BPO Philippines – The future of outsourcing

MANILA, Philippines — Business process outsourcing (BPO) to the Philippines has evolved since its early beginnings. In just two short decades, the Philippines has emerged as the world’s largest—and leading—contact center outsourcing destination.

The BPO sector in the country currently employs more than 1.3 million Filipinos and is expected to generate more than $29 billion by the end of 2022. Initially, BPO services focused primarily on providing cost containment and the ability to scale. The focus has now shifted to delivering excellent customer experience (CX), but the future will look very different for many reasons.

Technology has disrupted business processes and workflows in ways not anticipated even a decade ago. The future of the BPO industry in the Philippines is much like that of other industries, such as healthcare and education. There will inevitably be job losses due to automation and the continued application of Artificial Intelligence (AI). With technology taking on an increased role, almost all simple and highly repetitive tasks, currently being handled by agents in the outsourcing sector, will soon be handled by AI.

“In the next two to five years, these ongoing technological advancements will reshape the outsourcing industry in the Philippines and around the world. This will be a challenge, but if history is any indicator, the Philippines BPO industry can be expected to rise to the occasion,” Ralf Ellspermann, CEO of PITON-Global, a leading mid-sized BPO in the Philippines, says.

BPOs in the Philippines are able to provide value in areas that cannot be automated. It’s important to recognize where humans add value; often these are tasks that require empathy and active listening. “Hence, the importance of delivering quality customer experiences. This means that BPO providers must become experts in understanding what customers want, and how to apply technology for optimum results,” Ellspermann says.

“One of the reasons CX is so important is because R&D investment in AI continues to skyrocket. Major players like Google, Microsoft, Facebook, and IBM are all investing heavily in AI. The results are showing up in the form of self-driving cars, better web search, more effective cancer diagnosis, and improved customer service. BPO providers in the Philippines must invest in CX to remain competitive or face extinction,” he continues.

It’s already happening in most industries where companies that don’t adapt quickly find themselves without customers. CX will be perhaps the most important factor for future growth in outsourcing transactions, and providers that fail to invest in this area risk being left behind.

More complex and higher value tasks also will still need to be processed by humans in the foreseeable future. But these, of course, require a much smaller number of agents. This explains why the country’s leading BPO vendors are not just investing in technology but also actively developing their people, with a focus on digital literacy and customer experience.

“No doubt offshore BPO to the Philippines will continue, but the type of processes and the sheer volume of them will transform. To remain competitive, the country will need to reimagine its role in the global marketplace and continue to upskill its BPO workforce,” Ellspermann explains.

The BPO industry in the Philippines has some key advantages over other outsourcing destinations. Low cost of labor, an English-proficient and highly educated workforce, as well as cutting-edge technology and infrastructure, are strengths that will continue to give the country an edge in the future. These are highly valued attributes to the world’s largest companies in places like the US, Australia and the UK that rely on outsourcing.

“The future of BPO for the Philippines is exciting and auspicious, however, it will require considerable investment, time and effort as well as determining ways to specialize in higher-value services to make this vision a reality.

The country is already in a prime position to diversify its outsourcing services, making it a natural choice for companies looking to enter this market. This will factor into the Philippines playing a vital role in maintaining BPO’s position as a leading CX provider. In short, it’s about combining the best people, processes and technologies to deliver a truly world-class CX,” Ellspermann ends.