Practitioner journals and case studies are full up with comments from senior corporate managers all over the world discussing the difficulties of keeping labour costs in line with business processes where needed. Over the past decade, the rise of Business Process Outsourcing (BPO) in the Philippines has responded to these needs and started to provide many managers and leaders with the solutions there were looking for.
In this week’s blog we briefly touch on the BPO industry today in the Philippines and introduce you to some BPO Hotspots in the Philippines that you may not have heard of before. The BPO industry is growing and if we look beyond Manila you will see it’s flourishing.
What is BPO?
BPO refers to ‘a broad range of business outsourcing activity with the end view of improving one’s process’.
Typically BPO involves contracting an external provider to perform a business function or service that was typically performed in-house. Many companies of all sizes are outsourcing many business functions such as voice services using call centres for customer support, data entry, email response-handling, social-media marketing, research, technical support to name a few.
But it’s also expanding, offering a wide range of non-voice services. BPO also includes legal and medical transcription; software development and animation; human resources (payroll); finance & accounting; statistics and forecasting services among others.
Why is the BPO Industry in the Philippines growing so rapidly?
According to the Information Technology and Business Process Association of the Philippines, the Philippine information technology and business process management industry employed 776,794 people at the end of 2012, wherein it added 137,066 new jobs. This new intake reflects 21 percent growth from 2011.
We can put this down to numerous reasons: namely lower labour costs; a highly Westernized culture; a high command of the English language and understanding; the hospitable nature of the people; strong government support; a variety of tax incentives; a robust IT infrastructure; an abundant highly skilled and trainable workforce; its strategic location between the East and the West; an expat-friendly lifestyle; and a proven track record of delivering low-cost, high-quality business support services.
You have probably heard of Manila and Cebu, both of which rank in the top 20 Outsourcing destinations in the world. But did you know that according to Tholons (2014) Top 100 Outsourcing destination, there are several other cities in the Philippines that made the list.
The growing trend of other cities growing in the BPO industry has been encouraged by the government initiate program the next-wave cities.
Next Wave Cities (NWCs) are ICT hubs specially built and developed beyond Manila, based on criteria such as worker supply, telecom infrastructure and other factors necessary to sustain a local BPO industry. The target for 2016 is for 20 cities around the country to be employing 20,000 people.
As of 2012, four major hubs emerged for IT-BPM services: Metro Manila, Metro Cebu, Metro Clark, and Bacolod City. The top-ten NWCs for 2012 in alphabetical order: Baguio City, Davao City, Dumaguete City, Iloilo City, Lipa City, Metro Bulacan (Baliuag, Calumpit, Malolos City, Marilao, and Meycauayan City), Metro Cavite (Bacoor City, Dasmariñas City, and Imus City), Metro Laguna (Calamba City, Los Baños, and Sta. Rosa City), Metro Naga (Naga City and Pili), and Metro Rizal (Antipolo City, Cainta, and Taytay).
With the support of new wave cities and government initiatives, hot spots in the Philippines are multiplying offering more opportunities for businesses to improve their services and therefore the bottom line. For more information visit www.ibpap.org/