT skills through offering extensive training and enabling the certification of the local IT workforce. It has also undertaken a bold initiative called Outsource Philippines – a one-stop information gateway to the country’s key ICT activities of contact centers, business process outsourcing, medical and legal transcriptions and animation, among others. Outsource Philippines aims to brand the country as the premier choice or the “destination for outsourcing,” to establish a network of partners and alliances for the industry and to leverage the potential of onshore Filipino overseas professionals. Outsource Philippines will play a key role in attracting possible foreign clients and with its success, the Philippines would be closing more and more BPO deals in the future.

Outsourcing in the Philippines
While some analysts are now saying that the Philippines would be suffering a huge economic setback in the coming years because of perceived political instability, progenitors of the local outsourcing industry are still optimistic that the BPO sector would not suffer such a big blow. Although concerns over the country’s security are a common worry among potential investors, recent developments such as the decision of Western Wats to start their operations in Cebu in August show that even the occurrence of incidents like the failed mutiny in Makati has not soured the general interest of foreign investors.

As BPO continues to make its mark in the local business community, investments and revenues continue to build up. For a developing country like ours, where unemployment and a stunted local industry are among other related concerns that have yet to be resolved, BPO does yield varied prospects for career growth and economic stability. For the US, Europe, and Japan, outsourcing addresses their corporate needs efficiently and practically. The win-win relationship between outsourcing countries and outsourcing destinations spells out success. However, BPO’s growing hold over the country should be guided strategically and wisely for the same reason that the world’s leading economies are limiting our chances of developing our very own business sectors and industries.