Airline sector seen to offer plenty of outsourcing opportunities

Philippine-based software development outsourcing player Pointwest Technologies said yesterday that the airline industry offers tremendous opportunities for outsourced services.

According to Ma. Cristina Coronel, president of Pointwest Technologies, "the business outlook for the airline and travel industry is looking up. With our deep domain knowledge and wide international customer base, the Philippines is well positioned to be a leading outsourcing partner of choice in the airline industry of countries like Japan."

Revenue accounting in the global airline business is a good candidate for outsourcing with an estimated total market potential of around $700 million over the next few years.

As a result, analysts expect large-scale offshore movement of customer service and mid-office accounting.

In Japan, the global market analyst firm IDC forecasts that the key functional business outsourcing market will reach Y1.012.2 billion in 2008 with a compound annual growth rate (CAGR) of 8.8 percent between 2003 and 2008.

The key functional business outsourcing market is divided into human resource, customer care, finance and accounting, and procurement segments.

User companies like airlines have high expectations for using business process outsourcing (BPO) as an option of their business strategies on selection and concentration and cost reduction.

Japan’s market share in outsourced services is expected to reach $120 billion by 2008.

Pointwest is an accredited offshore vendor of Northwest Airlines providing outsourcing solutions to Northwest’s finance management and human resources, marketing, airport operations and website.

"Revenue management is domain knowledge intensive and involves capable IT infrastructure. Customers who have outsourced their revenue accounting function to Pointwest have derived great value," Coronel said.

Pointwest is a global company with over 100 IT professionals and two international offices in the United States.

"The business mission to Japan opens up new markets and opportunities for Philippine BPO companies. Japanese clients will benefit from our large pool of software experts, business process capabilities and global track record," Coronel said.

Pointwest, together with five other software outsourcing companies namely ADTX Systems, Astra (Philippines), Inc., N-Pax Cebu Corp, Tsukiden Software Philippines Group and WeServ Systems Intl. Inc., are attending the Software Development Expo & Conference 2005 (SODEC) in Tokyo Big Sight from June 29 to July 1.

To date, the Philippines is cited as one of the top three outsourcing destination among 25 countries measured in terms of finance according to the A.T. Kearney 2004 Offshore Location Attractiveness Index.

The Philippines was recognized as one of the top 25 most attractive outsourcing destinations for its favorable cost structure (compensation, infrastructure and tax costs) and promising human resources capability.

Trade and Industry Secretary Juan B. Santos said that Philippine firms’ participation in the SODEC would "enable us to better focus our niche in the software development outsourcing market and leverage our existing infrastructure to deliver value to our overseas clients."

The Philippine participation to SODEC was organized by the Center for International Trade Expositions and Missions (CITEM) and the Board of Investments (BOI).