DALLAS ─ The Philippines, whose offshore market has grown 46 percent annually since 2004, is poised to emerge as a leading destination for non-voice Business Process Outsourcing (BPO) work for buyers looking beyond India to grow their offshoring footprint, according to the Everest Research Institute. The US$35 billion global BPO market has an addressable opportunity of $220-280 billion by 2012, with 90 percent of the addressable opportunity in non-voice work.
Although a number of providers are leveraging the Philippines for a vast scope of non-voice functions, there is limited awareness of the Philippines’ capability in non-voice services, which has grown significantly over the past three years, according to the Institute’s study, The Silent Knight: The Philippines’ Emerging Non-Voice BPO Capability. The study includes contributions from the Business Processing Association of the Philippines (BPAP). The US$6.8 billion Philippines offshore market employs more than 450,000 people for mostly voice-based services.
“Success in voice-based BPO services has positioned the Philippines as the second largest low-cost BPO destination after India, and both countries combined account for 50 percent of the BPO market in revenue terms,” said Nikhil Rajpal, Principal, Everest Research Institute. “While some providers are leveraging the Philippines for non-voice functions, the scale of work is relatively low. However, tremendous market potential exists if service providers can successfully manage talent-related constraints.”
Other study insights include:
- Most current activity and scale in non-voice BPO is concentrated on transactional services, such as finance and accounting and medical transcription.
- Judgment-intensive services, such as research, analytics and legal services, are being performed, although scale and maturity are low.
- Multiple suppliers and multi-national captives have expanded their service portfolios in the Philippines to include multiple non-voice BPO services in addition to voice-based BPO services, although the scale of operations in non-voice is low.
- The Filipino government is focused on development of the non-voice BPO industry, providing incentive programs to attract investors as well as providing grants and infrastructure developments.
“Managing talent-related constraints, especially the availability of specialized and managerial skills, will determine operational success in the Philippines,” said Jimit Arora, Research Director. “We expect strong growth to continue in the non-voice services sector, especially in the transactional services space. However, these constraints suggest the Philippines is not likely to replace India as the nerve center for the sourcing and management of services for many organizations.”
Other Institute Global Sourcing (GS) studies providing additional insights into the offshore market: