Outsourcing seen to stay despite economic recovery

Outsourcing activities would continue to flourish this year as more companies worldwide would turn to it as an emerging business model rather than just a way to cut costs during a crisis, an IT consulting firm said.

XMG Global Inc. said in a statement on Tuesday that the local business process outsourcing (BPO) industry has benefited from the global economic downturn since many companies turned abroad to slash costs.

Foreign firms increasingly outsourced not only voice services but also back office and knowledge-based processes.

Early last year, the Business Processing Association of the Philippines (BPAP) projected that the industry would expand by 23 percent in 2009, mainly on the back of the strong growth in nonvoice services.

BPAP has yet to release the official 2009 growth figures.

For this year, the Contact Center Association of the Philippines (CCAP) projected that that call centers would grow by 15 percent to 20 percent.

“In the face of global competition, governments of major outsourcing destinations will formulate new rounds of resolutions to improve business environments and promote new investment locations,” XMG said.

The government and local industry groups are promoting the so-called next wave cities, or up-and-coming BPO hubs outside Metro Manila and Cebu to potential BPO firms. Among these areas are Bacolod, Cagayan de Oro, Davao, Iloilo, Lip, Metro Cavite, Metro Laguna, Metro Pampanga, Bulacan East and Bulacan West.

XMG said the global outsourcing industry’s revenues this year would likely reach about $412 billion “with India and China still leading the offshoring segment.”

The local BPO industry had earlier targeted $13 billion in revenues and employment of about one million by this year. –BEN ARNOLD O. DE VERA, Manila Times