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Local BPO can grow to $100-B industry—execs

Posted on: October 19, 2009

Local BPO can grow to $100-B industry—execs

By Anna Valmero
INQUIRER.net
First Posted 13:48:00 10/19/2009

Filed Under: Technology (general), business process outsourcing (BPO)

MANILA, Philippines – The Philippines business process outsourcing industry (BPO) can raise revenues of up to $100 billion by 2020 by properly developing the talent pool and increasing the value chain of services, Indian outsourcing officials said on Monday.

Doctor Ganesh Natarajan India’s Zensar, Technologies vice chairman and chief executive, said the Philippines has a lot of potential to get a bigger slice of the BPO market, which was expected to grow at $1.5 trillion in the next 10 years – if the country would continue to “match its BPO personnel skills to industry demands.”

Natarajan said the Philippines, which ranks second in the global BPO space, should move up the value chain from voice and contact centers to knowledge process outsourcing services that entail analytical and logical products.

Natarajan said India was eyeing growth from $200 billion to $300 billion by 2020, from the current $70 billion “by expanding into 42 new outsourcing cities from the present seven key sites and developing its BPO labor force and its technology infrastructure aggressively.”

Another Indian outsourcing expert, Global Talent Track chief executive Dr. Uma Ganesh said “changes in the methodology of talent development” through technology and special skill sets were keys to achieve this $100 billion growth target.

Ganesh said although the Philippines’ BPO labor force was incomparable to that of India in terms of scale or number of employees, the labor population was not a “stumbling block” for growth once the country’s outsourcing personnel got additional skills for outsourcing to grow into and dominate a specific market niche.

“Population is not a stumbling block provided that the Filipino BPO players develop their talent by adding relevant management, analytical and logical skills so they can move up the value chain. Also, realizing a niche market that best fits the products delivered by Filipino-run BPOs is crucial for the Philippines to gain more of the market share,” said Ganesh.

“In India, there is a strong partnership between the academe, BPO players and the government in developing curriculum for the BPO employees and encouraging them to take parallel courses to develop their management, analytical and logical skills. I think that can be replicated in the country,” said Ganesh.

Being strategically located in Asia is another advantage of the Philippines to succeed in the BPO space so partnering with other countries like India and China is essential – to share best practices and business opportunities, she said.

Business Processing Association of the Philippines (BPAP) chief executive Oscar Sanez welcomed the growth forecast and said the Philippines was “on track” to meet this.

BPAP is the umbrella organization for knowledge outsourcing firms in the Philippines.

By year-end, the local BPO industry, which has over 400,000 personnel, is poised to grow 23 percent by year-end with revenues between $7.2 billion to $7.5 billion., Sanez said.

“The BPO industry is still a sunshine industry in the country with between 30-40 percent growth and by year-end we eye a conservative growth of 23 percent with revenues of about $7.2 billion to $7.5 billion. The forecast of these analysts reflect that the BPO industry is really astounding in numbers and we believe with the development of talent and infrastructures, we will become a $100 billion industry by 2020,” said Sanez.

‘Strong second’

Jonathan De Luzuriaga, BPAP executive director for industry affairs, told INQUIRER.net that industry players in the country should address challenges such as resiliency and business continuity, recalibration and development of talent pool and continuous quality service to leverage its position as the second top destination for outsourcing services.

“Sustaining quality through IT talent development to go up the value-chain is imperative for the country to have a strong number two position. While we may not compete and compare to top BPO destination India because we have significant difference in terms of scale of employees, we should compete with ourselves – develop skills, promote quality services and craft ‘zero downtime’ in operations despite natural calamities,” said De Luzuriaga.

When tropical storm Ondoy and typhoon Pepeng hit the country, only four companies with sites in flood-hit areas such as Pasig and Marikina were affected in operations – but their contingency plans put in place, these companies delivered services without interruptions via their other sites.

In the next two years, BPAP is grooming 50 next-wave cities such as Cebu, Iloilo and Davao City to create about one million BPO jobs nationwide with revenues between $11 billion to $13 billion in revenues, said De Luzuriaga.

BPAP extended its “Roadmap 2010 plan” to develop the country’s 50 next-wave cities for BPO services as the group forms an industry quality council.

Int’l BPO summit

To further strengthen the country’s second lead in the BPO space, BPAP will host the first International Outsourcing Summit to discuss with global delegates the challenges and opportunities affecting the outsourcing industry.

Highlights of the event include plenary sessions featuring experts and top executives from global ICT and BPO firms, and panels on the future of outsourcing, talent development for outsourcing service creating a high-performance BPO organization.

The event will be held on October 21-22. For more information, visit http://www.internationaloutsourcingsummit.com

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