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BSIT III
By Wilma C. Inventor-Miranda
Among the predictions for outsourcing in 2017, what stands out and seem the most common is the
uncertainty hanging over the industry. This uncertainty is traced to the victory of Donald J. Trump at the
US elections and the victory of the leave-the-European Union movement or Brexit. With this uncertainty,
outsourcing contracts between provider and client or buyer will likely be more flexible. For instance,
contracts will be more short term, with provisions for early termination in case of a pullout of the
outsourcing agreement.
It helps to analyze the results of outsourcing activities in 2016 so as to reasonably predict what will
happen in 2017. In a KPMG report, titled Global IT-BPO Outsourcing Deals Analysis, 64.7 percent of
total outsourcing services contracts came from the United States, followed by the United Kingdom at 9.2
percent, with Australia and France being two other key outsourcing markets.
I was also surprised that the top consumers of information technologybusiness process outsourcing
services were government and defense entities, contributing 55 percent and 13 percent of outsourcing
deals signed in 2016, respectively. The telecom sector was the next biggest contributor in terms of
contract value. Last year was not also as strong as 2015, with annualized contract value of only
$21.3million compared to $43.5 million in 2015, or a decline by 51 percent. This decline happened even
I should say the Philippines should prepare for this period of uncertainty in the industry. While the country
compared to the rest of Asean should not experience a decline in output or the GDP no matter Trumps
victory, that is because an infrastructure buildup this year were to compensate for the expected slack. In
In the outsourcing sector, however, many contracts may be put on hold or renewed under more flexible
terms, pending a more stable environment and more firm economic policies in the United States.
Moreover, one of the predictions this year is that call centers will likely become extinct as self-service
tools and intelligent assistants, like virtual agents and chat bots, become more popular. According to
CIO.com in its seven top predictions for 2017, call centers will be replaced by the rise of tech-enabled
contact centers. The web site quoted Anna Frazetto, chief digital technology officer and senior vice
The article also quoted Everest Groups Rajesh Ranjan, who said that in 2017 customers will rationalize
The Philippines, being the No. 1 call-center services provider globally, should be prepared for this risk. It
can remain the top provider and strategic partner for customers so long as it upgrades its technology,
The IT outsourcing sector, being the top provider in 2016, can remain the dominant outsourcing services
in 2017, although India is still the top provider in this sector. The Philippines can diversify and improve its
IT outsourcing services and other areas of outsourcing, like finance and accounting outsourcing and
knowledge-process outsourcing, the latter together with BPO bundled service as key contributors to BPO
deals in the fourth quarter last year, according to the KPMG study.
We have so much potential in the outsourcing sector but we have to manage the risks and strategize so
that we do not rely on only one area, such as call centers, but prepared to grab other opportunities that
are out there. We need to prepare our people with the appropriate skills and arm ourselves with the
needed technology so we remain competitive in the outsourcing arena and still be the top destination for
BPO services.
Wilma Miranda is the managing partner of Inventor, Miranda & Associates-CPAs, treasurer of KPS
Outsourcing Inc. The opinions expressed herein are the views of the writer and do not necessarily reflect
Some of the back office jobs that are being outsourced are the following:
Human Resource Recruitment
Accounting and Finance Services
Data Encoding and Data Processing
Support Desks
As you can see, these jobs require technical and particular skill sets to be able to perform the tasks
expertly.
Companies Need To Use It
With the growing demand to be globally competitive, companies need to cut their operational costs. More
often, companies are hesitant to outsource their back office jobs because of perceived loss in operational
management.
This is true with traditional outsourcing.We at MicroSourcing have a solution for this: Managed
Operations.
MicroSourcing makes it possible for your organization to have its own operations in the Philippines by
way of a unique alternative which delivers the ideal middle ground between outsourcing and starting your
own company in the Philippines.
To illustrate:
With this setup, you have your own dedicated team thats located remotely. You can even set their
working hours to coincide with yours or 4-6 hours ahead. That way, your company is literally working
while you sleep.As a company, before you start back office outsourcing it is a must that you a have a
solid plan about what your goals are. Is it scalable growth? Is it setting up a permanent team offshore?
Whatever your goals are it is important to partner with the right team that will help you achieve your
objectives.Talk to our experts and openly discuss how MicroSourcing will provide top notch services for
your back office processes.
Call centers
DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated March 31, 2017
Our largely American BPO industry is apparently on a roll. The BPO sector is expected to generate $40
billion in revenues, 7.6 million direct and indirect jobs, 500,000 jobs outside of the National Capital
Region, and cover 15 percent of the total global outsourcing market by the end of 2022.
Thats according to the industry road map. But right now, many new investments are on a wait and see
mode. Worries about what Presidents Trump and Duterte would do have made investors take a breather
until things become clearer.
Apparently, President Duterte really spooked some of the big players when he picked a verbal fight with
the former US ambassador and with President Obama as well. The American executives were shocked
with the strong anti American rhetoric of President Duterte and became worried with what that means for
American investments here.
Then Donald Trump got elected US president. He also had bold and disturbing plans about a border tax
that would reduce the economic justification for outsourcing jobs abroad.
Were it not for Duterte and Trump, industry players have been raring to pour in more investments to
increase our footprint in the BPO world market.
Apparently, they really like Filipino BPO workers. An expat executive who has set up BPO operations in
many foreign countries including China, India and the Philippines only had good words about our people
and our country in his blog.
I spent a lot of time in Manila and I think I can pretty confidently say Filipinos are the friendliest bunch of
people youll meet anywhere. Their English language skills are also exceptional, courtesy of a long history
of American settlement. You have zero problems being understood and conversing openly anywhere in
the capital and the same goes for discussions with outsourcing vendors.
One thing Ive noticed in Australia over recent years is a really clear shift to the Philippines for call
centers where previously youd have been speaking to someone in India I suspect it is a combination of
their strong English skills, friendly dispositions and emerging tech sector thats driven the shift
Cost wise, the Philippines was consistently lower certainly than China and regularly than India too. The
economics of each of those countries mean it will likely stay that way for some time too.
Last Tuesday, I met Craig Reines, the guy who runs the Sitel operations in the Philippines, at the EDSA
Plaza Tuesday Club. I first met him last year and from our conversation, he remains bullish as ever about
the Philippines as a call center haven.
Craig isnt too worried about Trump or Duterte and apparently, neither is his company. Sitel just
inaugurated its fourth customer experience center in Baguio, its 13th nationwide. And from his
enthusiasm, it seems they are just getting started.
Sitel started operating in the Philippines in 2000 and was among the first to venture out of Manila by
opening centers in Baguio 13 years ago. Craig, in his speech during the Baguio inauguration, said
Sitel Philippines grew rapidly from 2015 and 2016, averaging 30 percent year-on-year.
In the last 18 months, Sitel has added seat capacity and jobs within Pasig City, Quezon City and
Mandaluyong City, but we are most proud of the significant new capacity investments in new provincial
centers such as Tarlac and Palawan, along with this beautiful new 4th facility in Baguio.
I remember Craig being very enthusiastic about Palawan when I last talked with him. He was impressed
with graduates of the Palawan State University who were working in a hotel in Coron when he was on a
family vacation there. I guess that led to the Sitel center in Palawan.
Craig explains that it makes sense for BPOs to start moving out of crowded Metro Manila and help boost
job opportunities in the regions. The presence of schools and universities in key regional cities means
there are qualified trainable people they could hire at better rates.
Craig proudly pointed out, Sitel is the undisputed leader in inclusive, provincial growth for our industry. It
all started right here in Baguio City, and the phenomenal performance of our Sitel employees creating
highly reference-able, international client success stories is what set our company and our industry on
the exciting path to develop our nation and bring high quality jobs closer to where people live.
Craig said the goal of the industry roadmap to create 600,000 IT-BPM jobs nationwide is possible only if
they start moving out to the provinces. Sitel Philippines now has 23,000 employees nationwide.
Craig knows how it is to be a pioneer in the industry. He helped establish one of the early call centers
in Cape Town, South Africa before his assignment to the Philippines. He knows all about being mindful of
cultural differences and how to adjust to local cultural norms.
In his speech during the Baguio inauguration, Craig focused on the economic contributions of
his industry. Taking Baguio as an example, Craig said Sitels investment has generated many direct jobs
in this community but also over 30,000 indirect jobs in Baguio City.
The World Bank says for every peso generated, 16 times that is created in economic activity. The
economic impact starting with our first investment 13 years ago in Baguio City has led to additional
investments by Sitel and many firms, further increasing disposable incomes, increased tourism, etc. and
we estimate this to be an astonishing P75 billion or over $1.5B.
Well, the industry is one of only two legs of the Philippine economy, the OFWs being the other leg. The
BPO industry is expected to overtake the OFW contribution soon. Craig sees the fears generated by
Duterte and Trump merely as momentary concerns.
A senior economist of the ING Bank in Manila agrees. In a press briefing last January on the banks
global economic outlook, Joey Cuyegkeng said We think both OFW remittances and the outsourcing
sector will continue grow. But by 2018, revenues from the outsourcing sector will outstrip revenues from
OFW remittances.
Mr. Cuyegkeng concedes there will be a wait and see stance on BPO investments, but he thinks theyll
reassess once the US administration comes up with their programs that can affect the sector.
Both presidents will in time see the value of what the industry is doing for their US and other clients as
well as for the economies of the two countries. I share Craigs view that those who will make bold
expansion decisions now will benefit as soon as the political drama of the two presidents wind down.
REFERENCE :
http://www.businessmirror.com.ph/philippine-outsourcing-in-2017/
https://www.microsourcing.com/blog/201704/
https://www.microsourcing.com/news/