Who would ever thought that such a country which boasts of its wonderful natural resources would become a global leader in the current business trend today?
Yes, it is true. Despite of its economic instability, the Philippines has opened its market for business process outsourcing and is now regarded as one of the two global leaders in this industry, alongside India. In outsourcing industry, it joins four other Southeast Asian countries in the top 15, according to the Global Location Services Index of 2005.
But what is business process outsourcing anyway? Business process outsourcing, known as BPO, was regarded as one of the fastest growing industries in the world. It is the ascendancy of technology or expert process providers to supply and regulate a segment of business processes and functions. It means that part of business tasks of the outsourcer is transferred to a third party. BPOs exist in different forms such as accounting and payroll outsourcing, medical transcription industry, call centers, animation and human resources.
In 2002, the BPO industry employed about 2400 Filipinos, bringing in revenues of US$24 million. Just three years after, the industry grew rapidly and its revenues increased to US$1.12 billion, providing jobs for about 112 000 employees.
At present, the Philippines is regarded as the most competitive adversary of India in the global call center market. A Michigan-based company, Kelly Services, Inc. stated that US companies now prefer Philippines than India in offshore backroom operations. This is largely because aside from being a former US colony, the Philippines and the American education system are so much alike which includes comprehensive English language studies, giving Filipinos a neutral American accent. On the other hand, India currently faces criticisms due to their British accent, a barrier in dealing with American customers.
Likewise, in other BPO industries, the country still excels. This is mainly because of Filipinos’ proficiency in English and Spanish. Also, among all Asian countries, the Philippines has the greatest number of accredited accountants which are acclaimed for their adaptability in multiple accounting standards.
Many studies showed that Philippines have great potential in global leadership when it comes to BPO. The neoIT’s 2005 Mapping Offshore Markets Update ranked Philippines as the third in the world for top BPO destinations. In 2004, the country was cited by the Philippines’ Center for International Trade Expositions and Missions as among the 10 global leaders in offshore operations. AOL, Chevron, Dell, HP, IBM, Intel and Motorola are among the multinational companies that already operate offshore operations in the Philippines.
These substantial developments in the BPO industry prove that the country has not made a mistake in opening their market for global outsourcing. As the Philippines exhibits a world-class, powerful workforce, this “established success story”, as stated by the Kearney 2004 Attractiveness Index , is likely to continue in years to come.