BPO ~ Basic Facts

The Philippines BPO Industry: Basic Facts

BPO = Business Process Outsourcing

            Call Centers
            Medical Transcription
            Finance and Accounting
            Social Network Marketing (Email, Facebook, Skype)

Every large enterprise in the world: corporations, banks, governments,  needs the services that the BPO industry provides. Thus the market is a significant fraction of the total world economy.

Already the BPO industry is the second largest generator of foreign exchange for the Philippines, after only the OFW remittances.  Today, the Philippines is the world’s leading call center destination, beating out India, Furthermore the BPO industry is growing at a 20% rate each year and will soon generate more revenue than the OFW remittances.

The numbers 2011:

Total Revenue: $11 Billion = 451 Billion PhP  @ 41 USD/PHP
638,000  jobs in 2011 so 706,000 PhP/Employee Revenue

Projected numbers 2016: 

Total Revenue: $25 Billion = 1 Trillion PhP  @ 40 USD/PHP
1,300,000 jobs in 2016 for 770,000 PhP/Employee Revenue

This information and much more is available form the IT & Business Process Association Philippines (IBPAP)

The BPO Industry is the future for the Philippines.

BPO is clean, environmentally sound, growing rapidly, and sustainable. It requires two core resources: bandwidth to the rest of the world and fluent English speakers. Adequate investment will provide the bandwidth. Adequate effort and investment in education will enable many, if not most, young Filipinos to become fluent in English.

The 30 Largest BPOs 

These are  30 largest business process outsourcing (BPO) companies in the Philippines. They each provide employment anywhere from 5000 to 25000 educated, fluent in English and tech-savvy Filipino professionals. For these and more, see.

 1) Accenture Inc. (P17.433 billion)
 2) Convergys Phils. Services Corp. (P11.901 billion)
 3) Teletech Customer Care Management Phils. Inc (P9.413 billion)
 4) JPMorgan Chase Bank N.A. – Philippine Global Svc Ctr  (P9.931 billion)
 5) Stream International Global Services Phils. Inc.(P6.854 billion)
 6) Aegies PeopleSupport Inc. (P6.619 billion)
 7) Sykes Asia Inc. (P6.243 billion)
 8) Sitel Phils. Corp (P5.913 billion)
 9) Telephilippines Inc. (P5.598 billion)
10) Telus International Phils. Inc. (P5.232 billion)
 11) Deutsche Knowledge Services Pte. Ltd. (P5.172 billion)
 12) HSBC Electronic Data Processing Phils. Inc. (P4.680 billion)
 13) IBM Daksh Business Process Services Phils. Inc. (P4.178 billion)
 14) IBM Business Services Inc. (P3.976 billion)
 15) Shell Shared Services Asia B.V. (P3.725 billion)
 16) SPi CRM Inc. (P2.914 billion)
 17) APAC Customer Services Inc. (P2.566 billion)
 18) 24/7 Customer Phils. Inc. (P2.378 billion)
 19) Genpact Services LLC (P2.308 billion)
 20) IBM Solutions Delivery Inc. (P2.169 billion
 21) SPI Technologies Inc. (P2 billion)
 22) Lexmark Research & Development Corp. (P1.918 billion)
 23) ePLDT Inc. (P1.840 billion)
 24) Kgb Phils. Inc. (P1.807 billion)
 25) Advanced Contact Solutions Inc. (P1.715 billion)
 26) Chartis Tech & Operations Management Corp. Phils. (P1.427 billion)
 27) ePerformax Contact Centers Corp. (P1.367 billion)
 28) Synnex-Concentrix Corp.-Philippine Branch (P1.219 billion)
 29) Citigroup Business Process Solutions Pte. Ltd. (P1.159 billion)
 30) Cyber City Teleservices Inc. (P1.136 billion).

The Philippines BPO Industry: Problems

The number one problem for BPO's in the Philippines is employee retention. The industry has a high turnover of employees, with some estimates putting the rate at close to 50% per year. That means each year they must hire two employees for every job! This is a tremendous expense.

Let's look at this from two points of view: that of the employer and that of the employee.

First the employee. Many young and ambitious people, men and women, flock to Manila from the provinces. They have come for education and stay for employment in the BPO industry. But they also stay for the excitement of a big city. They are well educated, computer literate and not burdened with huge family responsibilities (yet :)

So they work for a few months then party for a few months and get a new job.

The work is not always that much fun. How many times a day can you ask a complaining customer, "Have you plugged it in, Sir( or Mam)." without going completely insane? The solution is simple. Work at the BPO answering phone calls for a few months then quit. It is easy to get another job. You can make some money, party hearty for a few months, then go back to work, often a better pay, because you now have experience. The BPO companies are eager for experienced employees.

Progressive BPOs are working hard to improve retention. One thing that they can do is realize that older workers have different needs than younger workers. And everyone gets older. Demographics is on the side of the progressive BPO.

Moving to the provinces, in particular to an Ecovillage, like the one we are proposing be built in Sitio Ligtasin in Baranguey Luyahan, of the Municipality of Lian, Batangas, is a certain way to retain the very best employees. These are the people who are settling down, want to raise their children in a beautiful natural environment near a beach. They want to walk to work and have their children walk to school. They want to live in a garden community. They know that this is possible and will sign lifetime contracts to get it.   A BPO that provides this environment to its most productive employees need not worry about retention.

From the employer's point of view retaining productive employees results in major savings in training and recruitment expenses. Since these are desirable jobs that can be performed for many years mature people who have periodic retraining and adequate vacation time can be expected to perform well for decades, indeed a mature BPO industry will be quite likely to wind up employing the children and grand children of the original workforce.

Siting a BPO center in the heart of an Ecovillage will solve many retention problems.

In our next few posts we will amplify both on the ways a BPO employee can move forward and on ways that the BPO industry can retain employees.

BPOs & Barangays: Zen Pond

This post describes Zen Pond, a BPO based Garden Village, to be sited near Matabungkay Bay, Lian Batangas. The core concept can be implemented in thousands of locations throughout the Philippines. Lian has the technical advantage of being 10 kilometers from the location where fiber optic cables connecting the Philippines with the Rest of the World emerge from the West Philippines Sea. Thus bandwidth is cheaper and more available than in Metro Manila.

Executive Summary

The Green Awakening is a global understanding that existing environmental abuses must end if we are to live sustainably on our Planet Earth. The social and economic structures of our world are also being transformed by the Communications Revolution that makes it possible to reply to phones, emails, web queries and more, from anywhere on Earth. The Green Awakening says, “Do this Business Processing work in a Communications Garden, in Zen Pond.”

All corporations must reply to phones, emails and web queries.

These corporations pay BPOs (call centers) a minimum of 300 PhP/hour to answer their phones. English answering services bill 12 hours/day 365 days a year. Thus 4,380 billable hours generate 1,314,000 PhP/year in revenues for each phone. A 1000 seat BPO makes well over 1 Billion PhP/year in revenue; Sixty per cent, 600 Million plus is salaries.

What does this mean for Lian, Batangas?

Lian, Batangas can generate new sources of revenue and employment, exploiting these revolutions, by attracting a 1000 seat call center to a Communication Garden, Zen Pond. Salaries will be spent in Lian. This model will work for many provincial towns and barangays.

BPOs have problems. Employee retention is their top problem.

Many people do not want to live in Metro Manila or try to raise a family there. Pollution, traffic, noise, criminal violence are all things most people do not want. They certainly do not want that for their children. And they can go OFW easily. They work with managers of global corporations every day. But they do not want to leave the Philippines if they have a decent alternative.

Zen Pond, in Lian, is where BPO employees would love to live. We will explore the concepts and develop this idea into a complete plan in following posts.

Credits. Fred Laughter is the originator of the term Green Awakening

BPOs & Barangays

For some time now I have been working on an essay entitled:

Opportunity Philippines: BPOs & Barangays.

I have researched and written a lengthy essay on the subject. The essay describes an integrated model community based in a barangay in the provinces of the Philippines. Revenues from a call center sited in an ecovillage will be used to finance the community. For one such site see Zen Pond.

There are two very successful models that I am attempting to integrate:

Andrew Tan, Megaworld, "LIVE WORK PLAY LEARN SHOP" model is targeting successful corporate professionals by developing new cities in Metro Manila.

Tony Meloto, Gawad Kalinga, the GK Model targets poor people and builds communities intended to lift them from poverty by building productive values.

The intent in publishing this essay is to find a few people who are seriously interest in the pursuing these goals. I hope people will help evolve the goals, the essay, the plan and the project. The hope is for this to become a successful project, not merely an essay.

This essay is a tool. The goal is to create a new kind of Barangay, the Barangay of the Future, an ecovillage that hosts a BPO (Call Center), a diverse community of corporate professionals and gardeners can thrive in a sustainable garden environment near a beautiful beach.

Thus I have decided on the following strategy. Fragments and excerpts from each major section of the larger essay will be posted. Comments solicited from the blogs followers will then be integrated (with attribution) into the essay, which will be a public document, offered under a Creative Commons License. I will retain editorial control and responsibility.

So if you are an individual, perhaps already involved with Megaworld or Gawad Kalinga, then let's work together.

Regards,

Robert E. La Quey, PhD