Business process outsourcing in the Philippines

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Business process outsourcing or BPO is an emerging industry in the Philippines. This industry was regarded as one of the fastest growing industries in the world. The BPO boom is led by demand for offshore call centers. It is estimated that 112,000 people were working in call centers in the Philippines in 2005, bringing in revenues of US$1.12 billion for the year. This is a sharp increase from 2000 when call centers employed 2400 people and earned US$24 million. Overall, Philippine BPO is forecasted to earn US$13 billion for the year 2010.

This emerging industry in the Philippines is fueled mostly by customer care, medical transcription, software development, animation, and shared services. Though customer care call centers form the largest part of the BPO boom locally, the Philippines' language proficient information technology, human resource, and finance/accounting professionals are significant contributing factors as well. The proficiency of many Filipinos in English is a major factor in the growth of BPO in the Philippines.

The Philippines has the largest number of accredited accountants in Asia, with the number growing yearly.

Areas such as Baguio City, Bacolod City, Cagayan de Oro, Cebu City, Clark, Dagupan City, Davao City, Dumaguete City, and Iloilo City are being developed for offshore operations.

The Philippines' Center for International Trade Expositions and Missions (CITEM) report for 2004 cited the Philippines as among the top 10 choices for offshore operations. Major companies that already operate in the Philippines include AIG, AOL, Barnes & Noble, Chevron, Citigroup, Dell, HP, HSBC, IBM, Intel, JPMorgan Chase, Motorola, Procter & Gamble, and Trend Micro. Notable BPO vendors include Accenture, Convergys, PeopleSupport, and Unisys.

A survey by Kelly Services, Inc. based in Michigan, showed that India is no longer the first choice of U.S. companies looking to set up their offshore backroom operations. The study cited companies eyeing the Philippines as the better site due to quality^{[citation needed]}. Filipinos enjoy a comparative advantage over American workers for two reasons. First, labor costs in the Philippines (with a minimum wage of approx $7 per day) are a fraction of those in the United States. Second, most BPO workers in the Philippines are college graduates. Many overseas labor sourcers also prefer Filipinos over Indians when it comes to customer support and customer interaction due to Filipinos' relative ease and familiarity with American culture and U.S. slang.

1 Call centers
2 Legal and medical transcription
3 Finance, logistics and accounting
4 Animation
5 See also
6 References
7 Links

[edit] Call centers

Main article: Call center industry in the Philippines

The Philippines is considered as the most serious rival to India in the global BPO market. This is because as a former American colony, the country's education system is patterned after the American education system and this includes American-style diction and pronunciation of the English language. This gives Filipino-English a neutral or an almost American accent, an advantage in dealing with the mostly American clientele. By contrast, while an emerging IT powerhouse, India's call center industry is criticized for having a language barrier due to the fact that Indians (as a former British colony) are educated in British-style English which is compounded by the heavy Indian accent. In 2005, the country ranked 3rd in the world for top BPO destinations, according to neoIT's 2005 Mapping Offshore Markets Update.

[edit] Legal and medical transcription

These companies do mostly medical reports, discharge summaries, operative reports, therapy/rehabilitation notes, chart notes, and hospital and clinic reports using state-of-the-art software and equipment from the U.S. They can transcribe up to 1,000 lines per medical transcriptionist per day at a 98% average accuracy rate, and they conduct training programs for their transcriptionists to continuously upgrade their performance. Most of them offer 24x7 services and have an average turnaround time of 24 hours, with the ability to deliver output in 3 to 6 hours in emergency cases.

The industry is now in the process of pursuing certification for individual companies’ services to further promote the country’s capabilities in this area. An industry alliance is also now being forged to ensure the sector’s continued growth in partnership with the government. Inclusion of medical transcription subjects in medical courses is likewise being pushed, to further expand the country’s pool of skilled medical transcriptionists.

[edit] Finance, logistics and accounting

The Philippines is fast becoming a regional and global hub for shared corporate backroom operations, especially for financial services such as accounting and bookkeeping, account maintenance, accounts receivable collection, accounts payable administration, payroll processing, asset management, financial analysis and auditing, management consulting, inventory control and purchasing, expense and revenue reporting, financial reporting, tax reporting, and other finance-related services such as financial leasing, credit card administration, factoring and stock brokering; as well as for logistics management, and cargo shipment management.

Accounting primarily for these companies’ choice of the Philippines as the location for their shared backroom operations is the country’s rich pool of low-cost yet English- and IT-proficient business, accounting, HRM and engineering graduates. Moreover, the World Competitiveness Report 2001 ranked the Philippines 16th of 49 countries for “International Business Experience.” These professionals are also particularly noteworthy for their marked customer service orientation, superior work ethic, high degree of trainability, flexibility, multicultural adaptability, and loyalty. Rounding up the Philippines’ advantages as a BPO destination are its strategic location, the availability of prime yet low-cost real estate in the country, its good and increasingly cost-competitive telecommunications and other business infrastructure, its expatriate-agreeable lifestyle, and its progressively IT-supportive policies and incentives.

[edit] Animation

Filipino animators do well in the global market for animation, which is fast growing due to the increasing popularity of animation as an entertainment medium not just for free and cable TV and the movies but also for computer games, as well as an advertising medium, a graphics medium for Internet content, and an information and educational tool.

Their services range from full 2D and 3D animation, including pre- and post-production services such as layouting, in-betweening, clean-up, digital background production through scanning and pre-compositing, color styling, special effects creation, and digital ink and paint application, to flash animation and web design, graphic and art design, mobile applications, and art and animation training.