Outsourcing to Philippines
January 26th, 2007
Six years ago the call-center industry in the Philippines was virtually non-existent. And at that time, American company PeopleSupport who was providing outsourcing services to US companies through a call center based in St. Louis Missouri was watching the internet bubble burst and their revenues shrink.
So they looked overseas to find a low cost location. The obvious choice was India, but they were skeptical. India’s outsourcing, (BPO or Business Process Outsourcing) has grown out of the then standard communications medium of the internet, text messaging.
India’s highly technical and English speaking labor force and made for a good fit for text messaging communications, but technology has changed, the phone line is freed up with VOIP (Voice over IP) allowing cheap to free phone calls over the internet.
PeopleSupport was convinced that consumers, especially Americans who make up the majority of call center users) would prefer to talk to customer service rather than text message. This created problems for Indian BPO firms making the transition from text to voice support, mainly due to the strong accent, and spawed the growth of the English as a Second language industry throughout India, where great focus and energy is placed on trying to change the accent to sound more Western.
Meanwhile, PeopleSupport set up operations from the start in Philippines, where there’s a young enducated workforce with a history and close ties to the US and very little foreign accent.
Wages in India are 15% lower than Philippines (about $3 usd per hour) but familiar accents it turns out matter more to the American companies than cutrate costs.
The offshore BPO industry in the Philippines went from virtually no employees in 2001 to an estimated 250,000 last year. Revenues from call center operations in the Philippines are expected to grow more than 30% annually for the next seven years exceeding $5billion by 2012. Last year they topped $850m according to Frost & Sullivan.
“The affinity for Western culture and conversational American-style English provided by Philippines BPO’s was a very good fit for our call center operations.” says a signifant customer of PeopleSupport.
PeopleSupports competition in the Philippines:
Convergys
Sykes
Teletech Holdings
Source: Forbes Asia
