GLOBAL CONSULTANCY firm Tholons, Inc. has cited talent pool as a challenge to the Southeast Asian countries’ business process outsourcing (BPO) industry but said it foresees niche specializations of the sector to continue to grow.

This, as 12 cities from the Southeast Asian region, including five from the Philippines, made it to Tholons’ Top 100 outsourcing destinations.
The five Philippine cities are Manila (4th), Cebu (9th), Davao (69th), Sta. Rosa (86th), and Iloilo (92nd).

“Addressing talent pool shortages will be the most critical issue in the Southeast Asian region’s IT (information and technology)-BPO industry as a whole. These should be immediately addressed to further drive the growth of the services outsourcing industry,” the firm said in its 2012 Tholons Top 100 Outsourcing Destinations: Southeast Asia executive summary released yesterday.

“This is especially significant as widespread cost-cutting measures brought upon by the recession in the US and UK markets are being pursued, which in turn, are driving up the demand for outsourcing,” the document read.

Tholons said BPO firms are experiencing difficulty in hiring and retaining “capable employees,” thus, resulting in higher attrition rates and an increase in hiring and retention costs.

“[Such] has resulted in greater initiatives by service providers to train fresh graduates or reskill lateral hires themselves, an exercise becoming increasingly common albeit more costly,” Tholons said.

Already, Tholons noted an initiative for skills development currently being undertaken in Manila is needed to increase the country’s talent supply.
“The Technical Education and Skills Development Authority (TESDA) of the Philippines, for example, has been continuously providing Finishing Courses for Call Center Agents targeted to near-hires in the Contact Support space,” the document read.

Despite the region’s foreseen supply problems, Tholons said niche specializations offered are expected to grow.

“Tholons sees that the region’s current niche specializations will continue to grow and pave the way for the development of higher-value services in Southeast Asia,” the document read.

Tholons said that in 2011, Southeast Asian countries have been steadily building their own outsourcing identities.

The Philippines has continued to be the premier contact support services destination, while Singapore and Malaysia have become financial and accounting outsourcing and back-office process outsourcing pillars, Tholons said.

Vietnam and Indonesia, meanwhile, have established themselves as strong providers of IT services, Tholons said.

“As confidence and maturity builds, process and delivery innovation will thrive as well. Tholons sees this as necessitating Southeast Asia’s smooth transition up the services value chain,” the document read.

The local BPO sector is expected to have booked $11 billion in revenues in 2011, then to grow by at least 20% from this number by yearend, the Business Processing Association of the Philippines previously said.

By 2016, the sector is expected to deliver $25 billion in revenues, after recording $9 billion in revenues in 2010.

Source:http://www.bworldonline.com/content.php?section=Economy&title=Talent-pool-a-challenge-in-Southeast-Asia-BPO—-Tholons&id=45148

Asia-Pacific’s* business process outsourcing (BPO) market will reach revenues of US$17.47 billion in 2015, a compound annual growth rate (CAGR) of 9.3 per cent from the US$11.18 billion it hit in 2010, predicts Ovum**.

The independent technology analyst finds that strong growth in emerging economies such as India, Greater China (includes Taiwan and Hong Kong) and South Korea is driving the global market forward, as businesses in these regions wake up to the benefits of BPO.

According to Ovum’s forecast, the BPO market in Greater China will increase at a CAGR of 16.1 per cent from over the forecast period (the end of 2010 to the end of 2015). Meanwhile India and South Korea’s market will increase by 15.7 and 14.6 per cent for the same period, respectively. Among the developed economies in Asia-Pacific, Australia and New-Zealand’s BPO market (ANZ) shows the most traction with a CAGR of 7.4 per cent over the forecast period.

Ovum analyst Hansa Iyengar commented: “In the post-recession business environment, it has become imperative for enterprises to keep costs under tight control to maintain competitiveness. BPO eliminates the need to invest in people and systems to manage non-core processes, potentially reducing costs and increasing efficiency. By outsourcing these processes, enterprises can focus their resources on growing their core business.

“Moreover, BPO is also gaining ground in areas such as HR, engineering design, and research and development outsourcing. Enterprises are realising that outsourcing these areas can also be an effective way to achieve reduced costs, increased efficiencies, and faster go-to-market for new products, much in the same way that outsourcing back office processes can.”

According to Iyengar, it will be developed economies that will exploit these new BPO areas most, with emerging markets newer to the arena adopting first generation outsourcing such as customer care, payroll processing and help desks.

According to Iyengar, to take advantage of the predicted growth in outsourcing, vendors will need to be aware that pricing of contracts is the major issue at the negotiating table in the current scenario. She added: “Enterprises are moving away from multi-billion dollar, single vendor deals, and spreading out their investments and risks.

“Meanwhile, the small-to-medium sized enterprise segment is rapidly opening up to outsourcing and vendors need to be prepared with a game plan to meet this segments demand for low-priced, highly-flexible and scalable solutions, which are accompanied by the option to customise offerings and personalised customer service.”

Source:http://www.voxy.co.nz/business/asia-pacific-bpo-market-reach-us1747b/5/101952