Recently I was in Manila for the Contact Center Association of Philippines (CCAP) annual industry event, which also marked the CCAP’s 10-year anniversary. There was a great deal of enthusiasm about Philippines having reached an important milestone of becoming the world’s leading voice BPO destination. Prominent industry and political speakers emphasized the fact that Philippines had achieved this distinction on the back of a vibrant ecosystem, a natural affinity toward the services and customers in play, and the significant attention the industry is enjoying relative to the political and economic quarters. One of the eminent presenters summarized the upbeat mood by stating that Filipinos had demonstrated that it is possible to be nice and still win!
The celebrations were well-deserved. The Philippines IT/BPO industry has grown at a healthy clip of ~30 percent annually over the past five years to reach ~US$9 billion in revenues, and is a significant contributor to the country’s GDP, direct and indirect employment, and foreign exchange earnings. Additionally, the industry has catalyzed growth of multiple next-wave cities in the provinces, attracting local talent, entrepreneurs, and governments to participate in the overall economic upswing. Multiple factors, including availability of a robust English-speaking talent pool, relatively neutral accent, cultural similarity with the United States, and a competitive cost environment have contributed to this success.
Yet, one must question whether this success is sustainable and what lies ahead for the industry in the years to come. The global services phenomenon has certainly spawned a new generation of competing destinations beyond India and Philippines. While locations such as China derive strength from regional and domestic market scale and capabilities, countries in Africa are witnessing a significant government-backed push to target the relatively lesser tapped UK and European markets. Other countries such as those in Eastern Europe and Central/Latin America are establishing themselves as the preferred nearshore destinations for Europe and North America, respectively. While it is important for Philippines to protect and enhance its position in the existing strongholds, the competition will be more apparent in the comparatively new markets such as the UK, continental Europe, and Asia Pacific, and in service segments such as non-voice and industry-specific BPO services.
So what must Philippines do to ensure continued growth and success in the emerging global services landscape? Investments in talent capacity and quality are required to meet the industry’s projected entry-level workforce requirements, as are development of specific domain expertise and a steady pool of management/ leadership. The industry’s expansion into next-wave cities needs to be strengthened through adequate physical/social infrastructure development and local government stewardship. Finally, the industry’s stated agenda of further diversification into newer markets and service lines must be supported through renewed and targeted marketing and communication initiatives.
The Philippines IT/BPO industry has set itself an ambitious 20 percent annual growth target over the next five years. Achieving this will require Philippines to proactively shape its destiny and profile, recognizing evolving customer expectations and competitor capabilities. Will there be any surprises?
