Existing clients driving BPO growth, execs say
By Lawrence Casiraya
INQUIRER.net
First Posted 17:13:00 05/29/2008
Filed Under: Economy, Business & Finance
MANILA, Philippines -- A faltering US economy has been cited as welcome news for offshore sites such as the Philippines. It does not necessarily mean, however, that the number of companies doing outsourcing is increasing.
A number of BPO (business process outsourcing) executives interviewed recently noted that the US slowdown does not have dire effects on the local industry. Instead, cost-cutting measures are seen to be favorable for outsourcing operations offshore.
The client base, however, remains steady, at least in the case of call centers, the biggest revenue earner in the overall BPO segment.
"Growth is still coming from existing accounts," said Raffy David, board director for the Call Center Association of the Philippines (CCAP), whose members include some of the biggest call center operators in the country today.
According to David, growth is coming from existing customers looking to shift call center resource offshore and then divert savings to other needed internal resources.
"There are companies that haven't outsourced yet due to union issues," said David during an interview with INQUIRER.net, citing prevalent misconceptions about outsourcing that it displaces jobs in the US.
"These are companies that may not be in the best position to offshore because people there now are afraid to lose jobs," he said.
"It's not really a matter of whether how much requirement or seats we are looking at that the company would need. It's simply whether that company is outsourcing or not," added David, also marketing director for local call center operator Pilipinas Teleserv.
Meanwhile, Enrique Gonzalez, chief executive of IPVG Corp., believes more companies in the US will eventually get into outsourcing.
"There is that initial shock alright due to the weakened economy. But once companies get over it, they would realize how much cost-savings outsourcing brings in the long-term," Gonzalez said in a separate interview.
IPVG, a publicly listed firm, reported P828 million in first-quarter revenues, 60 percent of which was pumped in by its BPO and call center businesses. IPVG has acquired two US-based call center operators in the last two years.
Gonzalez is confident the Philippines will soon overtake India, not only in the call center business.
"This business favors big players. The potential remains tremendous because there's lot more work to be outsourced," he said.
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