The global economic slowdown has brought little detrimental effect on the business process outsourcing (BPO) industry in the Philippines. While many industries are on job-trimming spree, BPOs are hiring new workers and have even expressed plans to accept more job applicants in the near future.

Job cuts abroad have forced thousands of Overseas Filipino Workers (OFWs) to book a plane ticket to fly back home. But all is not bleak in the $180 billion industry that continues to attract some of the best workers in the Philippines.

Take the case of Convergys, its continuing expansion manifests the minimal impact brought about by the economic recession across various countries in the world on the business process outsourcing in the Philippines. In fact, the company said, it foresees unimpeded growth this year and next year as the company gets new clients, most of which are US-based firms.

The equation is simple. During economic crunch, private companies in industrialized countries would seek higher profitability to sustain their operations, and one way to do just that is to minimize operating costs. So, these profit-seeking firms would start tapping resources abroad without hurting their budget. Some jobs at their home base must be wiped out, but the essential departments of the company’s operations such as customer service, accounting, and contact services must remain in the picture.

Early speculations spoke of a dreary fate of the Philippine BPO. Just as companies abroad are shutting down in the face of recession and other financial troubles, some have said, demand for outsourcing jobs in the third-world countries would automatically wane.

But the opposite scenario is happening. While it is true that a bankruptcy of one Western company means a loss of BPO client, say, in the Philippines, the current economic hemorrhage can also force other companies to seek human resources abroad to trim down operating cost.

Why is the Philippines a favorite choice of BPO investors? The country’s flexible workers, their English proficiency, and industrious job attitude remain the top reasons cited. Our educators should remember that without English proficiency of graduates, it is almost impossible to attract BPO clients here. The Filipinos can be that hard working, but without mastery of the English language, which is the universal bridge to connect the East and the West, hard work is only one part of the whole equation.

Today the country is the third largest source of BPO jobs, trailing behind giants India and China. In 2006 alone, at least 200,000 Filipinos are working in various BPO contact centers in the Philippines. The figure has almost doubled then. If we continue to make good in the BPO industry, its growth can keep tens of thousands of Filipinos stay at home and still act as breadwinners with their loved ones around.

Knowing that the BPO industry in the Philippines is contributing much to the country’s economic agenda, misguided government educators in Manila should stop hallucinating, insisting Tagalog be the medium of instruction in public schools nationwide.

We cannot allow backward mentality to hamper national progress.

Source:http://www.theboholstandard.com/editorial.php?issue=228&s1=3912&s2=&s3=&s4=1164&s5=3914&s6=&s7=1163&s8=1162&s9=&s10=&s11=&s12=1165&s13=&s14=&s15=

Having toppled outsourcing giant India in the call center market last year, the Philippine ICT industry is aiming to level up further this year as the government and the private sector team up to set ambitious revenue goals and draft long-term programs.

According to analyst firm XMG Global, 2011 should be a positive year for the country’s IT market with overall IT spending estimated to grow 11 percent to US$3 billion.

The BPO (business process outsourcing) industry, one of the country’s main revenue earners, is again leading the charge. Industry group Business Processing Association of the Philippines (BPAP) is targeting to hit US$11 billion in revenues in 2011, a 20 percent increase from estimated US$9 billion in 2010.

The Philippines last year dethroned India as the global call center hub, hitting US$5.7 billion in revenues against India’s US$5.5 billion and employing more call center workers than the former leader.

BPAP and the Philippine Commission on ICT (CICT) are projecting that the industry could create an additional 84,000 jobs this year, bringing the total number of IT-BPO workers in the country to 610,000.

The figures tally with XMG’s estimated forecast which revealed that the growth of talent employed in offshore services for 2011 will reach 651,425. “One of 12 employed professionals in Metro Manila will be working either in BPO, call center or IT services,” said Phil Hall, principal analyst at the research firm.

BPAP’s chief, Oscar Sañez, said in an earlier statement that aggressive marketing, both locally and internationally, will be key for the Philippines to achieve the US$11 billion-revenue goal. “We have to increase the awareness of our potential employees of job opportunities in IT and BPO companies, including those in the knowledge process outsourcing and other non-voice sectors. We also have to improve our visibility internationally to market new services in new territories,” he said.

Sañez also noted that President Benigno “Noynoy” Aquino III in December 2010 had pledged to allocate 62 million pesos (US$1.4 million) as “BPO promotions fund”, adding that the amount would help the industry achieve this year’s revenue goal.

Focus to include broadband, digital TV
For the CICT, the government agency in charge of the local ICT market, boosting the BPO sector is just one part of the “digital strategy” which spans 2011 to 2016.

Ivan John Uy, who heads the agency, told ZDNet Asia in an interview that the five-year plan–which will be launched soon–aims to enhance the country’s software, telecoms, e-government and postal sectors.

This year, the CICT is coordinating with various academic and non-formal education institutions to “re-tool” jobless college graduates and youths, Uy said. “For instance, our nursing graduates who don’t have work yet can be trained to become medical transcriptionists and healthcare support specialists,” he said.

He cautioned that the country has to quickly replenish or augment its BPO manpower base. “We run the risk of [skills] shortage. We have lots of jobless people around but they don’t have the skills,” Uy said, adding that the government is also looking at the possibility of offering a “study now, pay later” scheme for the unemployed.

The CICT this year will also be preparing for the country’s migration to digital TV, he said, elaborating on plans for the local telecoms sector.

Last year, the National Telecommunications Commission (NTC)–which operates under the CICT–selected a Japanese digital TV standard which broadcast companies must adopt by 2015.

Uy explained: “As part of our preparations, I’ve directed the NTC to organize a technical working group to draft, within the year, implementation rules and regulations (IRR) which would also serve as a guideline for broadcast companies.”

Touching on the private telecoms sector, XMG said increased competition will force mobile operators to roll out better pricing, especially with regard to data plans and long-distance charges.

“[Leading] service providers will be those that can leverage their wireless and extended bandwidth capabilities,” noted Hall, who is based in Manila. “Price, services and local content provisioning will be the dominant lure and battleground, as social networking continues to grow dramatically and cuts into the SMS market.”

In the broadband space, the XMG analyst said subscriber base growth will be propelled by intense competition which will push down the prices of entry-level packages.

“Competition is increasing between fixed-line, cable and mobile providers,” he said. “Among telco giants PLDT Smart and Globe Broadband, subscribers will continually lag behind cellular subscription. However, broadband will continue to remain [these operators'] growth area [and see] double-digit growth, making it an important revenue stream for all carriers.”

Given the increasing demographics of Filipinos who are clamoring for better quality of service and pricing both at home and on-the-move, consumers are unlikely to stick to a single provider when buying broadband services, he noted.

“[To lead the market], service providers will need to develop loyalty programs and provide attractive pricing and bundling schemes,” Hall said. “Internet TV will not take traction in the Philippines yet, but we foresee tie-ups between TV content providers and Internet for on-demand replay of shows. Watch for PLDT Group’s TV5 as they strategically evolve to become the natural fit to take on this leadership role.”

An interoperable government
Turning to e-government initiatives, Uy said the CICT will be pushing for interconnectivity and interoperability between IT systems deployed across different government agencies.

“Each agency has its own GIS (government information system) and data center which do not talk to each other. ICT adoption in the government is extremely low and fragmented,” he revealed.

XMG, though, is not expecting any major leaps in this area this year. Hall said: “However, if the new Aquino government follows its stated plan, we anticipate a slow progression from more use of IT in government departments to true e-government applications during this presidential term.”

With regard to the country’s postal service, which falls under the domain of the CICT, Uy said reforms are underway to transform post offices across the Philippines into self-sustaining community e-centers.

He noted that the Philippine Postal incurred losses totaling 300 million pesos (US$6.8 million) last year. “We need to fix this and install a new business model.”

Beyond the government sector, XMG said the Philippines can expect to see IT developments in other areas including social networking, consumer electronics, green IT, cloud computing and software development.

According to Hall, social networking activities in the country will see continued growth through 2011 and beyond. “Facebook and Twitter are taking market [share] from SMS,” he said. “Like e-mail and the mobile phone before, these are culture-changing products and we have not seen their full potential yet.”

“Expect more developments for use of social networking in business, but also expect higher levels of advertising, spam or its equivalent, viruses and other intrusions,” he added.

XMG also expects tablets to claim its ascendancy in the gadget race.

“Most major manufacturers are due to release their first models in first-quarter 2011, while Apple is due to announce iPad 2,” Hall said. “With the rise of the middle-class and tech-savvy Gen X and Gen Y Filipinos, expect to see these gadgets in local coffee shop. With a wide range of devices and operating systems, there will be no leader but expect Apple to remain strong, followed by Samsung and RIM.”

Elaborating on cloud adoption, the XMG analyst said IT vendors are expected to grow their enterprise offerings through the public cloud. “However, we do not anticipate well-established companies with significant investment in IT to [migrate] their ERP systems or legacy applications just yet in 2011,” Hall noted.

He said enterprises will need new software that built to be deployed on the cloud as legacy systems are not designed for such implementation.

He also pointed to green IT as a growth area for the Philippines as high utility costs in the country make a good case for the deployment of energy-efficient hardware and virtualized servers.

“The adoption of green IT practices will increase, albeit slowly, over the next 12 months primarily due to newer hardware refreshes,” Hall said. “Unlike other green-conscious economies such as Singapore and Korea, businesses and industries in the Philippines must still collectively make a commitment to saving the environment and reducing carbon emission footprint generated by technology.”

Source:http://www.zdnetasia.com/bpo-to-take-philippines-to-higher-ground-62206416.htm

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