Sunday, April 15, 2007

$10-Billion Philippine Outsourcing Industry Target

Back office end jobs are one of the most-juicy services being cooked in the Outsourcing Industry these days. In line to the growing industry’s needs for the said type of service to provide, the Philippine government is planning to tap Filipino managers based in the United States to convince American companies to outsource their back office needs here in the Philippines. The government is also offering to give the said Filipino outsourcing executives some financial incentives they call as “finder’s fee”.

According to Mr, George Kintanar, adviser of the Philipppine House of Representative’s committee on ICT (Information and Communications Technology), they are confident and optimistic at the same time and talked about the plan before some local government officials and private businessmen at a press conference announcing about the intentions of the government in the “1st ICT CaLaBaRZon Conference” last June 29-30 at the Tagaytay International Convention Center (TICC). The plan is expected to be implemented by the Fil-Am executives, Overseas Filipino Workers (OFW) in the U.S. and the Philippine Chamber of Commerce and Industry (PCCI) in hopes to boost up the Outsourcing Industry and to introduce it in the Philippines as a new revenue and income generating field for the many IT professionals that continues to abound by the numbers each year. The Philippine government calls this move as the “overseas global outsourcing” marketing strategy.

The plan is also targeting small and medium enterprise (SME) entrepreneurs hoping to be adopted by the 99% - population that SME’s represent in all the businesses present in the country. Encouraging them to open up and start at a 30 or 50 - seater call center and to later on encourage Fil-Ams to do overseas global outsourcing and be able to tap a portion of the 50 % - population that the U.S. is occupying in the global outsourcing market.

Some figures appeared in another article stating that by the year 2010, the Philippines is expected to earn a significant $10 billion revenue through the outsourcing industry alone (according to outsourcing world). Another report by the Mc Kinsey Quarterly, states that the demand for global outsourcing services is expected to reach $180 billion by the year 2010 and 5% of that market is being targeted by the Philippines which is a clear $10 billion industry by 2010 from a short figure of $1.5 billion only in 2004.

One great effect of the globalization brought about by the outsourcing industry alone is the increasing number in terms of contact centers recruitment that has rapidly grown over the past five years. In the animation field alone, skilled professionals are targeted to be trained amounting to 25,000 new industry-ready animators by 2010 to meet the growing need for global outsourced animation services requirements. This data is according to the Animation Council of the Philippines Inc.(ACPI) director Joy Bacon. Increased tapping of the many IT professionals through outsourcing in the Philippines can be attributed to the “better people, better business climate, competitive workforce, in-line infrastructure, virtual cost-effectiveness, better English proficiency and most of all, better security” compared to other outsourcing hubs like India , China and other Asian Countries. According also to Chalr’e Associates (an executive search and management consulting firm in the emerging countries in Asia Pacific), “a growing number of companies continue to bank on the country’s reputation for high-quality and cost-effective services.

Proof of this quotes are the significant increase in the presence and investment efforts by large companies like the computer manufacturer Dell Inc. They had set-up thier own contact center in the Philippines unlike before where Dell has only outsourced services to the country as third party providers for years. They have finally decided and dedicated to make the Philippines as a global customer service center. General Electric, an aggressive consumer electronics company, meanwhile, also made the move of shifting substantial resources from India to the Philippines and making a hay of promoting their brand in the country.

Quote source: Computerworld Philippines

In addition to the information I provided, the Department of Trade and Industry secretary, Mr. Peter B. Favila also quoted “in terms of potential, business opportunities and realized revenues, we know for a fact that we have only begun to scratch the surface of business process offshoring. There is much room for growth in the industry”.

Also said by the Center for International Trade Expositions and Mission (CITEM) executive director and DTI assistant secretary, Felicitas Agoncillo-Reyes, “As far as the industry is concerned, 2005 has been a great year for the e-services in the Philippines. We would like to think we have increased and strengthened our competitive advantages in terms of the capabilities of our e-services workforce and overall industry cooperation.”

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