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Liceo
Journal
of Higher
Research
Vol. 6 No.
1 December
2009Education
ISSN: 2094-1064
CHED Accredited Research Journal, Category B
Liceo Journal of Higher Education Research
Business and Public Policy Section
An Environmental Scanning of the
IT-Enabled Business Process Outsourcing
Industry in Cebu
AGNES C. SEQUINO, MM
[email protected]
Date Submitted: August 6, 2008
Final Revision Accepted: December 14, 2008
This study focuses the data on the business environment
of IT – Enabled Service Companies in the Business Process
Outsourcing Industry in Cebu. The result of the environmental
scanning activity presents high sustainability of suppliers and
being highly profitable in terms of performance, however,BPO
companies should be more adept with the latest trends in
providing outsourced services and be ready with the uncertainties
particularly in competitor’s strategies. Government support the
BPO Industry sub sectors. Government developmental plans
should match with of the private sector to ensure collaboration of
efforts to tap opportunities. This improves the economic situation
of the country. The dominant factors affecting these businesses
are socio-cultural and demographic factors, however they also
highly affected by Technological factors despite the availability
of infrastructure in Cebu, since most of the BPO companies are
relying on the Internet access to operate. External environmental
factors are perceived to vary depending upon the nature of the
sub sector and the location of the business within the province.
Growth of this BPO Industry can have a significant impact on
employment and eventually on the purchasing power of people.
However, participation of the academe is crucial in improving
human capital to address the shortage of manpower pool for the
industry.
Keyword - Environmental scanning, business outsourcing,
business environment
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INTRODUCTION
The Commission on Higher Education (CHED) through its
higher education institutions (HEIs) is mandated to produce
graduates equipped with skills needed by business and industry.
There is a need to offer relevant programs and quality instructions
that will enable graduates to cater to the demands of a globally
competitive workplace.
Cebu City recently emerged as No. 1 among the Top 50 Emerging
Global Outsourcing Cities list based on a study by CyberMedia’s
Global Services and investment advisory firm Tholons. The study
that placed Cebu on the top ranks was determined by six categories
which included the scale and quality of workforce (including
education), business catalyst, cost, infrastructure, risk profile and
quality of life.Cebu, bested other 50 emerging outsourcing cities
in the world, that include; Shanghai and Beijing in China, Ho Chi
Minh City in Vietnam, Krakow in Poland, Kolkata, India, and
Cairo, Egypt.
As a response to this new development, the CHED Zonal
Research through the Department of Business and Management,
University of San Jose–Recoletos, Cebu City, Philippines embarked
on “An Environmental Scanning of the IT-Enabled BPO Industry in
Cebu”. The objectives of the environmental scanning are to:
• Identify the factors affecting BPO suppliers
sustainability
• Determine the sales performance levels of BPO
companies
• Determine the competitors strategies employed by
BPO companies
• Identify the support and assistance given to BPO
industry by government and other institutions
• Identify the impact of economic, legal and political,
technological and socio-cultural factors to the BPO
industry
• Identify interventions to address challenges
encountered by the BPO industry
• Develop a documentary of the business environment
in the BPO Industry
The purpose of this study is to provide an update on the BPO
industry that will benefit:
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Liceo Journal of Higher Education Research
• Students and community members for employment
opportunities
• Business people, investors and entrepreneurs for possible
business opportunities
• BPO decision makers for strategic planning purposes
• Government and other institutions for linkages and other
support mechanisms
METHODOLOGY
The study made use of the random sampling technique
in selecting BPO companies. The sample was taken from the
total population of Cebu IT-Enabled BPO companies listed and
registered by DTI and CIPC. In cases where companies selected are
not available, alternate companies were drawn at random.
Table 1 below summarizes the total number of respondents
according to major BPO sector. The total number of respondents
covered in this study is 51, majority of which coming from the
call centers with 16 respondents. The rest of the respondents are
from the integrated BPO service with 11, computer aided design &
animation with 10, legal/medical transcription with 9 and finance
& administration with 5.
Table 1 Respondents of the study
BPO Sector
Call Center
Integrated BPO Service Providers
Computer Aided Design & Animation
Legal/Medical Transcription
Finance and Administration
Total
No. of
Respondents
16
11
10
9
5
51
%
31.3
21.5
19.6
17.6
9.8
100.0
Aside from the BPO industry players, other key informants
of the study are the government agencies and other nongovernment organizations. Among the government agencies are
DOST, DTI, DENR, DOLE, LGU, PIA, NEDA, and TESDA. The nongovernment organizations that support the Cebu BPO industry are
134
CEDFIT, BPAP and CIPC.
The gathering and validation of data for this study were done
through:
a. Research Questionnaire and Interview
The participating BPO companies were requested to fill-up a
research questionnaire (refer to Annex_5_). A series of interview
was also done using an interview guide.
b. Focus Group Discussion
A Focus Group Discussion (FGD) was conducted to validate the
responses to the questionnaires previously submitted. A total of 8
BPO companies participated on the said FGD held at the CEDFIT
Training Room.
c. Secondary Data Generation
The sources of secondary materials are from previous studies
made on the Cebu BPO industry, annual reports of government
agencies and publications from the University of Asia Pacific.
Relevant newspaper articles and press releases were also used for
this study.
Attendance in economic fora and symposia was undertaken to
gather first hand information on the latest trends affecting the BPO
Industry.
Industry Overview
A. BPO Sectors
The IT-Enabled BPO industry or sometimes called Philippine
Offshoring & Outsourcing (O&O) industry is classified into 6 major
sectors. These are the Contact or Call Center, Back Office (non-voice
BPO), Transcription (non-voice BPO), Animation, Software and
Engineering/Design Process.
Contact or Call Centers
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Liceo Journal of Higher Education Research
A contact or call center is a centralized office used to place or
receive calls for specific customer activities. The different types
of call center customer interactions are travel services, financial
services, technical support, education, customer care, online
business to customer support, and online business to business
support.
The calls handled by various Philippine call centers are classified
into outbound or inbound calls. Outbound call services cover
telemarketing, advisories, sales verification, credit and collection,
reactivation/reinstatement of accounts, loyalty program benefits,
customer services and order entry. Inbound calls cover a broad range
of services from all types of inquiries, technical help, transcription,
complaints, customer service support, sales, marketing and billing.
Back Office (Non-Voice BPO)
Back office outsourcing refers to internal business functions
done outside the company. This includes HR Outsourcing and
Knowledge Process Outsourcing (KPO) and finance, logistics and
accounting.
HR outsourcing consists of human resources functions such as
training, payroll processing, recruiting, employee relocation, and
benefits administration. KPO services include market research
and analysis, intellectual property management, and finance and
accounting research.
The finance, logistics and accounting transcription covers task
such as accounting and bookkeeping, account maintenance, accounts
receivable collection, accounts payable administration, payroll
processing, asset management, financial analysis and auditing,
management consulting, inventory control and purchasing,
expense and revenue reporting, financial reporting, tax reporting,
and other finance-related services such as financial leasing, credit
card administration, factoring and stock brokering; as well as for
logistics management, and cargo shipment management.
Transcription (Non-Voice BPO)
The major areas of transcription include medical, legal
transcription.
The medical transcription covers tasks such as medical reports,
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discharge summaries, operative reports, therapy/rehabilitation
notes, chart notes, and hospital and clinic reports.
The legal transcription scope of work of includes verbatim voice
dictation, letters, opinions, court documents, testimony hearings,
conferences and day to day business.
Animation
Computer animation services range from full 2D to 3D
animation, pre-production to post-production. These include lay
outing, in-betweening, clean-up, digital background production
using scanning, pre-compositing, color styling, special effects,
digital ink and paint application, flash animation and web design,
and graphic and art design techniques.
Software Development
Software development may include research, new development,
modification, reuse, re-engineering, maintenance, or any other
activities that result in software products.
Engineering/Design Process
Engineering/design process includes design and development
of engineering products, product testing and improvement, and
applied research.
B. Philippine BPO Industry Growth Trends
According to the BPAP Chief Executive Officer, recent
developments indicate that the BPO industry has experienced
tremendous growth. Table 2 below shows a 50% average growth
rate for the past 3 years in terms of revenue on all BPO sectors.
In this 2007 data, contact centers contributed the highest value at
$3,600 million, followed by software development at $423 million,
then by back office at $398 million. The same ranking in terms of
revenue contribution was experienced in 2005/2006 (refer to Table
3).
Table 2. Philippine O&O: Growing all sectors at tremendous rate
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Liceo Journal of Higher Education Research
Table 3. BPO Industry in the Philippines, 2005/2006
138
According to BPAP/McKinsey Team Analysis (refer to Table
4 below), the foundations of the Philippines’ success in the BPO
industry according to rank are: suitable and abundant talent,
operational performance, quality infrastructure, and conducive
business environment.
Table 4. The foundations of the Philippines’ success
C. Cebu BPO Industry Growth Trends
The Philippines can potentially achieve US$12B in revenues
by 2010 delivering economic gains to numerous stakeholders and
employ about 600–700 thousand people. The challenge for Cebu
is to serve a 20% substantial share of this national target. (Sanez,
Sunstar Economic Forum Aug.2008)
According to CEDFIT, Cebu has many of the ingredients to
succeed. Among which are:
• 21 IT parks and buildings; 2nd largest concentration in the
country
• World-class Telco infrastructure; fully redundant, managed
lines
• About 15% savings in wages versus NCR
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• Challenge in fast-tracking development of middle managers
to offset cost of importing experienced managers from NCR
• Leadership from provincial and city ICT councils in such areas
as IT education, Telco infrastructure, IT Parks and property
development to cater to O&O industry requirements
• CEDFIT leading collaborative work with industry
associations like BPAP in promoting investments in and
over-all mission of the O&O sector
CIPC stated that investments in Cebu BPO industry remained
high. Major service providers such as Convergys, Sykes, and
eTelecare, Teletech, IBM, People Support, Accenture and Wipro
have established Philippine operations in Cebu.
Cebu’s Asia town IT Park, the country’s 2nd largest IT industry
concentration, currently has around 15,066 employees with an
estimated total annual compensation of more than PhP1.4 billion.
With the second building of Primary Industrial Properties Corp.
(PIPC) due for completion, investments and employment are
expected to rise.
A number of existing BPO companies are considering expansion
plans or have expanded operations in the region since the first
quarter of 2007. Some of these companies include:
• People Support, and IT firm operating inside Asiatown,
reported that it would need another 1,600 seats for its
expansion plans
• Epson is looking at expanding its facility to accommodate an
increasing workforce
• InfoWeapons, has been doubling its number of personnel
every month
• Teletech, a global BPO company that provides full range
of front-to-back office outsourced solutions, opened its
Customer Management Care Center at Oakridge IT Center
in Mandaue City. The Cebu facility of Teletech has more than
700 seats and will have more than a thousand employees
• Sykes Cebu inaugurated its new building called Synergies IT
center. The new Sykes building houses the company’s data,
telephony, and security technology facilities. Sykes Cebu
began operations with 15 people in 2003. It now has 1,700
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seats that assist the company to provide outsourced customer
contact management solutions and services to clients.
• Exist Global, which develops open source software solutions
for various companies in the United States and Europe,
transferred to a bigger location in Asiatown IT Park in
anticipation of expanding operations in the region within the
year. The company has already secured venture financing to
accelerate its growth and plans to hire 50 to 70 more software
engineers.
RESULTS AND DISCUSSION
The different aspects covered by this study are: Supplier
Sustainability, Sales Performance Levels, Competitors’ Strategies,
Government Support and External Factors such as economic,
political and legal, technological, and socio-cultural and
demographic. The succeeding tables present the data taken from
the Cebu BPO firm respondents. The summary of results was based
on the average rating of all the respondents. The range of rating
from highest to lowest is as follows: 5 – Strongly Agree; 4 – Agree;
3 – Somewhat Agree; 2 – Disagree; and 1 – Strongly Disagree.
Supplier Sustainability
In this particular study, supplier refers to organizations
that provide human and material resources for BPO companies.
Supplier sustainability is the extent in which these organizations
continuously offer their products and services in order for BPO
companies to achieve its objectives.
Table 5 below presents the degree of suppliers’ sustainability
as perceived by the representatives of the BPO firms covered in the
study.
An average rating for all items of 3.89 is considered a high
level of sustainability. This indicates that there are not much issue
concerning the supply of food, materials, manpower and other needs.
Among the highest contributing factors are good relationships with
BPO companies, legal and moral business activities and availability
of suppliers’ workforce.
Table 5. Degree of suppliers’ sustainability
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Liceo Journal of Higher Education Research
Average
FACTORS
1
The supplier has maintained a good relationship with client
Rating
4.14
company
2
The supplier is legally and morally performing economic
4.06
business activities
3
The supplier has the workforce to provide timely service
and goods at specified periods.
4
The supplier is responsive to changes or revisions on
products and services as required by the client company
5
The supplier has the expertise and skill to provide the client
company with the expected service excellence
6
3.98
3.96
3.93
The supplier is able to provide the required number of
human resources according to or based on the
3.89
specifications
7
The supplier has provided the client company with a steady
flow of supply of products and outputs based on accepted
8
9
10
11
3.87
standards
The supplier is aware of their responsibilities to society
The supplier provides competitive price
The supplier provides incentives to regular clients
3.83
3.75
3.74
The supplier has the capability to continuously serve the
client company with the required volume of
3.64
products/service
Average Rating for all items
3.89
A closer look at the items on the lower levels which might
be the source of potential problems for the BPO industry was
made through follow- up interviews with the respondents. Some
respondents state minor concerns on the following areas:
• deteriorating quality of deliverables for continuous
orders
• delays in delivery of materials
• mismatch in the provision of manpower
competencies with requirements
Other respondents indicated problems encountered that were
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addressed by their respective companies. Among which are:
• Manpower incompatibilities – additional training on
personnel weak areas were provided
• Shortage of supply for raw materials – canvass for other
vendors to become suppliers
As regards manpower supply, the BPAP Chief Executive Officer
stated that Cebu is far from saturation point due to the following
factors:
• Over 18,000 college graduates annually
• Abundant pool from O&O critical courses i.e.
Business(8,000+), Engineering and IT(5,600+), Math and
Sciences (2,800+), Fine Arts (83), Medical services (2,800)
• Major schools such as USC, USJ-R are Centers of Excellence
for Business and have partnerships with the BPO industry
• Can attract workers from Visayas and Mindanao provinces
Some of the major material resources suppliers are:
• Hewlett Packard – provides commercial products such as
notebooks and desktops for call centers.
• HP Solutions Center – provides IT infrastructure and
solutions to call centers and animation.
Sales Performance Levels of IT–Enabled BPO Firms
BPO customers expect high level of quality, low cost and on time
delivery of results. The sales performance level of BPO companies
is a manifestation of the capability to provide excellent services to
their clients.
In this study, the respondents were requested to compare 2007
and 2008 revenue in order to come up with the sales performance
levels. Figure 1 summarizes the percentage increase in revenues of
BPO companies.
Figure1. Performance Levels of IT-Enabled Service Provider
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Liceo Journal of Higher Education Research
The above data shows that 34% of the BPO respondents have
increased revenues from 20% to 40%. This uptrend in revenues
implies the high level of customer satisfaction for outsourced
services.
Competitors Strategies
BPO firms formulate and implement strategies to offer updated
services and products that will exceed customers’ expectations.
These strategies are implemented at the organization, business unit
and functional levels.
Overall survey results tabulated in Table 6 below shows the top
5 competitors strategies are: Growth strategies, Strategic alliances
among competing companies, Restructuring for improved
performance and efficiency, E-business strategy and Diversification
of operations in different areas. The survey indicates that the lesser
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strategies that BPO companies will resort to are: Downsizing and
Divestiture.
Interviews revealed that BPO companies:
• are dependent on internet access for its operations
which is an e-business strategy
• provide the best possible compensation and benefits
to employees in order to retain qualified people and
not lose them to competitors abroad
• experience local competition in hiring the most
qualified manpower pool
Table 6. Competitors strategies
Rank
1
2
3
4
5
6
7
8
9
Strategies
Growth strategies (involve expansion of current
operations)
Strategic alliances (cooperative strategy between
companies, particularly in technology and marketing )
Restructuring (changes the scale or mix of operations
to gain efficiency and improve performance)
e- Business strategy (use of the internet to gain
competitive advantage)
Diversification (acquisition of or investment in new
and different areas)
Concentration (where expansion is within the same
business area)
Vertical integration (acquiring suppliers or
distributors)
Retrenchment (reducing the scale of current
operations)
Downsizing (decreasing the size of operations to be
more streamlined)
Frequency
48
36
35
33
32
29
21
12
9
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10
11
Divestiture (sells off parts of organization to focus
attention and resources on core business areas )
Others pls. specify
TOTAL
6
3
264
Government and Non-Government Support
Various government agencies from the national to the local
level have provided assistance to BPO industry that allowed them
to explore opportunities for growth. Figure 2 presents a summary
of government support experienced by BPO respondents. The
ranking of government assistance according to percentages based
on total respondents are as follows:
•93% from DTI
•64% from TESDA
•50% from DOLE
•33% from NEDA
•31% from DOST
•31% from PIA
•29% from DILG
Government assistance to BPO companies is classified into:
Technical, Marketing, Logistics, Training, Financial and others.
Figure 3 shows a comparative summary of support from the
different government agencies.
1. DTI – provides mostly marketing and technical support with
some training, logistics and other assistance. Aside from these,
DTI through NERBAC offers a one-stop business registration and
licensing which facilitates processing and documentation of all
requirements for establishing business enterprises.
2. TESDA – provides mostly training and technical support with
some logistics, marketing and other assistance. It offers necessary
exposure and accreditation to allow more people to fill in the gap
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brought about by the demand for more skilled workers to handle
specific tasks.
3. DOLE – provides mostly training and marketing support with
technical, logistics, financial and other assistance. Specifically, this
government agency assists the BPO industry in social protection,
registration of legal workers, information dissemination and
linkages with other agencies (especially funding organizations).
4. NEDA - provides technical, marketing, logistics training and
financial assistance (through linkages with financial institutions).
Specific support to BPO industry includes providing relevant
macroeconomic figures and economic situationers to come up with
workable strategies. NEDA also assists other agencies and LGUs in
the planning and review of programs to hasten implementation of
government services to the business sector.
5. DOST – provides training, marketing, technical, logistics and
other assistance. This government agency implements Small
Enterprise Technology Upgrading Program (SETUP) that assists
SMEs in technology transfer for facilities upgrading and be more
globally competitive.
6. PIA - provides training, marketing, technical, logistics and other
assistance. Specifically, this agency promotes programs and hold
dialogues to discuss and clarify issues concerning the different
sectors of society.
Type of Government Assistance Provided to BPO Firms
1. Cebu Investment Promotions Center (CIPC) – conducts trade
missions on the different parts of the globe. It provides initial
negotiations with investors prior to setting up of businesses in
Cebu.
2. Business Process Association of the Philippines (BPAP) – provides
the following initiatives to sustain a continuous supply of talents
for the Philippine BPO industry.
• Develop a comprehensive assessment and training program to
help improve suitability of talent for the industry
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Liceo Journal of Higher Education Research
• Develop standard competency tests
• Improve training programs for near-hires and middle
management
• Develop training programs for faculty and trainers
• Increase awareness of O&O among potential applicants
• Help create the right environment for industry growth
3. Cebu Educational Development Foundation for Information
Technology (CEDFIT) – provides proactive intervention to bridge
the gap between the industry and the academe. The focus is on
Human Resource development with the right quality and quantity
to serve both low value-added as well as the high value-added BPO
operations.
External Factors affecting the BPO Industry
The external factors affecting the BPO industry is an important
aspect of this study to spot emerging trends that may either be
source of threats or opportunities. These factors were subdivided
into Economic, Legal and Political, Technological and SocioCultural.
1. Economic Factors
Table 7 presents the Economic Factors affecting the Cebu
BPO Industry. The average rating for all factors at 3.15 indicates
the moderate effect of economic factors to the business. Among
the factors that generate a slightly high level impact are inflation;
growth of economy; current income, prices, savings, debt and credit
availability; and rising economic power.
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In the interview conducted, the impact of the economic factors
to the BPO business operations was supported by 2 types of
viewpoints, those who considered these economic factors ---- 1) as
an opportunity and 2) both as an opportunity and threat
1.Comments for those who regarded the economic factors as
an opportunity cited that:
• Growth of the European and US economies are considered
an opportunity since more outsourced services will be needed
thereby giving hints to explore untapped markets and shift to
other target markets
• The company is capable of exploring the opportunities
particularly the rate of growth of the economy driven by the
coming in of more call centers which are in need of ready supply
of qualified manpower
• Considered as major sources of opportunity. The existence of
new markets would be of great help. There are no threats perceived
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as long as there is a system and a good set of strategies
2.Comments for those who regarded the economic factors as
both an opportunity and threat stated that:
• The emergence of China as a new market is a direct threat,
however the growth of global brands creates opportunities.
• Affected by growth of the US economy as it is considered both
as opportunity and threat i.e. an opportunity because, when dollar
rate is higher, billing rate goes down, so customers are happy but it
becomes a threat because when the dollar rate is down, billing rate
goes high which is bad for business
• The new labor force has seen the BPO Industry as a way to
earn better wages, thus allowing increases in the buying power.
However, the downside is the lack of career planning. The
tendency is to jump to the highest bidder which has become a
problem. This has been addressed by educating the workforce on a
deeper understanding and how to plan their careers for sustainable
industry growth
• More concerned with the economic situations of the countries
they serve rather than the country’s economy
2.
Legal and Political Factors
There are a variety of legal and political factors that concerns
BPO firms. One of which is the capability of the local and the
national government to implement programs and projects that will
enhance the marketability of services to global prospective clients.
Another factor is the red tape involve when BPO firms apply for
permits and certifications from different government agencies.
Table 8 presents the legal and political factors affecting the BPO
industry. An average rating of 2.95 for all factors indicates that
respondents were moderately affected by these legal and political
factors. Among the factors that highly affected the BPO firms were:
changes in tax laws; world oil, currency and labor markets; and
import/export regulations.
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Table 8. Legal and political factors affecting the BPO industry
Responses to clarifications on the legal and political
implications to the BPO industry are as follows:
• Changes in tax laws and special tariffs are considered a
threat. Any change in government regulations and policies
would have a great impact to organization planning and
implementation
• Foreigners operating business here have to remain apolitical.
There is a need to be careful with media exposure on the
peace and order situation in the Philippines. This is to assure
clients from other countries that the company will be able to
consistently provide the needed services.
• There is just too much red tape in the government. Had
there been enough support from the government on the
application of automated systems in their services, it could
have hastened the delivery of services.
• There must be a sense of urgency on the implementation of
plans and programs of the Commission on Higher Education
(CHED) to respond to the needs of the industry. If they exist
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to assist the academe in the accreditation of programs, it has
to be within a time frame that these programs are going to be
needed and not after it has become obsolete and useful for
the industry.
• Greatly affected by legal and political factors in providing
manpower services. This includes conformance to the
provisions on labor standards, clearance requirements to
participate in private or public bidding and no pending cases
with DOLE and NLRC.
• There is a need for a deeper understanding of the regulatory,
human resource (HR) and infrastructure environment. The
major concern on HR is a better talent pool and educational
system.
3.Technological Factors
Table 9 presents the Technological factors affecting the Cebu
BPO industry. The average rating for all technological factors at
4.04 indicates that the respondent companies have been affected to
a great extent. Among the factors that largely influence this rating
are: availability of technological resources, degree of technological
change, current trends and changes in technology and level and
rate of technological investments.
Table 9. Technological factors affecting the BPO industry
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(Table 9 continued)
• Still hopeful that the Philippines is heading towards the
capability to provide the needed infrastructure, considered as
one of the priority areas by the government
4. Socio–Cultural Factors
Table 10 presents the Socio–cultural and Demographic Factors
affecting the BPO Industry. An average rating for all factors of
3.44 indicates that these factors affected the respondents to a great
extent.
The factors that highly affected the respondents are traffic
congestion, waste management, view towards risk taking, attitude
towards careers, pollution, attitude towards customer service, skills
and competencies of workforce, attitude towards business and
levels of education. Respondents elaborated that the new hires lack
the capability to perform assigned tasks resulting to high training
costs which led them to mention that programs offered by the
academe does not match the needs of the industry.
Customs and traditions such as fiesta celebrations affect the
attendance of employees and disrupt the workflow of BPO business
organizations.
Table 10. Socio–Cultural & demographic factors
affecting the BPO industry
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(Table 10 continued)
Conclusions and Recommendations
Based on the findings it can be noted that high sustainability
of suppliers indicates the suppliers’ capability to be sensitive
to the customer’s demand. A few problems were met by the
respondents however these were deemed insignificant. IT –enabled
service providers in the BPO perceive their performance levels as
increasing by mostly 20 – 40 % and was deemed acceptable in terms
of customer’s satisfaction. The IT – enabled service providers in the
BPO Industry are aware of their competitor’s strategies and are
likely to adapt if not outperform them in terms of providing the
best products and services.
As service providers, DTI as an agency has provided the BPOs
the highest volume of government assistance. Depending on the
segment of the industry, there are differences in the factors that
affect the way the respondent companies are affected by the varied
external environmental factors which are fast changing.
The macro environmental factors that highly affected the
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operations of the the IT – enabled service providers in the BPO
Industry are the socio- cultural factors particularly, the worker’s
attitude towards work and careers, levels of education, attitude
towards risk taking and the skill and competencies of workers.
Moreover, these service providers are very highly affected by
availability of technological resources. These factors vary depending
upon the differences in organizational culture and also of the
government support in terms of improving infrastructure and the
capability of the host country to cope with industry requirements
particularly in upgrading technology and improving the human
capital.
The Cebu Educational Development Foundation for Information
Technology (CEDFIT) and the Business Processing Association of
the Philippines (BPAP) as non government organizations providing
assistance to the IT- enabled service providers have played a great
role not only in enhancing the skills of IT professionals through the
trainings conducted but have immensely contributed to the growth
of the industry in the country. Through the initiatives, programs
and projects undertaken by these organizations to promote the
country’s capability to be the IT hub in Asia, not only were we
recognized as a major competitor to India but as one if not the most
attractive outsourcing destinations in the world.
Based on the preceding sections, there is a great potential for
the Cebu BPO industry that will translate into US$2.4B in revenues
and 140 thousand employees by 2010. This opportunity is based on
the following:
• Investments has remained high
• Emergence of new global market
• Existing BPO companies have expanded operations or have
expansion plans
• Availability of IT Parks and property development that caters
to O&O industry requirements
• World-class Telco infrastructure
• Abundant pool of personnel supply from Visayas and
Mindanao provinces taking up O&O related courses
The economic impact of this business not only to Cebu but to the
entire Philippines cannot be overlooked. Thus, there is a need for
strong linkages with BPO firms to support the Cebu BPO industry’s
sustainability and growth.
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A. CHED’s Role in the BPO Industry
For CHED, this project is an initial step to determine the areas
of support in collaboration with the Cebu BPO industry. The most
evident of which is to address personnel qualifications to generate
a ready supply of personnel pool that will match the BPO industry
competencies. As indicated in the previous sections, the personnel
demand for Cebu BPO industry is in the field of:
•
•
•
•
•
•
call centers
HR and knowledge process outsourcing (KPO)
medical, legal, and finance/logistics/accounting transcription
computer animation
software development
engineering/design process
Based on these personnel demand, CHED needs to focus
programs on:
1. Verbal and written language proficiency in English and other
languages as well which serves as basic requirement for
the BPO industry. Proper communication skills have to be
included such as e-technology etiquette, appropriate use of
words and tone of voice.
2. Upgrading of business-related courses to support back-office
operations to include hands- on in human resources functions
and basic skills in accounting and finance administration.
3. Enhancement of competencies in market research and
analysis, business planning, technical writing, and intellectual
property management to support KPO services.
4. Improvement of colleges and university facilities that will
allow hands- on experience on transcription services on
different areas of study.
5. E-commerce solution application of fine arts, engineering
and information technology courses
6. Entrepreneurship and behavioral skills of students that will
help them manage responsibly their careers, lifestyles and
personal finances once they become BPO practitioners
Aside from these programs, CHED has to closely collaborate
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with Cebu BPO experts on curriculum development based on the
needs of the industry. Tertiary level faculty need to undertake BPO
immersion programs in order to fully understand and experience
the intricacies of the industry. At the same time, professionals on
particular BPO sector can be sought as resource consultants or
career mentors.
The rapid changes in technology have immediate effects on
Cebu BPO industry, thus the need for CHED to implement these
programs at the soonest possible time.
B. Other Areas of Support and Collaboration with the BPO
Industry
Despite the numerous opportunities for the Cebu BPO industry
in the global market, there are some challenges that need to be
addressed. Among which are the:
1. Careful consideration of BPO industry human and material
suppliers on the completeness, quality and on-time delivery
of their products and services. This will ensure available
materials and compatible personnel complement to the BPO
companies.
2. Close collaboration among BPO companies, existing and
prospective suppliers for mutually beneficial business
relationships. This may be in terms of service performance
enhancement and updates on technology trends.
3. Planning out of strategic measures by BPO companies to
counter uncertainties on external economic environmental
and global competitiveness.
4. For BPO companies to work on quality certification and to
ensure data security and international property protection
5. Responsible media exposure on political environment so as
not to alarm existing and prospective customers of BPO
companies. This is also one of the major considerations of
BPO investors.
6. Information dissemination to educate people on the
different BPO services to broaden their views on career and
entrepreneur opportunities available in the BPO industry
7. Collaboration among government, non-government
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Liceo Journal of Higher Education Research
organizations, educational institutions and other companies
on improvement of human capital policies. This will allow
continuous development of human capital.
8. Alignment of government developmental plans with that of
the BPO industry to ensure collaborative efforts in tapping
opportunities. Other areas for consideration are improvement
of government system transactions and regular updates on
government support to the BPO industry.
9. Continue promotion of Cebu’s capability as an IT hub and
as one of the most attractive outsourcing destinations in the
world.
ACKNOWLEDGMENTS
This CHED GIA funded study was a truly collaborative effort. Led by the
University of San Jose - Recoletos, the process commenced in March 2008. Dr Victorina Zosa,then the Director of the CHED Zonal Research Center in Region 7 gave
the go signal to the researcher having been given the approval from the Commission on Higher Education in Manila represented by Secretary Romulo Neri. It
was followed through by the incumbent Director,CHED Zonal Research Center at
USC, Dr. Elizabeth Remedio when she took over in June 2008.
Rev. Fr. Anthony A. Morillo, President , University of San Jose – Recoletos and
Rev. Fr. Roderick Salazar, President of the University of San Carlos signed the contract allowing the project to be undertaken by the researcher. Rev. Fr. Ferdinand
Fornilos, Vice President for Academics, USJ-R gave the permission for subject deloading. Dr. Audrey Barbara Bucad, Director of the Human Resource Management Office, USJ-R prepared the MOA between the researcher and the university.
Dr. Ferdinand Y. Tomakin, Director of the Center for Research and Development ,
USJR offered his support to oversee the whole project.
Mr. Wilson Ng, CEO and President of the Ng Khai Group of Companies and
Mr. Bonifacio Belen , Executive Director, Cebu Educational Development Foundation for Information Technology served as consultants. Special gratitude is credited
to Mr. Belen for assisting the researcher not only as consultant but also in the data
gathering by allowing the CEDFIT secretary to email the questionnaires to the IT
companies involved in the study. Hard copies of questionnaires were also personally distributed by student assistants Farah Fawzia Zarooq, Giselle Cero, Sheena
Hijastro and Willly Delute to firms who failed to respond through the email. Miss
Violeta Viajar, manager of VLV Travel and Tours coordinated with firms involved
after the research instruments were distributed facilitated the follow up interviews
conducted by the researcher.
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