Saturday, June 12, 2010

The Call Center Industry in the Philippines

This industry is regarded as one of the fastest growing industries in the world. International investment consultancy firm McKinsey and Co. predict that the demand from outsourcing services will reach $180 billion in 2010, with the costumer contact services, finance and accounting, and human resource sub-sectors taking up the biggest shares. When it comes to the trend in primary business requirements, expert are seeing a shift from cost effectiveness to skills quality and competence. This development are the more strengthens the Philippines' position as an emerging global leader in the BPO industry (BPAP 2006).

The BPO boom in the philippines is currently led by demand for offshore call center. The Philippines raked in offshore service generating revenues of $ 2.1 billion in 2006, placing third behind India and China and slightly ahead of Malaysia. That's up 62% over the $1.3 billion it gained in 2004, and a huge increase from the start of the decade when the outsourcing industry in Manila employed just 2,400 people and the industry had revenues of merely $24 million. It is estimated that 200,000 people are working in 120 BPO (mostly Contact Center) in the Philippines in 2006. Overall, Philippines BPO is forecasted to earn US$11 billion and employing 900,000 people by the year 2010 (Shameen 2006).

The recent growth spurt in the outsourcing industry in the Philippines has been fueled not by traditional low-value-added call centers but more higher-end outsourcing such as legal sevices, web design, medical transcription, software development, animation, and shared services. Though call centers still form the largest part of the sector, the Philippines has begun leveraging its creative design talent pool of lawyers, and its professionals in acccounting (Shameen 2006).

Majority of the BPO facilities are located in Metro Manila although other regional areas such as Baguio City, Bacolod City, Cagayan De Oro, Cebu City, Clark (Angeles City), Dagupan City, Davao City, Dumaguete City, Lipa City and Ilo-ilo City are now being promoted and developed for offshore operations.

Major companies that already operate in the Philippines include AIG, AOL, Barnes and Noble, Chevron, Citigroup, Dell, HP, HSBC, IBM, Intel, JPMorgan Chase, Motorola, Procter and Gamble, Siemens AG and Trend Micro. Roster of outsourcing clients include NEC Telecom, Caltex, Fujitsu and Alitalia. Notable BPO vendors include Accenture, Convergys, and Unisys. There are numerous smaller operations that either support larger vendors during seasonal demands, or directly service Small and Medium overseas companies. Major vendors are managed jointly by expatriate and local managers whereas smaller operations maintain thier viability through direct management by its owners, who themselves are most likely to be from the BPO and ICT industries. Industry associations include BPO ServicesAssociation (BSA/U) and Business Processing Association of the Philippines (BPA/P). Here are some examples of services provided by call centers in the Philippines.

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