(Published in The Manila Standard Today under the Greenlight column, June 26, 2007)
Business process outsourcing is a sector that has undoubtedly witnessed spectacular growth over the last few years, providing employment to more than 200,000 BPO professionals. It is projected to grow on the average 38 percent until 2010, contributing more than $12 billion in revenue.
The main drivers in this growth are BPOs in areas of contact center, back office services such as HR and payroll services, and transcription services such as medical transcription, These “lower value” BPO services all account for more than 87 percent of the total information technology enabled-services (ITES) revenues. Though industry experts project a double digit growth for these groups of BPO services until 2010, what’s worrying is that the growth is slowing down, and even plateauing in five years according to many industry practitioners. This is due to the maturing market, especially in the contact center area, and the entry of other countries such as Russia, Latin America, and other low-cost countries.
Growing KPO
The aim of the government though the Center for International Trade Expositions and Missions (CITEM), the export promotions arm of the Department of Trade and Industry, to sustain the growth of the BPO sector. CITEM plans to achieve this not only by enticing more foreign investors to locate in the country for skills-based BPO activities such as finance and accounting, but also to develop “higher-value” BPO called Knowledge Process Outsourcing (KPO).
KPO refers to the outsourcing of high-value complex tasks and processes to specialized service providers. As compared to traditional BPO, KPO delivers ‘knowledge’ or content expertise that demand advanced analytical and/or technical skills and some decision-making or decision-support processes; rather than process expertise that simply involves executing standardized processes. Some examples of KPO are market research services, network consulting and management, data search, integration and analysis, remote education, website services, research and development services, among others.
India and China, the top global leaders in the outsourcing market, are already ahead of our country in the KPO arena. China, with its large pool of scientists, has had a head start in research and development outsourcing. India, on the other hand, holds the lion’s share in the KPO market, forecasted to reach 71 percent or US$12 billion by 2010. This is due to India’s competitive edges in engineering and technology. Indian educational institutions annually churn thousands of professionals that serve the KPO technical services market.
Tapping the KPO market
If the Philippines want to partake of the huge potential of KPO, how then can we compete against the sheer size of scientists, engineers, and technical professionals that India and China produce every year?
The answer lies in the innate creative talents of Filpinos, who are well known globally in may creative industries such as music, arts and dance, crafts, and design. Filipinos are naturally creative as evidenced by the Ifugaos’ widely known Rice Terraces and the “I love you” computer virus created by a Filipino programmer.
The innate competitive advantage of our country, which is the creative minds of its people, can be harnessed by industry and government to carve a niche in the KPO sector, known as creative outsourcing that is hard for other countries to imitate.
Creative outsourcing currently includes animation, developing gaming content and e-learning and e-publishing. But according to Outsource2India, an Indian creative outsourcing provider, other creative services that can be outsourced include illustrations, editing, photography, screenwriting, creative writing, proofreading, cover design, journalistic writing, graphic design, storyboarding, video editing, instructional design, and music composition.
Animation services, a particular creative outsourcing service, has seen a stellar growth these part years, and projected to grow 60 percent until 2010, contributing to $ 800 million in outsourcing revenue.
Identifying Areas of KPO Opportunities
Even India-based BPO OfficeTiger believes in the creative talent of Filipinos. It set up shop in the country as the springboard for its legal services outsourcing and expects to make Manila the main center for creative "pre-media" outsourcing work, including desktop publishing, composition, typesetting, and graphic design.
According to Joseph Sigelman, co-president of OfficeTiger, design work is another place where Filipinos have an edge. He says he has found incredible depth of design talent in Manila; the kind of talent that is hard to come by in Bangalore, Hyderabad, or Chennai.
Digital content production outsourcing is also another area which Filipino creativity comes into play. A fast growing BPO segment growing annually close to 100 percent, our country can capitalize on the Filipino ingenuity in gaming content development and mobile phone content production
Capitalizing on Filipino talent
The opportunities creative outsourcing augurs well with the innate creativity of Filipinos. But the challenge now is how to develop this natural creativity among us, and channel it to capitalize on the vast opportunities before us.
One approach is for existing BPO players to expand their service offerings to include creative outsourcing. This will involve engaging in adjacent creative services, i.e. graphic design for pre-media outsourcing work, and developing this service into a productized creative outsourcing offering.
Another approach is for the local creative industry players, with the help of government, to organize themselves and offer and market creative outsourcing to foreign markets. There are a lot of accomplished local firms engaged in advertising, visual arts, cinema and audiovisual media, literature, and multimedia arts, that can extend their services to clients abroad.
Key to these approaches is an increased supply of creative talents from universities and vocational schools. Fortunately, a number of schools have stepped up to develop the local talent that industry requires.
For example, De LaSalle College of Saint Benilde School of Design and Arts offers courses in animation, digital film-making, multimedia arts, and others. The school has experienced a fast growth in enrollment over the past years, owing to the accolades that the graduates garnered in local and international competitions, and the growing awareness of arts and design among the Filipino youth.
According to estimates by research firm, Evalueserve, revenues from the KPO market will grow globally from US$1.29 billion in FY 2003, to US$17 billion by FY 2010. This implies compounded annual growth rate of 46 percent, for the global KPO market.
-------------------------------
Reynaldo C. Lugtu, Jr. teaches management and marketing courses in the MBA Program of De La Salle Professional Schools. He may be e-mailed at rlugtu2002@yahoo.com or visit his blog at http://rlugtu.blogspot.com
The main drivers in this growth are BPOs in areas of contact center, back office services such as HR and payroll services, and transcription services such as medical transcription, These “lower value” BPO services all account for more than 87 percent of the total information technology enabled-services (ITES) revenues. Though industry experts project a double digit growth for these groups of BPO services until 2010, what’s worrying is that the growth is slowing down, and even plateauing in five years according to many industry practitioners. This is due to the maturing market, especially in the contact center area, and the entry of other countries such as Russia, Latin America, and other low-cost countries.
Growing KPO
The aim of the government though the Center for International Trade Expositions and Missions (CITEM), the export promotions arm of the Department of Trade and Industry, to sustain the growth of the BPO sector. CITEM plans to achieve this not only by enticing more foreign investors to locate in the country for skills-based BPO activities such as finance and accounting, but also to develop “higher-value” BPO called Knowledge Process Outsourcing (KPO).
KPO refers to the outsourcing of high-value complex tasks and processes to specialized service providers. As compared to traditional BPO, KPO delivers ‘knowledge’ or content expertise that demand advanced analytical and/or technical skills and some decision-making or decision-support processes; rather than process expertise that simply involves executing standardized processes. Some examples of KPO are market research services, network consulting and management, data search, integration and analysis, remote education, website services, research and development services, among others.
India and China, the top global leaders in the outsourcing market, are already ahead of our country in the KPO arena. China, with its large pool of scientists, has had a head start in research and development outsourcing. India, on the other hand, holds the lion’s share in the KPO market, forecasted to reach 71 percent or US$12 billion by 2010. This is due to India’s competitive edges in engineering and technology. Indian educational institutions annually churn thousands of professionals that serve the KPO technical services market.
Tapping the KPO market
If the Philippines want to partake of the huge potential of KPO, how then can we compete against the sheer size of scientists, engineers, and technical professionals that India and China produce every year?
The answer lies in the innate creative talents of Filpinos, who are well known globally in may creative industries such as music, arts and dance, crafts, and design. Filipinos are naturally creative as evidenced by the Ifugaos’ widely known Rice Terraces and the “I love you” computer virus created by a Filipino programmer.
The innate competitive advantage of our country, which is the creative minds of its people, can be harnessed by industry and government to carve a niche in the KPO sector, known as creative outsourcing that is hard for other countries to imitate.
Creative outsourcing currently includes animation, developing gaming content and e-learning and e-publishing. But according to Outsource2India, an Indian creative outsourcing provider, other creative services that can be outsourced include illustrations, editing, photography, screenwriting, creative writing, proofreading, cover design, journalistic writing, graphic design, storyboarding, video editing, instructional design, and music composition.
Animation services, a particular creative outsourcing service, has seen a stellar growth these part years, and projected to grow 60 percent until 2010, contributing to $ 800 million in outsourcing revenue.
Identifying Areas of KPO Opportunities
Even India-based BPO OfficeTiger believes in the creative talent of Filipinos. It set up shop in the country as the springboard for its legal services outsourcing and expects to make Manila the main center for creative "pre-media" outsourcing work, including desktop publishing, composition, typesetting, and graphic design.
According to Joseph Sigelman, co-president of OfficeTiger, design work is another place where Filipinos have an edge. He says he has found incredible depth of design talent in Manila; the kind of talent that is hard to come by in Bangalore, Hyderabad, or Chennai.
Digital content production outsourcing is also another area which Filipino creativity comes into play. A fast growing BPO segment growing annually close to 100 percent, our country can capitalize on the Filipino ingenuity in gaming content development and mobile phone content production
Capitalizing on Filipino talent
The opportunities creative outsourcing augurs well with the innate creativity of Filipinos. But the challenge now is how to develop this natural creativity among us, and channel it to capitalize on the vast opportunities before us.
One approach is for existing BPO players to expand their service offerings to include creative outsourcing. This will involve engaging in adjacent creative services, i.e. graphic design for pre-media outsourcing work, and developing this service into a productized creative outsourcing offering.
Another approach is for the local creative industry players, with the help of government, to organize themselves and offer and market creative outsourcing to foreign markets. There are a lot of accomplished local firms engaged in advertising, visual arts, cinema and audiovisual media, literature, and multimedia arts, that can extend their services to clients abroad.
Key to these approaches is an increased supply of creative talents from universities and vocational schools. Fortunately, a number of schools have stepped up to develop the local talent that industry requires.
For example, De LaSalle College of Saint Benilde School of Design and Arts offers courses in animation, digital film-making, multimedia arts, and others. The school has experienced a fast growth in enrollment over the past years, owing to the accolades that the graduates garnered in local and international competitions, and the growing awareness of arts and design among the Filipino youth.
According to estimates by research firm, Evalueserve, revenues from the KPO market will grow globally from US$1.29 billion in FY 2003, to US$17 billion by FY 2010. This implies compounded annual growth rate of 46 percent, for the global KPO market.
-------------------------------
Reynaldo C. Lugtu, Jr. teaches management and marketing courses in the MBA Program of De La Salle Professional Schools. He may be e-mailed at rlugtu2002@yahoo.com or visit his blog at http://rlugtu.blogspot.com
Comments
Regards,
http://www.saibposervices.com/Back_office_services.aspx
Accounting services
-fern-