How the Philippines beat India in call centres

[franc1sgmp]

http://www.economist.com/node/21557350

let me post the entire article. there might be regional restrictions in trying to access the webpage.



IT’S midnight in Manila, and the capital is just waking up to the start of another working day. At the Worldwide Corporate Centre office block, thousands of young Filipinos are crowding into endless open-plan offices. Once seated, they quickly start answering the questions and calming the frustrations of vexed American consumers beginning their own day on the other side of the Pacific Ocean.

These Filipinos are call-centre workers. To outsiders it is hardly a glamorous profession, yet despite the antisocial hours these men and women have every reason to be as well-motivated and cheerful as they seem. They are well paid and know that they work at the heart of their country’s most dynamic industry.

The rise of what is known as business-process outsourcing (BPO) in the Philippines has been nothing short of phenomenal. The very first calls were taken in 1997; today the sector employs 638,000 people and enjoys revenues of $11 billion, about 5% of the country’s GDP. Last year the Philippines even overtook India, long the biggest call-centre operator in the world, in “voice-related services”. The country now employs about 400,000 people at call centres, India only 350,000.

The South-East Asian upstart (population 101m) is unlikely ever to surpass the South Asian behemoth (1.2 billion) across the entire range of outsourcing offerings, which also include all kinds of information-technology services. Yet given the extraordinary growth so far it is hard to gainsay the Philippines’ own projection that its BPO industry could add another 700,000 or so jobs by 2016 and generate revenues of $25 billion. At that point, the industry would make up nearly a tenth of GDP and be bigger in value than the remittances from the 10m Filipinos working overseas.

As in the call-centre business so far, some of these new jobs will come at the expense of India. Yet India’s relationship with the Philippines in back-office work is more complex than the numbers suggest.

The main reason for the success of the Philippine call centres is that workers speak English with a neutral accent and are familiar with American idioms—which is exactly what their American customers want. Of these, many have taken to complaining bitterly about Indian accents (which no amount of “voice neutralisation” coaching seems to have overcome). As a result, the Indian firms themselves have been helping to move jobs to the Philippines by setting up call centres in Manila and other parts of the country. Infosys and Wipro, as well as scores of other Indian firms, now have substantial operations there. And they aren’t drawn to Manila by cheap labour. Wages in the Philippines are slightly higher than in India since the Filipino accent commands a premium.

It also helps that the country has a big pool of well-educated workers. The million or so Filipinos who graduate every year have few other options to choose from, besides emigrating. And working in a call centre is considered a middle-class job (new recruits start at $470 a month).

The big question is whether the Philippine BPO industry, having conquered the call-centre market, can now move up the value chain. To keep growing rapidly—and profitably—it needs to capture some of the more sophisticated back-office jobs, such as those processing insurance claims and conducting due diligence. In these businesses, called knowledge-process outsourcing and legal-process outsourcing, India still rules supreme.

Integreon offers a glimpse of what the future may hold. The firm occupies just a few discreet, very secure offices. It employs 300 people in Manila, 40 of them lawyers who help multinational law firms with litigation. Familiarity with America helps. “It makes it very easy for us to do legal research for American firms,” says Benjamin Romualdez, the firm’s country manager.

This sort of operation is new in Manila, but Mr Romualdez expects that he can find the skilled workers to double his workforce over five years. Western banks have also discovered the Philippines. JPMorgan Chase now has over 25,000 workers on its own payroll in the country, many of whom do much more than answering phones. The Philippines is set to compete with India across the BPO board.

Basically, the article says that the philippines is outdoing india when it comes to BPO's, and asks whether we can up-end India even more when it comes to more sophisticated BPO jobs such as accounting and legal research.

***

Ang kulang saten, and dito naunahan tayo ng India, ay yung mga tinatawag na "IIT's" or Indian Institutes of Technology. Eto yung mga regional technological schools na nagiging pabrika ng mga IT experts. Kumbaga, nagkaroon na sila ng 'intellectual infrastructure' as early as the 1950's and 60's and ngayon lang nila na-a-ani yung produkto ng mga IIT's. (Though on the other hand, naunahan naten ang India pagdating sa wikang Ingles)

Hindi ko alam kung mayron tayong katumbas ng mga IIT's, i guess aside from MAPUA, UA&P or AIM, but the point is, this will be a short-lived victory unless we upgrade our capabilities. Sobrang kulang sa pansin ang mga government-run institutions like TESDA. whereas before nursing yung 'intellectual hotspot', now i guess the trend is going back to IT and comp. eng.

[phurple0515]

^ pero there was a news this weekend that we are actually losing to India on BPO already. 

[akthung]

^ simply put, India is moving up to greener pastures.


parang water station business din yan. there was a time when a lot franchisees of major water station brands sold their businesses. Why did they sell? because P50 per bottle was the last decent price for them.
you have business that employs people, involves delivery vehicles etc...tapos you'll sell below P50.

daig ka pa ni Lola sa palengke who can sell her product at 50 pesos at 100 pcs a day (the very least). she was featured on tv.

ngayon kulang nalang ibigay mo ng libre yung tubig. 

so ganun din dito, hindi porket talo na ang india, eh talo na talaga sila. they've moved up somewhere.
from a certain perspective, tayo ang talo, kasi we failed to see where they've moved.

[phurple0515]

actually one aspect sabi nila is because Peso is getting stronger kaya don sila kung san sila makakamura...pero, pinas pa rin talaga ang gusto ng mga foreigners for BPO kasi nga because of our efficiency in English

[jhandee]

^ simply put, India is moving up to greener pastures.


parang water station business din yan. there was a time when a lot franchisees of major water station brands sold their businesses. Why did they sell? because P50 per bottle was the last decent price for them.
you have business that employs people, involves delivery vehicles etc...tapos you'll sell below P50.

daig ka pa ni Lola sa palengke who can sell her product at 50 pesos at 100 pcs a day (the very least). she was featured on tv.

ngayon kulang nalang ibigay mo ng libre yung tubig. 

so ganun din dito, hindi porket talo na ang india, eh talo na talaga sila. they've moved up somewhere.
from a certain perspective, tayo ang talo, kasi we failed to see where they've moved.

yeah agree , siguro sabi ng india sa inyo na bpo, mas marami pang magandang work sa kanila. lalo yung IT nila. Ang pinas isa sa hindi magandang country na mag invest , dahil na rin disaster prone daw tayo. pero dahil sa bpo maraming may work ngayon kaya god bless call center pa rin

[akthung]

actually one aspect sabi nila is because Peso is getting stronger kaya don sila kung san sila makakamura...pero, pinas pa rin talaga ang gusto ng mga foreigners for BPO kasi nga because of our efficiency in English

i don't believe that the peso is becoming stronger. every year umuuwi ako and lumiliit ang peso. if the peso is indeed strong, the masses should even feel it. people should feel na parang dumadami ang kayang bilin ng 500 pesos. dapat paunti unti, bumabalik sa dati ang halaga ng 500 pesos. now 500 is like 100 pesos noong araw. dati rati maraming naiinis pag may magpabarya ng 500 or even 1000
marami na din kasing Made in China kaya may cushioning effect.

[franc1sgmp]

@ Akhtung: You are answering the Article writer's question "The big question is whether the Philippine BPO industry, having conquered the call-centre market, can now move up the value chain. To keep growing rapidly—and profitably—it needs to capture some of the more sophisticated back-office jobs, such as those processing insurance claims and conducting due diligence. In these businesses, called knowledge-process outsourcing and legal-process outsourcing, India still rules supreme."


And on that I would have to agree. Kulang pa din tayo ng mga workers na mejo nasa itaas ng BPO value chain, like accounting and legal research. Hence, the suggestion that the Philippines should invest more on 'brain-intensive' technolgical institutes na mayroon na ang India noong 1960's palang.

[aquacharly]

I agree with AKTHUNG -- no way are we beating India.   They are just moving up & out of the "labor-intensive" BPO industry.  They now target to compete in higher-margin IT activities.  There is a national drive over there to move up, they don't want to be mere labor-providers daw. 

[nessy]

when you say BPO kasi, napakalawak niyan. kung voice/chat and anything that needs accent/grammar, i can say at par naman na ang Philippines compared to india. Paano ko nasabi? I am working for a BPO indian company and was able to see their English training Module. at masasabi ko lang, kaya pala preferred ng gma American customer and Pinoy. pero when it comes to technical side, wala akong masabi sa India. grabe sobrangtechie ng mga yan. tingin ko, dun tayo naungusan ng India.

[jazzlawyer]

http://www.economist.com/node/21557350

let me post the entire article. there might be regional restrictions in trying to access the webpage.



Integreon offers a glimpse of what the future may hold. The firm occupies just a few discreet, very secure offices. It employs 300 people in Manila, 40 of them lawyers who help multinational law firms with litigation. Familiarity with America helps. “It makes it very easy for us to do legal research for American firms,” says Benjamin Romualdez, the firm’s country manager.

Im one of the first 40 lawyers there. we dont take calls ha.we review legal documents.  but we're considered as Legal outsourcing firm... we were 40 before now we're almost 300 ... lawyers.. workforce grew since I started. I stayed because it pays more than my litigation work less the pressure. So I guess its not just about the voice command in english we possessed thats why foreign firms choose MNL before india. Competitive na din talaga tayo when it comes to this kind of industry 

[akthung]

in a way i doubt that.

why? you see, when my friends and i talk about our profession here in Aus, and we relate our situation to other professions here in aus,

the conversation will always tap on "sending the  work that the company does not need
 offshore" kasi gusto nila maging "lean and efficient."

this is the "lower end" kind of work. hence sobrang laki ang expectation sa mga graduates dito. this is kung napili ka to work for them. gradauate selection program dito ay mala upper executive level sa pinas. and Aus is not the only one doing this.

this scheme also robs the local population of good opportunities. kaya hindi mo masisisi bakit maraming inis sa migrants. but it saves the company a lot of money cuz yung binabayad sa pinas, is not enough to even live a cheap life in their home country. at ang asiano naman, jump to conclusion agad. kasi marami daw tamad sa ibang bansa.

now indians, grabe ang daming magagaling sa kanila dito.  they are everywhere! accounting. law. medicine. dentistry. business. merong pataxi taxi driver lang pero 2 ang negosyo. magaling sila mag delegate.

eh ang pinoy?

maybe sa level na yan mukhang competitive. mukha. but in the greater scheme of things, they have moved to new places and areas...blue oceans ika nga.

pero syempre, to keep on doing business sa pinas, these companies have to motivate you. say good things. give good promises.

[juni]

I don't think we can say for sure na we've beaten India just yet.  Lumalaban pa rin ang India sa BPO, and they're concentrating on more complex and higher paying areas like accounting, legal and medical BPO.  These are areas na dapat tutukan ng Philippines para di tayo malamangan ng India.

[verdenthopes]

good read. hope it doesn't repeat on us with China coming in fast on that industry. oh, and Australia (Telstra) thinks BPOs will disappear soon -- around 2025.