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Philippines still top BPO destination - consulting firm

October 4, 2007 10:19am

The Philippines will remain as a top destination for the estimated $150-billion business process outsourcing industry, a top official of international consulting firm Diamond Management and Technology Consultants Inc. said Wednesday.

"The Philippine remains, in my view, the No.1 destination for quality customer contact services," Brian Tumpowsky, principal of Diamnond Technology said Wednesday.

Diamond's 2007 global outsourcing industry study showed that the Philippines currently ranks 6th as a BPO destination after India, the US, Canada, China and the United Kingdom.

He added that the industry is expected to grow 50 percent in the next three to five years from its estimated size of $3.4 billion last year.

The Business Process Outsourcing Association of the Philippines earlier projected industry-wide revenues of $12 billion and about one billion jobs created by 2010. The industry includes call centers, back office, medical transcription, legal transcription, animation, software development, engineering design, digital content and other data transcription.

The Diamond study showed 56 percent of all BPO buyers ranked cost as the top reason for outsourcing but Tumpowsky said global companies will soon realize that "cost arbitrage is not sustainable strategy" and that "eventually, the water tap will run dry." With this, he said BPO buyers are starting to become more sophisticated.

The increasing sophistication bodes well for the Philippines, which is capable to compete on quality and not just on dollars and cents.

"The country rates very well in terms of having talented people, strong infrastructure, and the quality of customer service," Tumpowsky said.

However, he noted that the only concern in the Philippines is that "it seems already satisfied with the status quo and its current standing in the marketplace."

Tumpowsky said that if the Philippines plans to improve as a market for BPO firms, it must be more than just a destination for call centers, and move on to being a center of knowledge-based outsourcing.

The Diamond study was based on a poll of hundreds of senior executives mainly based in the US and Europe an industry trends over the past 12 months in the areas of spending, buyer satisfaction, outsourcing impact and leadership of the changing outsourcing market. - Cheryl Arcibal, GMANews.TV