The Future of the Philippine BPO Industry

The Philippine BPO industry continues to grow and is showing no signs of slowing down. According to the IT-BPM Roadmap 2022, the BPO sector is expected to grow at $40 billion in revenues and 7.6 million direct and indirect jobs, with 500,000 jobs outside of the National Capital Region.

The BPO industry serves as one of the Philippines’s top economic drivers, generating $22.1 billion in 2017. It is expected the revenues from this sector are expected to grow further at an annual rate of 5.6% from 2016 to 2022.

The Philippines has been dubbed as the “BPO Capital of the World,” The BPO sector is one of the largest industries that make up the demand for office space in the country. As of December 2018, BPO companies have rented or owned a record-high 1.5 million square meters and this is expected to rise in Q1 of 2019.

As the BPO sector continues to grow, it is expected to become the top source of income in the country by 2019. Currently, there are more than 1.35 million employees and by 2022, the number will increase to 1.85 million employees. The future is definitely bright for the BPO sector. Let us take a look at what the future holds for the BPO industry.

Robotic Process Automation

 

In robotic process automation (RPA), the aim is to replace the jobs at the bottom with automation capabilities. With RPA, you get cost savings, speed, and efficiency. Slowly but surely, many companies are starting to integrate automation into their processes.

One possible setback of automation technology is that administrative jobs like data entry and insurance claim processing will be replaced with automation and AI. Companies could end up teaching their employees to be viable with other jobs or end up jobless.

Synergy between bots and humans

Many people assume that BPOs of the future will be filled with robotic processes and automation. However, it is predicted that the BPO industry of the future will be reliant on the compatibility of technology with certain agents.

The truth of the matter is that human resources cannot be removed from customer service functions. No matter how advanced your chatbot technology is, there are still some bumps in the logical system that won’t become viable to replace genuine human reactions.

Cloud Computing Technology

One of the fast emerging technologies in the BPO industry is cloud computing. According to LogicMonitor’s Cloud Vision 2020: The Future of the Cloud Study, 83% of enterprise workloads will be in the cloud by 2020. 41% of enterprise workloads will be on public cloud platforms like Amazon AWS, Google Cloud, IBM Cloud, and others; 20% will be on private-cloud-based platforms, and 22% will be on hybrid-cloud platforms.

IDC also reveals that cloud computing spending is projected to grow at better than 6x the rate of IT spending through 2020. At the moment, cloud computing ranks third in overall IT investment priorities at 28% behind the 35% of enterprise applications and data/business analytics at 33%.

With cloud computing, you can have improved collaboration as the technology has a standardized system between your company and your BPO partner. Cloud computing offers more storage that is located in one place and completely free from external risks. In addition, using the cloud can add a higher level of data security.

Upgraded skills

With automation looming in the future, the job security and future of both workers and companies is being threatened. For this reason, the overall skill level of BPO workers will be taken to another level. This has paved the way for the growth of the Knowledge Process Outsourcing (KPO) sector. Workers in this field specialize in market research, equity research, and web development. At the moment, there are not enough workers to fill the KPO industry demands.

Robust BPO Hubs

 

There are now efforts to open up BPO hubs in provinces. Aside from the premier business centers in Ortigas, Makati, and BGC, BPO hubs have started to flourish in provinces like Cebu and Iloilo. International firms are now in talks with Philippine BPO companies to outsource their services not only in Metro Manila but also in Tier 2 and 3 cities like Cebu, Davao, and Iloilo.

In a recent report, global advisory firm Tholons ranked the Top 50 Digital Nations and Top 100 Super Cities in terms of digital innovation and transformation. In the Top 50 Digital Nations list, the Philippines landed in the 3rd spot after India and China. In the Top 100 Super Cities list, five Philippine cities made it to the list. In the Top 20 are Manila in 4th spot and Cebu in 12th spot. Davao, Bacolod, and Sta. Rosa landed in 85th, 97th, and 100th, respectively.

BPO operations in Cebu and Davao have driven the recent growth outside of Manila. Compared to Manila, the two cities faced little of the saturation issues and offered ample space for companies to expand their operations.

Cebu City has shown vast improvements in terms of infrastructure with 27 IT centers and IT Parks operating within the district. The city’s BPO sector offers a healthy mix of ITO, KPO, and BPO. Davao has made huge investments in developing its own IT infrastructures following the completion of Matina IT Park in 2015.

Animation and Game Development

Another area where international investors are drawing attention to is animation and game development. Filipinos are known for their affinity to visual arts and storytelling. Many American and European based companies are starting to outsource animation works to Filipino studios and freelancers. Many call it the “next big thing.”

Challenges that need to be addressed

As the role of technology in the BPO industry continues to grow, it is important for businesses to identify key infrastructure challenges being faced by the sector. Here are some of the ways BPO companies can best address these challenges:

Time to market

Speed is essential for BPO companies. It is important for BPOs to deliver customer services quickly and efficiently. They need to ensure that IT assets are available from the data center down to the workstations. BPO companies should have scalable solutions to make them flexible and quickly respond to changing demands.

To remedy the situation, BPO companies should put in place an integrated data center infrastructure that combines the essential elements of data centers such as power, thermal, and IT management in a standardized and deployable design. Aside from reliability and flexibility, they offer cost-effective solutions for future IT growth.

Critical infrastructure downtime

Downtimes can be a huge problem for BPO businesses. According to a recent study conducted by Emerson Network Power and the Ponemon Institute, the average highest estimated cost of downtime in a single IT facility was approximately $2.5 million.

Power outages and disasters can happen any time. A recent study revealed that UPS failure represent 25% of data center outages. It is critical that your BPO company should have reliable, flexible, and efficient backup power solutions.

Resiliency

Some areas in the Philippines are notorious for power outages. For successful outsourcing, BPO companies need to have a stable power protection solution in case of power failure. This is where a disaster recovery plan can come in handy.

5 Key Things BPO Companies Should Do To Succeed

As the future may seem challenging for most BPOs, here are some tips on how they can become successful.

  1. Focus on skills. Hire, train, and re-skill your employees so they can be more valuable to your organization. Provide your current customers with higher order capabilities.
  2. Go deep. As much as possible, you should try to acquire a deep knowledge of specific industry domains so customers will have a full understanding of your business and add value to its transformation.
  3. Demonstrate confidence. Show to your customers that you can deliver on business outcomes and that you are willing to assume the risk of such delivery.
  4. Lead the way. Establish deep technology capability and show how you can innovate on an ongoing basis.
  5. Accelerate. Invest in areas that will make your company stand out in terms of speed, innovation, and impact.

Why Outsource Your Business with airisX?  

Outsourcing your business with airisX offers a wide range of benefits. You get more time to work on your business, more productive use of your time to grow sales, more profit due to decreased expenses, and the freedom to focus on what is most important, whether that is making better products and services, or spending a holiday away without worrying that the business is missing out just because you aren’t there.

The benefits of outsourcing are simple:

  •  More TIME
  • More PRODUCTIVITY
  • More PROFIT
  • More FREEDOM

airisX Staff provides full time resources for those that have grown beyond simple task outsourcing with Freelance resources, like airisX Task, or are looking to outsource new or existing resources to a more cost effective offshore team. Businesses today are tapping into lower costs and expanded skills globally, and airisX is your partner.

Full Time Resources

Outsourced staff is dedicated to your company, not a shared resource, so you will have the same staff everyday to be part of your team and company. Whether you need a full time bookkeeper to stay on top of your accounting, invoicing and billing, or collections, or customer support or any other work that keeps you from working on growing your business, airisX has the expert staff you need.

Inclusive Pricing

airisX’s low costs are fully inclusive of recruiting, workstation, office space, human resources, benefits and taxes, and all other costs. Don’t get surprised by other outsourcing company’s extra charges for office space, taxes, or benefits. airisX doesn’t charge the silent mark-up for just being a Western owned company found in the industry, we pass along the great rates available in off-shore staffing to our clients, meaning we are 25-65% less expensive than other similar services. Set-up a time to talk with our Solutions Experts and we will show you why so many use airisX.

GET IN TOUCH WITH US TODAY

airisX has solutions for all sizes and types of companies. Getting started is as easy as scheduling a consultation with us, so go ahead and