by: IGlobal Content Creation Team
The Business Process Outsourcing (BPO) Industry is one of the most dynamic and well-paid trade field in the Philippines today.
More than a successful field, the BPO industry proves to be the country’s largest and fastest growing sector. There is no denying its major contribution in providing millions of jobs and encouraging economic activity. New BPO investments are now spilling over Metro Manila.
Inquirer Business reported that there are 1.2 Filipinos working in the BPO industry. According to the report, the BPO industry will contribute US$25 billion to the GDP in 2017. This is the 2nd biggest contribution to the GDP. No. 1 goes to 2.4 million OFWs' US$28.9 billion remittances
However, Joey Cuyegkeng, ING Bank's Manila Senior Economist said contributions from the BPO industry will surpass OFW remittances in 2018. This is possible because BPO revenues grow at an average of 9% compared to 4% from OFW remittances.
The Philippines recently led and hosted the 2017 ASEAN Summit. The 10 leaders attended and signed the ASEAN Integration. The agreement paves the way for stability and economic cooperation in the region. It also helps to generate new jobs in the region. Despite the agreement, the Philippines will keep the BPO industry as its main economic driver.
Philippines, Malaysia, and Indonesia are the most promising BPO destinations in South East Asia. But the Philippines remains to be the most vibrant BPO industry in the region. The Philippines already surpassed India as Call Center Destination in the world. Thanks to increasing investments from local and foreign players.
Of course, the success of BPO industry didn’t happen overnight. Credit goes to the handful of individuals who saw the potential in the business in its early stages. Among them are:
Mr. Rainier Borja, the “man behind the success of the call center and BPO industry” in the country. He also founded and chaired the Information Technology and Business Process Association of the Philippines or IBPAP.
If there is a man responsible for the BPO industry's success, there is definitely a woman behind him. Karen Batungbacal is called the “Mother of the Philippine BPO Industry”. She is also one of the founders of IBPAP. Her pioneering involvement in the BPO Industry started when American Presidents Line asked her to set up its call center in the Philippines. After 5 years, APL wanted her back in the US but she already got married and started a family. She left APL and had a brief stint with Citibank. In 1995, the Lopez Group established BayanTel and made her head of customer service. After BayanTel, she headed SkyCable's customer service.
An epiphany came to her while reading a news report about America Online (AOL). In 1999, AOL built its call center in Clark Pampanga with 500 staffs. She thought that if AOL can build one in the country, why can't companies here service customer support needs of big US companies? She pitched the concept to the board and in 2000 she became the CEO of Customer Contact Center or C-Cubed, the first Filipino-owned and established BPO Company.
And let’s not forget Bill Gates who donated Microsoft Apps Licenses to the PCPS Program. This started the Philippine BPO Industry rolling. Not only did it saved the government from huge expenditures during the early stages, it enabled the BPO industry to function and thrive.
Before, the Philippines was infamous for its domestic helpers and sex workers. Today, the Philippines is synonymous with the Call Center Industry. In 1992, Frank Holz founded the first BPO and set up the first contact center here in the Philippines. Little did he know that this seminal moment would launch a new industry in the country. 1997 saw the first multinational company outsourcing to the Philippines. This further advanced the means of telecommunication and over-the-phone customer services in the country
In 1999, Jim Franke and Derek Holley founded the very first professionally-accepted call center company in the Philippines. Later that year, the country’s gross domestic product (GDP), rose to 0.075%, due to the BPO industry. Though it may have been small at the time, the percentage has risen over the years, with it reaching up to 2.4% in 2005. Today, revenue growth averages 9%.
In 2001, a US-based outsourcing center moved part of their operations to the Philippines. The move provided as much as 8,400 new jobs for Filipinos. Two years later, one of the biggest names in the Philippine call center industry opened up two more call centers. Jack Frecker chose the Philippines as one of the locations for their new centers as part of their plan for international expansion.
The BPO industry in the Philippines expanded by about 46% since 2006. Because of this, the demand for offshore call centers rose. In 2010, the Philippines has become the world’s BPO capital. It was in the same year that the entire industry projected a rise in revenue and growth. Further, the vibrant BPO industry helped attract foreign investors to the country.
2011-2012 recorded increase in call center revenues all over the Philippines. By this time, the BPO industry's net worth amounted to $11 billion. The industry was feeding 638,000 employees and revenues grew by 46% on an annual basis. It also contributed to the country’s GDP growing at 5.4% at the time. Later that year, the industry was employing 900,000 souls.
In 2016, various call center services in the country produced at least 1.3 million new jobs. Gaining an annual growth of at least 17%.
At present, there are 788 call centers in 20 different locations in the country. More foreign companies outsource to the Philippines because of the excellent quality of service. Big business from the United States, Europe, and Australia make up major clients of Philippine Call Centers.
There is no doubt that the BPO has become one of the major contributors to the country’s GDP. With the support from the government, growth in the Philippine BPO industry will continue to rise in the coming years
The Philippines recently overtook India as the call center capital of the world. The outsourcing industry will continue to evolve to accommodate more specialized outsourced solutions. Companies from all over the world see the Philippines today as the best solution to their BPO needs.
IGlobal Business Solutions Inc. is a new addition to the BPO industry established in 2016. It breaks traditional BPO models in its location and hiring methods.
BPOs are usually located in large cities like Metro Manila, Cebu City, and Angeles City. New employees hail from nearby towns and provinces. While some employees opt to commute daily, most choose to move to the cities. As more people flock to the cities, the demand for living spaces increases. Meanwhile, the number of residential buildings remains the same. This alone poses problems. Law of Supply and Demand dictates that if the demand is high and the supply is low prices increase.
iGlobal changes this by actually building its infrastructure in the countryside. Commuting time is shorter thus employees do not need to rent living spaces. Cost of living in the country side is much lower than in the cities. Employees actually save more because they spend less.
The first BPOs in the Philippines where contact centers handling inbound calls for customer service or technical support. Hence, the term call center became popular among young professionals and college students. Today, BPOs are now evolving from call centers to administrative and technology service providers. Due to growing demands, BPOs now offer shared services such as accounting, IT, HR and virtual administration staffing.
iGlobal is one of the trailblazing BPO companies who chose to diversify its service solutions to interested business. It likewise breaks traditional business models in hiring its people. Normally, the outsourced company has the free reign to hire people for its clients. iGlobal, on the other hand, does the preliminary selection based on clients’ specifications. Thereafter, the clients interview the candidates then make the decision who to hire. This approach provides outsourcing companies a degree of control in the selection of their team.
Artificial intelligence and smarter software are threats to the Philippine BPO Industry. There are claims that smart software can handle repetitive tasks. Some are clever enough to handle complicated inquiries. The jobs left for humans are outbound sales or handling irate callers. Native English speakers will have the upper hand with outbound sales. They will give Filipinos a run for their money. But it will never put their spirits down. Many young generations of Filipinos actually speak English more than Tagalog. Access to American media allowed them to develop an accent indistinguishable from Americans.
Artificial intelligence is an exciting development in technology. Sad to say, it will be impossible for an economy to run on automation and AI. What happens the system goes awry? Can people entrust everything to machines void of feelings, empathy, and compassion? At the end of the day, people will be more comfortable speaking with a person on the other line.