Is Outsourcing Philippines Dead?

A blog banner by Magellan Solutions about Is Outsourcing Philippines Dead?

A blog banner by Magellan Solutions about Is Outsourcing Philippines Dead?

Outsourcing Philippines is up and ready to face the changing global BPO landscape

 

The Philippines is a key player in the BPO global arena. Decades ago the country only offered low skilled voice supports. Now it booms into an industry player that offers a variety of services to its global clients. All these within the span of 30 years.

No wonder outsourcing Philippines offers its services across all industries. The country is now a top destination for staffing solutions. For healthcare, legal, research and development, finance and accounting.

Today, outsourcing Philippines has 30% market share of the global BPO industry. By 2022, the sector projection is at $250 billion. This is a good number despite the hit and dip it took from the sweeping pandemic.

 

Philippines VS. India: Why They Emerge As Top Outsourcing Destinations

 

Countries race to improve their services. For them to cover a bigger market share in the global BPO industry. Two countries became the go-to outsourcing destinations. India and the Philippines.

India is the top choice for IT services. All thanks to their commendable IT infrastructure and large talent pool. They offer impeccable services when it comes to application development. As well as Big Data, Internet of Things (IoT), Cloud, Social Media, and mobility.

While the Philippines is a stronger player in the business process management sector. In particular, customer service support. Businesses prefer call center outsourcing Philippines because of the Filipino neutral accent. Additionally the natural service orientation and cultural parallels with the West.

In 2014, 70% of India’s voice-based services transferred in the Philippines. This is a milestone for the Philippine BPO as it made its mark in the global competition. Even dubbed as the World’s Call Center Capital

Top Industries That Outsource

Outsourcing is not an option. It became a smart business move across industries. As it frees businesses from non-core tasks. Thus improving core processes.

This is also cost-saving as scalability becomes possible at half of the price. This is in comparison with hiring in-house talents.

Sectors that mostly outsource include:

  • Banking, Financial Services, and Insurance (BFSI)
  • High-Tech and Telecommunications
  • Manufacturing
  • Healthcare

IT Services

Adoption of new technologies improves business processes. Outsourcing offers hybrid use of the latest technologies and human intellect. This is to achieve seamless output and quality results.

This service is in demand for the following sectors:

  • BFSI
  • Hi-tech & telecommunications
  • Manufacturing
  • Healthcare
  • Utility
  • Oil & Gas
  • Education
  • Government

Customer Relations Management Services

Customer service is not an add-on anymore. It is a core competency that sets a business apart from the rest. Competitive customer service support is a smart way to achieve customer retention.

Sectors where CRM is a core service include:

  • BFSI
  • Hi-tech & Telecommunications
  • Government

Knowledge Process Outsourcing Services

KPO requires specialization of an industry-specific process. Competitive industries outsource. When they do, they often need experts on their field for their staffing solutions.

Sectors where this specialization is a must:

  • Hi-tech & Telecommunications
  • Healthcare
  • Oil & Gas
  • Education
  • Government

 

Post-pandemic Global Trade Threatens Philippine BPO its Position

 

Global BPO landscape is changing and the pandemic further accelerates this. Faster adoption of technologies is one of the key drivers. This results in a shift away from entry level skills. This could threaten call center outsourcing Philippines.

Frost & Sullivan notes that call center jobs will be gone by the next few years. Citibank Global CEO Michael Corbat echoes the same. That voice service would be gone by the next three years.

For CRM, there is a clear spike in the use of Artificial Intelligence (AI), chatbots and deep learning. But these techniques are yet to reach its perfection so human factors are not out of the picture.

Decades in the market prompts Philippine BPO companies to expand its services. The country is now one of the top choices for LPO, accounting and financial management. Plus other skills such as digital marketing, content moderation, and social media management.

 

Business Process Outsourcing Industry In the Philippines: The Next Six Years & Beyond

 

The Philippines took a hit due to the pandemic. Plus its inevitable economic consequences. But industry experts have good forecasts for the country from an economic standpoint.

 

Institution

Center For Economic and Business Research (CEBR) Hong Kong Shanghai Bank Oxford Economic Institute The Economist Publication
Projection 22nd largest economy in the next 15 years

(out of 193 countries)

16th largest economy by 2050

(projection made 15 years ago)

2nd most attractive emerging market

(in the next decade or so)

6th in financial strength

(ahead Vietnam, Thailand, and China)

 

The Philippine BPO industry is the key driver for this projected economic growth. For 2021, the IT-BPO sector expectation is to bounce back this year. This is because North America and European Union will further maximize outsourcing.

This business move is for profit recovery through cost cutting of labor. Also to further improve scalability and maximize business processes.

 

Outsource To Philippines Review In 2021: Considerable Progress

 

The country is still one of the global leaders when it comes to outsourcing. As the country offers business solutions at a fraction of the price.

Industry experts claim that the proposition value of the country does not change. These are a young population and high English language skills. Which are marketable and still in demand all across the globe.

These factors are still attractive to investors. This will prompt good investments for the next 12 to 14 months although with slight decline.

 

Business Process Outsourcing Industry In The Philippines: Do or Die

 

Post-pandemic global trade will require the Philippine BPO industry to improve their services. This is to further realign their strategies to remain relevant.

The strategy is to move up the value chain to meet the changing global demands. As high value services will be on the spotlight in the next six years.

High Value Services for Contact Center and BPO:

  • Engineering Services Outsourcing (ESO)
  • Data Analytics
  • Performance Management
  • Legal Process Outsourcing (LPO)

High Value Services for Information Technology

  • Application Development Management (ADM)
  • System Integration
  • Automation
  • Internet of Things (IoT) enablement language like Python programming

High Value Services for Health Information Management

  • Preventive Health
  • Remote Healthcare Management

High Value Services for Animation & Game Development

  • 3D animation
  • Augmented & Virtual Reality (AR/VR)
  • Gamification

Global In-house Center

  • Industry specific services for Telecoms, Healthcare, Insurance and Pharmaceutical

 

Projected Changes In Skills For The Philippine BPO Market

 

As stated, the pandemic triggers the faster adoption of technologies and innovation. This is to streamline services and improve productivity. Under the strict implementation of social distancing and work from home setup.

Industries always look for innovations. To become more digitized, more connected, and smart business. This impacts the BPO industry as a whole. Especially in service delivery and quality.

Frost & Sullivan, IBPAP & Member Companies Data shows the following:

Skill Level

Dampening Growth

Low skilled tasks that need little abstract thinking like data entry and transcription

29% 4%

Medium skilled tasks that need experience, abstract thinking, and situational response

7%

12%

High skilled tasks that need specialized expertise, abstract thinking, and autonomy

1%

19%

 

The primary focus of Philippine BPO companies now rely on their ability to upskill their employees. This is to keep its market share in the global competition. This in turn enables them to diversify their services and meet the demands of global clients.

This also opens a huge employment segment especially for Knowledge Process Outsourcing (KPO). Existing workforce must do a wide reskilling and upskilling. An upgrade from mid to high to keep relevance.

Medium skills like accounting and engineering services are emerging specialized skills. These are high in demand. While for high-end skills animators and programmers are among the top choice.

 

Magellan Solutions: Ready For Whatever Challenges

 

We are 17 years in the call center services and one of the top BPO companies in the Philippines. We continue to diversify our services to serve our global clients and to remain relevant amidst the pandemic. We grow as a company together with our employees as they continue to upskill.

Magellan Solutions provide stellar call center services, be it inbound and outbound. At the same time we offer medium and specialized skills. Such as legal process outsourcing, financial management, knowledge process outsourcing and many more.

We provide impeccable services to businesses of any size. For your customer service and other BPO solutions, we are your partner. Contact us today for a free 60-minute business consultation. Fill up the form below!

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