PH outsourcing in 2019

Published January 23, 2019, 12:00 AM

by manilabulletin_admin

Wilma I. Miranda
Wilma I. Miranda

The Philippines, being. one of the consistent favorite BPO destinations globally, aside from India and China, may have to be innovative to continue to grow its outsourcing industry. BPO revenue in the country are seen to grow by 9% per annum even up to 2022 and seen to continue to outpace revenue from OFW remittances.

However, the industry is facing many challenges. There was of course the “America first policy” of President Donald Trump since its revenues from the US was estimated to be $25 billion ( a figure in 2016 by Asian Briefing). There is also the uncertainty looming around with the plan of the government to rationalize fiscal incentives which could greatly effect the BPO industry.

The Philippines maybe number one in voice solutions but it is also being looked at as a favorite destination for non-voice particularly high-end outsourcing requirements such as IT, finance and accounting, and other professional services because of the perceived availability of workers with these skills. Since there is a big threat to call centers with many clients adopting computer automation and robotics to do the work instead of call center agents, the country would do well to train people to be ready for the demands for higher skilled workers on non-voice and those with knowledge process outsourcing capability. In the past, the Philippines ranked 2nd to India in the non-voice outsourcing but other countries are also emerging as favorite destinations for non-voice
Even with President Trumps’ policy, the Philippine BPO continues to grow in 2017. The Train Law on the rationalization of fiscal incentives is still hanging at the start of the year in 2019. If implemented, this will likely affect the competitiveness of the BPO industry in the Philippines compared with other countries – will the BPO in the Philippines hurdle this next challenge while at the same time facing the challenge of automation of the call center industry?

With these many challenges facing the country, other top BPO destinations and emerging countries are aggressively providing better cost-effective solutions to services their government providing tax incentives. These countries that will likely emerge are Bulgaria, Romania, Egypt, Mexico and Colombia with government tax incentives being offered in certain of these countries to entice clients, the availability of skilled workers through government-sponsored training, bilingual capability to speak not only English but also French and German by countries such as Egypt.

To remain competitive, the country should be more proactive and should be more aware of the outsourcing trends in 2019. In an article by Stephanie Overby (http://www.enterprisersproject.com) – the top trends in 2019 will still involve digital transformation as it continues from 2018. Companies will be investing heavily on this although the value to be realized is still to be proven. With the surge of information and data, the need for advanced analytics will be more apparent. The combination of IoT (Internet of Things), artificial intelligence and cloud computing will help a lot in providing a more efficient advance analytics. According to the same article advance analytics is the number one digital investment with businesses planning to increase deployments by 75% over the next 12 to 18 months.

With the advent of digital transformation the need to retrain existing workers or to provide proper training to newly hired workers is crucial. The important thing to remember is that whatever form of outsourcing, the need for digital transformation is inevitable. Colombia for instance, is providing government-sponsored technical training to equip their workers and make them available for work. There is a lack of workers worldwide who are properly trained for digital transformation. The country needs to invest in upgrading the skills of the workforce in the Philippines in order to show the world that our people are ready to take on new tasks and new challenges to provide clients’ requirements for innovative and cost-effective solutions.

(Wilma Miranda is the Managing Partner of Inventor, Miranda & Associates, CPAs and Member of the Board of Directors of KPS Outsourcing, Inc. The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of these institutions)

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