Philippines Beats India Officially as Number 1 in BPO

Philippines Beats India Officially as Number 1 in BPO

December 6, 2010 – Manila (Philippine Daily Inquirer/ANN) – After challenging India for the top position for several years, the Philippines is now the world leader in business support functions like shares services and business process outsourcing, according to the latest reports and trends analysis.

In fact, the country overtook India in these categories last year, according to IBM’s latest Global Locations Trend Annual Report, released recently in New York.

India now ranks No. 2, the first time it was not in the leading position for these activities, according to the IBM report, launched in October but made available online last month.

“The Philippines has taken over the lead in the global ranking from India,” the report said.

The IBM report said the Philippines offered a similarly attractive business environment for international business support functions as India. Unlike India’s BPO hot spots, however, labor costs here have not increased as much.

On Thursday (December 2), the Contract Center Association of the Philippines said the country had become the call center of the world, with around 350,000 Filipinos working in call centers against India’s 330,000-strong workforce.

Revenues from the country’s call center industry are also expected to reach $5.7 billion this year, higher than India’s $5.5 billion, the CCAP said.

The call center industry, which provides so-called “voice” services like customer support and sales, is part of the BPO industry.

Call centers make up 70 per cent of the BPO industry in the Philippines.

Currently, there are 600,000 Filipinos employed in the country’s BPO industry, according to the Business Processing Association of the Philippines.

India is here

In yet another sign of the PhilippinesBPO dominance, Tata Consultancy Services, the information technology services, business solutions and outsourcing arm of India’s giant Tata Group, opened its first BPO center in Southeast Asia at the Bonifacio Global City in Taguig on Thursday.

“We believe that the Philippines has a very high quality of talent that can represent the company before our Asia-Pacific customers and our global customers,” said Vish Iyer, head for the Asia-Pacific region for Tata Consultancy Services.

Iyer also said Tata chose the Philippines because it “wants to be here to see the Philippine BPO industry grow from its current $9 billion (in annual revenues) to the projected $25 billion in 2016.”

The BPO center that Tata Consultancy inaugurated will have 400 seats, and a target of three clients, including Citibank.

Abid Ali Z. Neemuchwala, vice president and global head for business process services and process excellence, said the company expects to more than double this to 1,000 seats and a target of five clients two years from now.

The firm generated revenues of about $6 billion last year.

Support for BPO industry

In November, Philippine senator Miriam Defensor-Santiago said she would file a measure to “jump-start” legislative support for the BPO industry, especially its workers” and urged other legislators “to formulate laws supporting this booming sunshine industry.”

According to the International Labor Organization, the BPO industry may be broadly divided into voice services such as call and contact centers, and non-voice or “back office” services, like finance and accounting, data processing and management, and human resource development.

An ILO report released last July noted that Filipino BPO employees were earning 53 percent more than workers of the same age in other industries.

Local BPO employees also work 44.7 hours per week on the average, with overtime work averages of 1.12 hours per week.

Night work

The study also found that 42.6 per cent of BPO employees in the country work at night, and that respondents have reported sleep disorders, fatigue, eye strain and body pains.

Following India in IBM’s ranking of BPO leaders were the United States, Poland, China, Britain, Columbia, Costa Rica, Fiji, Ireland, South Africa, Sri Lanka, Hungary, Australia, Egypt, Chile, France, Canada, France, Singapore and the Netherlands.

The IBM report said Sri Lanka was another Asian country that had succeeded in positioning itself as an alternative to India. (With Inquirer Research)

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  • bradwilliam

    India’s BPO industry has evolved and matured to present higher-end services that require judgment-based analysis and domain expertise, rather than function-specific, rules-based performance parameters alone. As service providers strive to offer end-to-end services, we see BPO falling into different segments. At one end of the spectrum is the traditional rules-based transactional outsourcing; while at the other end is judgment-based transaction processing and full-service business process outsourcing.

    India has won its spurs as the world’s outsourcing destination of choice. Currently the country has a commanding share of the global outsourcing market.

    India is undoubtedly the most favored IT/BPO destination of the world. This raises the question why most of the big MNCs are interested in outsourcing their operations to BPOs in India. The answer is very simple- India is home to large and skilled human resources. India has inherent strengths, which have made it a major success as an outsourcing destination. India produces the largest number of graduates in the world. The name of India has become synonymous with that of BPOs and IT industry hence the name BPO India.
    Besides being technically sound, the work force is proficient in English and work at lower wages in comparison to other developed countries of the world. India also has a distinct advantage of being in a different time zone that gives it flexibility in working hours. All these factors make the Indian BPOs more efficient and cost effective. In order to meet the growing international demand for lucrative, customer-interaction centers, many organizations worldwide are looking to BPO India.

    A subset of outsourcing, Business Process Outsourcing (BPO) involves contracting the operations and responsibilities through a third party service provider. From the last couple of years, the BPO industry has evolved as the most substantial sector in the Indian market. India has emerged as the most favored location for all Bpo services across the globe. This has accelerated the Indian economy to the heights, progressively boosting the statistics depicting the growth in the years to come and it has been however forecasted that by 2020, more than 80% of the world of business process outsourcing services will be served by the Indian companies. Marked as the best place to attain superior quality services globally, the BPO industry is strengthening its foundation in India.

  • e4 BPO

    Thank you for your comment. Don’t get me wrong here. This article didn’t say that India was a bad place or didn’t have good call centers and BPO’s. This article was simply stating a current fact regarding pure numbers. This article didn’t say anything regarding the education level of Indian’s in general either. We all know that India has a good educational system and Indian’s for the most part, have a good command of English grammar. Again, this article was just giving number facts.

    Now, with that being said, I am American and not from the Philippines and I personally have talked to customer service agents that were outsourced to both India and the Philippines. I have also talked with clients who have spoken to agents from both countries. The biggest complaint that Americans have when talking to a call center agent is “accent” issues and not being able to fully understand them. This applies to both countries. Grammar, even if perfect, is shadowed by the strong accent. That is the biggest hurdle that both India and the Philippines need to overcome if either country is going to provide exceptional customer service.

    This is especially true when dealing with software and hardware technical support issues because it is critical that the customer be able to fully understand the tech support agent they are speaking to. And currently, in my humble opinion, the Philippines is also winning that battle by having agents with less of a strong accent, which this article didn’t address.

    Besides the number’s released by the IBM report, cost is also an issue. India has raised costs and therefore the Philippines has a lower TCO (Total Cost of Ownership) for BPO companies. This also translates to lower costs to foreign companies looking to outsource services.