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Iii. OVERVIEW OF THE PHILIPPINE OUTSOURCING INDUSTRY
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There are five subsectors of the Philippine outsourcing industry:
these are the Contact Centers, Medical Transcription, Animation, Shared
Financial & Accounting Services, and Software Development Services.
An expanding, global market to the overall tune of US 120 billion
in all these areas heighten the prospects of expansion within the
next four years: |
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A. |
Outsourcing Industries |
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Customer Contact Center Industry
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The contact center service includes a physical location where calls
are placed, or received, in high volume for the purposes of sales,
marketing, customer service, telemarketing, technical support or other
specialized business activity. For sales, call centers can conduct
inbound and outbound acquisitions, promote customer loyalty programs,
take in catalogue orders, and introduce new products. For research,
call centers can take note of customer satisfaction levels or conduct
brand and product loyalty surveys. Some value-added services include
customer segmentation, database warehouse strategies and creative
marketing programs. There are currently 37 players in the contact
center industry, competing for the North American and UK markets.
The key advantages of establishing contact operations in the Philippines
include high service ethic, low labor cost and turnover as well as
fluency in the English language. Typical operating costs are broken
down as 60% labor, 30% telecommunications cost and the remaining
10% goes to training, recruitment, utilities, and rental costs.
Labor costs average P12,000 to P14,000 per operator or roughly US$1.05-1.22/hour
compared to US labor cost of US$10 to US$14/hour; bandwidth costs
between US$10,000 – 12,000.
Trade Association
Contact Center Association of the Philippines
Stevie Martinez, Executive Director
CCAP Secretariat: 7/F Jacinta Bldg. 2, EDSA, Guadalupe, Makati City
Telephone : +632 8811111
Fax : +632 8824891
Mobile : +917 6114900
E-mail : stvmartinez@yahoo.com
URL : www.ccap.ph
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2. |
Medical Transcription |
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Medical Transcription means converting into written form, the dictation
by the physicians and other healthcare professionals regarding patient
assessment, workup, therapeutic procedures, clinical course, diagnosis,
prognosis, etc. in order to document patient care and facilitate healthcare
services. There are approximately 16 firms providing medical transcription
services, and the Philippines offers a service highly familiar with
US medical standards, terminology and practices. These companies have
an aggregate 1200 workforce which at any given time can achieve performance
levels at 80% accuracy without training, 90% with training, and 98%
with experience. Some of the companies are currently in partnership
with US transcription companies.
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3. |
Animation |
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Animation simply means giving the illusion of movement or life to
cinematographic drawings, models or inanimate objects; in the Philippines,
the local animation industry is emerging as a strong alternative to
Hong Kong’s services. Providers are highly competent in terms
of artistry, creativity and pricing: 2D price per minute is 15%-20%
lower than US costs, while 3D direct to video is 25%-30% lower than
US costs. The industry is capable of providing traditional (cel) animation,
2D animation (Software: US animation, Animo, Toonz and CTP), 3D animation
(Software: Maya, Softimage, Studio Max and Lightwave), Flash animation
and motion capture services. The industry covers entertainment, website
development, multimedia marketing and advertising, distance-learning,
education modules and mobile multimedia. There are some 22 firms,
including 11 direct exporters. Markets include the US, Japan, Australia,
Canada, France, Malaysia, China, Korea, and Thailand. Well-known clients
include Walt Disney Animation, Visitor Channel-Guam, Nelvana, D’ocon
Films, Warner Bros, Cine-Groupe-Canada, Prochlight, USA Lukfilm, Cronidsoma
Cartoons, Rainbow SRL, SPI International, Matinee Entertainment, and
New World Animation Services range from pre-production to production
proper: storyboard, character designing, background designing, props
designing, layout keys, sheet direction, slugging, track reading
and special effects, creative/traditional- layout, background, animation,
clean-up, in- betweening and animation checking, digital background,
scanning, ink and paint, composting and rendering.
Trade Association
Animation Council of the Philippines Inc. (ACPI)
Ms Stella Reyes – President
Add: 2F. JEMCO Bldg., Bernal St. cor C.Raymundo Ave.,
Rosario, Pasig City
Tel.: +632 640 1512
Fax: +632 640-1623
Email: waynedearing@pacific.net.ph
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Shared Financial & Accounting Services |
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Financial and accounting services is a BPO service which makes
efficient use of modern technology to perform various accounting
and other financial-related services. It involves a system of centralization
and distribution that provide process- or knowledge-based financial
services to other business units.
The industry provides the following:
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General Accounting and Bookkeeping Services |
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Account Maintenance |
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Accounts Receivable Collection |
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Accounts Payable Administration |
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Payroll |
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Asset Management |
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Financial Analysis and Auditing |
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Management Consulting (Management Advisory Services) |
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Inventory Control and Purchasing (Procurement) |
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Expense and Revenue Reporting |
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Financial Reporting |
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Tax Reporting |
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Other Financial-related services (financial leasing, credit cards,
factoring and stock brokering) |
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There is an estimated 5-6 financial and accounting
service outsourcing providers who are networked to dozens of backroom
operators. The country provides some of the best accountants in
the world at typically 20%-40% lower costs. The Philippines annually
produces about 380,000 yearly university/college graduates of which
80,000-100,000 Business Administration/Commerce Graduates (Accounting,
Finance, Management and other Business-related subjects) and 50,000-70,000
IT/computer science and Mathematics graduates. Current markets include
some 300 regional headquarters located within the Philippines itself,
Hong Kong and Singapore regional headquarters; and US and Brussels
financial communities.
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5. |
Software Development Services |
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Software development services pertain to the provision of contract
services rendered locally for offshore clients or the assignment of
manpower to the client’s facilities. These include analysis
and design, prototyping, programming and testing, customization, reengineering
and conversion, installation and maintenance, education and training
of systems software, middleware and application software. There are
52 BOI-registered firms and 24 PEZA-registered firms and some 1,739
registered companies in the IT sector. These firms provide hardware
consultancy, software consultancy and supplementary activities, software
development, data processing and conversion, database activities,
maintenance and repair and other related activities. Over 1000 firms
provide data processing and conversion, the baseline for knowledge
management and generation.
Major players include:
- Accenture (SW customization)
- WeServ (SW Dev’t. and Implementation)
- Trend Micro Electronics (Software/Applications Development)
- APTI Phils. (Mobile Device Development)
- Ideawurx (Customized computerized telephony systems)
- Jupiter Systems (Software Development)
- Headstrong Philippines (Software Development)
These firms service the Philippines, US, Singapore and Indian markets.
The country has a large pool of highly-educated and highly trained
professionals; there are over 100,000 IT professionals, 99% of which
are college graduates, and over 10,000 Filipino IT personnel work
in overseas installations.
Trade Association
Philippine Software Association (PSA)
15 th Floor, Headstrong Philippines, Inc.
Add: Urban Bank Plaza cor Sen Gil Puyat Ave., Makati City
Tel.: +632 886-1932
Fax: +632 886-1899
Email: marife.zamora@headstrong.com
Website: www.psa.com.ph
Information Technology Foundation of the Philippines (ITFP)
Add: c/o PETEF 7 th floor Unit II PS Bank Tower,
Sen Gil Puyat Ave., Makati City
Tel.: +632 8136398 or +632 759-3870
Fax: +632 813-6397
Email: mca@philenter.com |
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B. |
Success Stories |
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Though the Philippines’ various outsourcing subsectors
have been characterized as relatively young industries, and are currently
gaining a reputation as prospective areas for career advancement because
of massive recruitment of young graduates, outsourcing stalwarts are
in fact old hands in the outsourcing business. The expertise and reputation
built over the years come not only from long-term establishment, but
also from extensive networking and exposure of corporate leaders in
outsourcing partnerships. The following profiles three of the most
expansive outsourcing providers in the country today:
SPI Technologies
SPI Technologies Inc. was founded in the Philippines in 1980, and
is a growing force in the business process outsourcing industry.
With six strategic business units, eight production facilities in
Asia, and seven customer support offices around the world, SPI provides
comprehensive BPO services that help companies and institutions
around the world to improve their organizational efficiency. SPI
has significant expertise in large-scale content conversion, call
centers and CRM programs, litigation support services, publisher
services, software development and legacy software maintenance,
healthcare documentation, and the technologies that support these
business processes. It is the largest and most comprehensive outsourcing
provider in the Philippines. In 2002, under the leadership of Ernest
Cu, President and CEO, the company posted revenue growth of 56%,
amounting to Php2.4 billion. It earned a net profit of Php244 million
for the same year, and continues to experience high growth.
Sykes Asia
Since 1977, Sykes has grown from a small engineering firm with
3 employees, to a global corporation with over 16,000 employees.
Business operations in the country began in 1997, and services include
customer care outsourcing (such as technical support , customer
services, marketing support and speech solutions), enterprise support
services (IT services, IT help desk service and corporate help desks)
and fulfillment services Supply Management (fulfillment & financial
services and delivery management). Sykes Philippines is the second
fastest-growing tech company in the country, with 36% growth in
net revenues from 2000 to 2001, and a 3-year average growth in net
revenues of 167% from 1998 to 2001. In 1998, their net sales was
only P57 million. But come 2000, it ballooned to P566 million and
even soared to P772 million the following year. From P13 million
in net income in 1998, it climbed to 315 million in 2000 and up
to 333 in 2001. In 2002, the company invested an additional $200
million in its call center operations in the Philippines, making
the country the hub of its operations for the Asia-Pacific Rim.
Equivalent to about 1,131 seats, this fresh investment translates
to more than 2,000 new jobs for Filipinos. Sykes' Philippine operations
now accounts for 77% of its total Asia-Pacific capacity.
Ambergris Solutions
Ambergris, which began operations in January 2002, operates in
the Philippines through wholly-owned subsidiary Ambergris Solutions
Philippines, Inc. Ambergris provides a full range of inbound customer
care solutions to large enterprises (some of which are Fortune 500
members) from a state-of-the-art, 500-seat contact center in the
Ortigas central business district. The Ambergris contact center
employs Avaya and Cisco technology, and operates over a fully-redundant
fiber-optic network. Ambergris has also developed Baleen, a proprietary,
patent-pending performance management and software solution. Ambergris
plans to add four more contact centers over the next four years.
Ambergris is currently under the helm of Javier Infante (formerly
of the Boston Consulting Group), and the company’s investors
include ICCP Venture Partners, PAF Holdings Ltd., and PJL (Lhuiller)
Ventures Inc.
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C. |
Directory |
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Click on the List to view Company Directory for each
category. |
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