BPO: Aiming for bigger offshore markets

Business process outsourcing (BPO) companies in the country are now looking at clinching possible IT service contracts in Iraq in time for the expected post-war surge in demand for labor and services. In addition, they expect to win more contracts from the United States and Europe as they collectively market the country’s BPO services under one brand.

Outsource Philippines, a private sector-led group of major BPO providers, is scheduled to conduct major roadshows abroad to drum up the strengths of the country in doing inbound and outbound e-services.

"We should not just think of sending construction workers to Iraq after the war. We have knowledge workers who will be needed as Iraqis try to rebuild their country. But what we want more is to bring and do the work here," said Ramon Dimacali, chairman of Outsource Philippines.

Outsource Philippines will coordinate with the Support Iraq Reconstruction Task Force for a chance to get some BPO work from the war-battered country, Dimacali told NetWorks.

Roadshows

In line with marketing the country’s BPO services under the brand "Outsource Philippines," Dimacali will present the country’s outsourcing message and propositions to CEOs in New York this month, in line with the scheduled US visit of President Arroyo. Soon after that, Outsource Philippines will have an audience with CEOs in London, as a result of Dimacali’s meeting with the Lord Mayor of London who visited the country last month.

In June, Outsource Philippines will pitch the same BPO message, and hopes to get positive results from the trips abroad and visits to the Management Association of the Philippines, Information Technology Federation of the Philippines and to the different business chambers and associations.

Ongoing projects

Today, the country has a good number of companies with the experience and capability, certification, scalable supply, speed, methodology and business processes to deliver quality BPO services.

These companies are doing remarkable work for big offshore companies, Dimacali said. For example, Manila’s ASEAN Call Centers has been tapped by Florida-based Broadfield Corp. to perform the sales side of its business. Together they formed ACC USA. The local outfit also conducts telemarketing for a United Kingdom power company to switch providers, telemarketing for specific UK products, and market segmentation surveys.

Another Philippine BPO provider is doing telemarketing for a big telco that wants to market new products (Internet yellow pages) to 23 million SMEs in the US. With 125 Filipino agents going to 400 now, the telemarketing project has netted the US company some $3.6 million in annual savings that encouraged it to extend the project to another year.

A big foreign travel organization has also outsourced its inbound calls to the Philippines for online bookings of airlines, hotel and cars, and for cross-selling of tours and promotions to its international clients. Its Philippine outsourcer takes an average of 10,000 calls daily, handled by 300 Filipino call center agents.

Another successful BPO contract is for a global transport company that wants to reduce IT maintenance to fund bus development. Outsourcing this business process to the Philippines gave the company $6-million annual savings and fewer manpower. The project is now on its eighth year.

In addition, there is the case of NYK Line Japan that outsourced its bill ladings to TDG Philippines to do global data audit (50,000 bills per month), maritime container locator of 400,000 units, and encoding of 100,000 bills of ladings per month. The project resulted in 40 percent cost reduction for NYK, by spending only 30 US cents now from $2 for the performance of such tasks.

Why the Philippines?

Dimacali said independent market researchers now believe that the Philippines can outdo India in delivering BPO due to the country’s stronger asset and cost advantages.

According to a report by Frost & Sullivan, salaries in the Philippines are the third lowest – average monthly rate is $234 – among the countries that provide offshore BPO.

Various industry data also never miss to highlight that the Philippines has a big number of college graduates every year, not just from the IT field but also from the accounting, engineering, education and medical sectors.

Dimacali said these fields represent rich markets for BPO, too. In fact, he said the GAAP in the US acknowledges Filipinos as among the best accountants in the world.

Aside from local talent, Dimacali said the industry can also very well take advantage of the eight million Filipino overseas professionals.

Finally, he pointed to the geographic advantage of the country over India. He said average fly time to major Asian countries from Manila is only 1.5 to three hours, unlike the long nine hours to Bangalore.

China, he added, is not an immediate threat, especially because it has not improved the quality of its services.

The global BPO market is expected to be a $234-billion business by 2005, according to the Gartner Group. It is estimated that of the top 100 companies worldwide, 73 percent have or will avail themselves of BPO.