Companies in the Philippines’ Business Process Outsourcing (BPO) sector are increasingly optimistic that their businesses will grow substantially in the next 12 months according to the most recent industry survey conducted by Business Processing Association of the Philippines (BPAP) and Outsource2Philippines (O2P). The survey also revealed that the shift to non-voice and more complex services continues to accelerate.

The results of the survey are being revealed today by BPAP and O2P in the second in a 2010 series of regular breakfast briefings for senior executives. As in the case of previous surveys, this one showed that industry has a strategic concern that could undermine an otherwise rosy outlook. That concern is people. As the industry grows, the shortfall in qualified personnel is becoming increasingly critical.

Much of the world remains mired in recession and economic uncertainty, but that appears to be benefitting the BPO industry as North America and EU clients pursue alternatives for lowering costs while maintaining or increasing services standards. For many smaller BPOs, a significant portion of their client base is closer to home in Asia, where economies are growing faster. They are benefitting from relative regional prosperity.

Industry executives are also upbeat over the improved political perspective of the Philippines. Respondents indicated that the smooth conduct of national elections in May was viewed positively by investors and clients, and over 80% said the smooth transition of power from the previous administration to that of Benigno S. Aquino III had a positive effect on investor perception. Only one percent said the transition had less than a somewhat positive effect on perception of the Philippines by investors.

Although the industry believes it enjoyed a cordial relationship with the administration of former president and now congresswoman Gloria Macapagal Arroyo, respondents said they anticipate an even more productive relationship with Mr. Aquino’s government. That positive outlook may have something to do with the regulatory and incentive environment, which respondents view as good, but not necessarily competitive. They appear to be looking to Mr. Aquino’s administration for improvements.

But just how rosy is the outlook, and where do the opportunities lie? To be succinct, the positive perspective is almost profound, with 65% of respondents indicating their companies will grow between six percent and 50% in the next 12 months. Another 15% say their organizations will grow even faster across a range of sectors. Virtually every value-added sector is growing, including IT services, marketing services, engineering services, value-added back-office processes, content services, and medical knowledge process outsourcing services.

Executives will probably be quick to caution that things could still go wrong, nevertheless. Although not a topic of the current survey, competition is on the rise, for one thing. When I asked a prominent investor in financial shared services last week about competition for investment, he cited Central and South America—specifically Costa Rica—Egypt, and some eastern European nations, particularly Poland. He also said China is a threat. Increasing competition is the top one, two, or three concern for about 40% of respondents.

Increasing competition for investment suggests that the Philippines must ensure that its competitive positioning remains strong, signifying that the regulatory and incentive environment should indeed get the administration’s attention. The biggest threat, however, lies within the Philippines and is the people issue. There are two levels of concern. The first has to do with the availability of entry-level personnel, particularly as Philippine BPO moves up the value chain.

The tight labor market for these knowledge workers is the number one or two top risk area for almost half of respondents. Industry executives say it is imperative that they be able to hire more than the 5-10% of applicants that is presently the norm if the industry is to continue growing rapidly. While the availability of qualified workers has been a chronic issue for the industry, the latest survey indicates that concern is intensifying.

Developing and retaining middle managers is the second level of concern. More than half of respondents – 58% – say this is the number one, two or three most important development issue affecting their capacity to grow. As in the case of entry-level workers, concern over the capacity to develop and retain middle managers appears to be intensifying. This concern will only accelerate as the shift to non-voice, complex services accelerates further.

The BPO and shared services industry is in many respects an economic development miracle. It developed because conditions were positive for growth: Good infrastructure, good people, and a reform-minded government that desperately wanted to create jobs. It can continue to be a miracle, but for that to happen both industry and government must work together to address these concerns – while they are addressable.

Source:http://www.mb.com.ph/articles/270453/bpo-optimism

‘A smile through a phone,” that is the basic competitive advantage of the Philippines as a business-process outsourcing (BPO) location over other locations like India, so underscored Mohan Kulkarni, president of IP Contact Center Outsourcing Inc., during the panel discussion on Philippine Services Export Prospects in the Asian Institute of Management Business Leaders Forum yesterday.

My friends from the BPO and media sector who were there sent me this text message: “Then, Rajat Nag, Asian Development Bank’s managing director-general said in his keynote: ‘As a friend, I will not hold back my punches: What is the vision of this country? The Philippines has a tremendous ability not to think in times of crisis, and not to soar in the best of times…. The remittances have a tremendous ability to cushion shocks, but they also take away any incentives for any fundamental changes…. What is keeping [Filipinos in the BPO sector] from being analytical and logical [the competitive edge of India as BPO destination], and still able to communicate that smile through that call?’

Rajat Nag was effectively gently “nagging” the business and academic elite in that forum to think and act seriously on our nation’s niche: “I see the challenge for the new administration to strengthen the country’s fiscal position and to improve investment plans…. As a low-middle-income country, [the BPO sector may be a ] trap, if the country doesn’t seriously start thinking about its niche—of aspiring to move from call centers to knowledge-process outsourcing, from legal transcription to legal documentation: What are you going to be known for?”

Certainly no smile came across with my friends’ text messages. That globalization of “smile through a phone” at what cost? What price—social price—to raise the bar for BPO? To go rapidly from a start-up industry to infrastructure- and incentive-driven sector to value-adding/value-creating niche? One texted: “Didn’t I tell you, Father, that the No. 1 product selling in convenience stores in our BPO buildings were condoms, not energy drinks or chocolates? So now we have this mess of people thinking BPO workers are ‘unclean’ [HIV-AIDS prone] and the Church and the Department of Social Welfare and Development are at loggerheads over the condoms distribution with flowers on Valentine’s Day.”

Dorothy Day, founder of The Catholic Worker, came to mind. How would she handle this challenge? She, who reflected on her young years in her autobiographical novel, The Eleventh Virgin, as years of a “bohemian lifestyle…dissolute, wasted, full of sensation and sensuality.” Later, in The Long Loneliness, my favorite of her works, she recounts how, as she stood on a curb on the streets of Washington, D.C., watching the hunger march that the communist Americans organized to push for social legislation to combat unemployment, establish pensions, and provide relief for mothers and children in the hot summer of 1932, she felt joy at the courage of the marchers and bitterness at her new conversion to Catholicism: “I could write, I could protest, to arouse the conscience, but where was the Catholic leadership in gathering bands of men and women, for the actual works of mercy that the comrades had always made part of their technique in reaching the workers?”

BPOs are redefining what a “worker” means today, creating its own long loneliness. Contracted services. Pay-for-service. Deconstructed value chain. Bonus now, not tenure later. The millennial generation knows this new definition of worker more than we do. Yet something remains of exploitation of a work force, be it of the Great Depression or this Great Global Economic Crisis. I could almost hear Dorothy Day echo Peter Maurin, as she wrote further, “[We need to build] a society in which it is easier for people to be good…knowing that when people are good, they are happy.” In April 1933, Day and Maurin, in the depths of the Great Depression, came out with the first issue of The Catholic Worker, sold for a penny a copy on Labor Day. Dorothy Day underscored: “We called the paper The ‘Catholic’ Worker because at the time many Catholics were poor…who were criticized for a lack of social and political morality…those who worked with hand or brain, those who did physical, mental or spiritual work. But we thought primarily of the poor, the dispossessed, the exploited.” In April 1968, she wrote of “the faith that man is capable of change, of growth, of growing in love.”

Can we reconcile growing in love with developing a competitive need for rapid growth in a postcrisis Philippine economy with least social cost? Pope Benedict XVI in Caritas in Veritate has a concrete advise: “The strengthening of different types of businesses, especially those capable of viewing profit as a means for achieving the goal of a more humane market and society, must also be pursued in those countries that are excluded or marginalized from the influential circles of the global economy. In these countries it is very important to move ahead with projects, based on subsidiarity, suitably planned and managed, aimed at affirming rights yet also providing for the assumption of corresponding responsibilities. In development programs, the principle of the centrality of the human person, as the subject primarily responsible for development, must be preserved. The principal concern must be to improve the actual living conditions of the people in a given region, thus enabling them to carry out those duties which their poverty does not presently allow them to fulfill. Social concern must never be an abstract attitude. Development programs, if they are to be adapted to individual situations, need to be flexible; and the people who benefit from them ought to be directly involved in their planning and implementation…. Solutions need to be carefully designed to correspond to people’s concrete lives, based on a prudential evaluation of each situation. Alongside macro-projects, there is a place for micro-projects, and above all there is need for the active mobilization of all the subjects of civil society.” May the next, new administration heed this advice.

Source:http://businessmirror.com.ph/index.php?option=com_content&view=article&id=24449:smiling-bpos-and-catholic-workers&catid=28:opinion&Itemid=64