Impact of global crisis on BPOs ‘minimal’

Majority of local business process outsourcing (BPO) industry leaders said the global financial crisis had minimal impact on their operations, preliminary results of a recent survey showed.

In a poll conducted by the Business Processing Association of the Philippines (BPAP), Outsource2Philippines (O2P) and TeamAsia, 83 percent of the 160 BPO executives surveyed said the global slowdown had “minor” or “moderate” effects on their operations. Sixteen percent of respondents said the impact of the crisis was “significant,” while 5 percent said the effect was “very significant.”

The survey, which was done, from March 31 to April 29, also showed that about 60 percent of companies affected by the crisis said they introduced new services to tap new revenue sources to mitigate the impact of the slowdown.

“The results of the survey suggest that despite some challenges associated with the global financial crisis, innovative firms are identifying new opportunities as a result of the crisis. This is enabling them to continue growing their businesses,” Gillian Joyce Virata, BPAP executive director for information and research, said.

However, industry growth is further curbed by a shortage in quality labor supply, Virata added.

According to the survey, 45 percent of respondents said their companies hire only six or even fewer out of 100 applicants on the average.

In addition, 79 percent BPO firms said attrition figures have remained the “same,” or is “decreasing” or “decreasing significantly.” Fifty-three percent of respondents said attrition in their companies run 10 percent or lower; 29 percent of respondents said attrition in their firms is between 11 percent and 20 percent; and 17 percent said attrition is above 21 percent.

The complete results of this survey will be released in a breakfast briefing for industry executives entitled, “State of the BPO Industry: Mid-Year Report” on June 16.

In a related development, Supply Chain Consulting, a global provider of enterprise software solutions, said it expects total revenues this year to reach P280 million, about 20-percent higher than last year’s revenues of P230 million.

In a separate statement, the company said this year’s growth projection is, lower than the 35-percent increase in revenues posted last year.

“The financial crisis has incited numerous opportunities for the software industry. At Supply Chain Consulting, we make innovation, provision of high quality software solutions and expert support services a priority. Creating a global footprint for the software industry can increase the revenue of this industry to at least $1.5 billion,” Jan Biezepol, Supply Chain Consulting managing director for Asia, said.

The Philippine Software Industry Association (PSIA) earlier said the sector targets 30-percent growth in revenues this year, lower than last year’s 42-percent growth. PSIA aims to reach $1 billion in Philippine software export revenues and employment in this sector to reach about 60,000 next year. –Ben Arnold O. de Vera, Reporter, Manila Times