Representing the Country s BPO & IT-Enabled Services Industry Mr. Bong Borja Chairman
Business Processing Association of the Philippines Private sector-led organization representing the six (6) different sectors of the BPO and IT-enabled service industry and their support industries One-stop information and advocacy gateway Formed from the merger of the Contact Federation Philippines & Outsource Philippines Created to give the Philippine BPO industry a single point of contact for the world Current Membership Updates - 144 company members and 4 association members (CCAP, PSIA, MTIAPI, ACPI).
State of the Philippine BPO Industry Industry Overview - Contact Center - Business Processing (Back Office Operations) - Medical & Legal Transcription - Software Development and Maintenance - Animation Industry - Engineering Design Projections for the next five years Current & Future Potential Attractiveness New opportunities and challenges for the industry. Current Agenda & Initiatives
Contact Center Industry As of 1 st Quarter, 2006 Still the fastest growing industry in the Philippines Contact Centers in the Philippines: 114 Total Full Time Employees: 145,000 Total Seats: 80,000 Estimated Revenues in 2005: US$ 1.7 Billion With a Growth Rate for 2005: 90%
Contact Center Overview YEAR No. No. of of Call Call Centers Centers Est. Est. No. No. of of Seats Seats Est. Est. No. No. of of Employees Employees EST. EST. REVENUE REVENUE (US$ (US$ Million) Million) 2000 2000 4 1,500 1,500 2,400 2,400 24 24 2001 2001 13 13 3,500 3,500 5,600 5,600 56 56 2002 2002 31 31 7,500 7,500 12,000 12,000 120 120 2003 2003 60 60 20,000 20,000 32,000 32,000 320 320 2004 2004 72 72 45,000 45,000 67,000 67,000 800 800 2005 2005 105 105 70,000 70,000 112,000 112,000 1,700 1,700 Key Players in the Country: Third Party Providers: Sykes, Convergys, PeopleSupport, Clientlogic, epldt Parlance, ICT Group, Ambergris, Teletech, etelecare, Genpact, Sutherland etc Captives: Dell, AOL, JPMorgan, Siemens, HSBC, AIG, Citibank, Shell, Deutsche Bank, TrendMicro, etc..
Business Processing (Back Office Operations) As of 1 st Quarter, 2006 No. of Service Providers: 62 Total Full Time Employees: 22,500 Estimated Revenues in 2005: US$ 180 Million With a Growth Rate for 2005: 80%
Business Processing (Back Office Operations) Key Players in the Country: Captives: AOL, AIG BPSI, Chevron Texaco,HP, HSBC, Procter & Gamble, Flour Daniel, Henkel Financial Services, Deutsche Bank, Citibank Crescent Services, Shell Shared Services, Manulife, Alitalia, Watson Wyatt, etc Third Party Providers: Accenture, American Data Exchange, SVI Corp, SPI Technologies, DAKSH eservices, The Environments Collaborative, Eximius BPO, BayanTrade Dotcom, etc
Business Processing (Back Office Operations) Current Services: - Accounting and bookkeeping - Legal Transcription - Account maintenance - Litigation Support - Accounts receivable collection - Content Development - Accounts payable administration - Contract Summarization - Payroll processing - Publishing - Asset management - Travel Services Back Office - Financial analysis and auditing - Loan processing - Inventory control and purchasing - Health Insurance - Expense and revenue reporting - General Insurance - Financial reporting - Sales and marketing - Human resources administration - Tax reporting - Customer Management - Financial leasing - Credit card administration - Transaction management - Factoring and stock brokering - Sourcing and Procurement - Revenue management - Logistics - Transaction processing - Disaster recovery - Business data processing - Business Intelligence - Database management - Network management - Supply chain management - Warehouse and inventory Mgmt Arising Services: (KPO) - Market Research and Analysis - Intellectual Property Management -
Medical & Legal Transcription Services As of 1 st Quarter, 2006 (Medical Transcription) Total MT Firms: 57 Total MT Schools: 13 MT Professionals: 5,500 employed Estimated Revenues in 2005: US$ 70 Million With a Growth Rate for 2005: 80% Performance Level: 98 99% accuracy rate, with a turnaround time of 12 to 24 hour Key Players in the Country: edata Services, SPI Technologies, SVI Corporation, Medscribe Asia, Transkripsyo Inc., Total Transcription Solutions, Inc., Dictation Source, Pilipinas Data Contracts Corporation, etc
Medical & Legal Transcription Services As of 1 st Quarter, 2006 (Legal Transcription) Total LT Firms: 9 LT Professionals: 450 employed Estimated Revenues in 2005: US$ 6 Million With a Growth Rate for 2005: 50% Key Players in the Country: Quisumbing Torres, SPI Technologies, SVI Corp., CD Asia, Inc., Medscribe Asia, etc
Software Development Industry As of 1 st Quarter, 2006 Software Development Companies: 300 Total IT professionals: 16,000 Estimated Revenues in 2005: US$ 204 Million With a Growth Rate for 2005: 40% Key Players in the Country: Accenture, Headstrong, Microsoft, IBM Solutions, Jupiter Systems, Oracle, ADTX Solutions, Gurango, Sun Microsystems, Intel Microelectronics, NEC, etc
As of 1 st Quarter, 2006 Animation Industry Total animation studios in the country: 40 Twenty (20) years in the Philippines Total Full Time Employees: 4,500 Est. Revenues in 2005: US$ 40 Million With a Growth Rate in 2005: 25% Capabilities: -2D -3D - Interactive Gaming (PC Gaming & Console Games) - Medical Animation
Animation Industry Key Players in the Country: Holy Cow! Animation, Artfarm Asia, Digital Exchange, Top Draw Animation, Toei Animation, Top Peg Animation and Creative Studio, Creative Asia, Geebo Digital, Toon City, etc Flicks Outsourced to the Philippines: Tom & Jerry, The Jetsons, Adams Family, Scooby Do, The Mask, Dragonball Z, Lilo & Stitch, The Incredibles, Dexter Laboratories, Power Puff Girls, 1 Piece, etc
Engineering Design Industry As of 1 st Quarter, 2006 Total Number of Engineering Design Companies: 14 Total Number of Full Time Engineers: 2,800 Estimated Revenues in 2005: US$ 48 Million With a Growth Rate in 2005: 30%
Engineering Design Industry Key Players in the Country: JGC Phils., Fluor Daniel, Bechtel, Tsuneishi, Kajima Corp, Parsons, C & E Corp, EEI Corp, Eichleay Pacific, Inc., Hyundai Engineering, Foster Wheeler, Kellog, Brown & Root, Bouygues Construction, etc Capabilities: - Over 75,000 licensed professionals (For the period 1995-2000 alone) - 40,000 graduates of engineering courses annually (CAD-Enabled) - High level of technical expertise in engineering design (JGC & Fluor Daniel) - Practice of internationally accepted engineering standards CAM (Computer Aided Mfg) and CIM (Computer Integrated Mfg)
2005 Summary of Milestones and Accomplishments 1) Senator Mar Roxas introduced Senate Bill No. 2071 to help boost the Philippines Global Outsourcing Industry, which proposes to amend the Labor Code of the Philippines to benefit both the companies and their employees. 2) Due to the industry s unified effort with the Board of Investments (BOI) of the Philippine Government we are at the final stages for the completion of the Data Security & Privacy Law/Guidelines which will be adopted into the ecommerce Law for full implementation. 3) The launching of the Philippine ICT Cyberservices Corridor in the different provinces of the Philippines that enables them to be ready for incoming or expanding locators. 4) Completion and Implementation of the Standards for each sector of the BPO/ITES Industry for assessment and certification for the Philippine Human Resource.
2005 Summary of Milestones and Accomplishments 5) The Philippine ITES Industry-Academe Summit held last June 2005 in trying to bridge the gap between the industries requirements and the academes curriculum. 6) Philippine presence in Outsource World Europe and New York last year in showcasing the capabilities of the Philippine BPO/ITES Industry. 7) Collaboration between the Philippine Government and the Private Industry in insuring and strengthening the supply of quality human resource for the rapid demand of the Philippine BPO/ITES Industry.
Current & Future Potential Attractiveness Current Geographic Spread: Metro Manila (Makati, Ortigas, Quezon City - Libis, Alabang) Cebu City Clark, Pampanga Baguio City Dumaguete City Davao City Hot Spots (For expansion): Ilo-Ilo City Bacolod City Cagayan de Oro City Lipa City, Batangas Naga & Legaspi City Tacloban City Subic
New Players and Transactions 2005 January: Telus of Canada & Singapore Computer Systems acquire 70% of Ambergris for US$ 30.45 Million. March: SPI Technologies Inc. acquires India-based KG Information Services and Technologies Private Ltd. s medical transcription business. April: Deutsche Knowledge Services (DKS), a wholly owned subsidiary of the Deutsche Bank Group, establishes a shared service center in the Philippines, and aims to scale up to 500 employees by mid-2006. May: New York-based Sutherland Global Services sets up a 1,000 seat BPO Operations in the Philippines. June: JP Morgan sets up a 600 seat call center to cater to credit card customers in Philamlife Tower, Makati City, Philippines. August: DELL establishes its own contact center in the Philippines and starts with an initial 700 agents to reach 3,000 agents by the end of 2006.
New Players and Transactions 2005 October: The Resource Group (TRG) locates to the Philippines and acquires Callworx. TRG currently has 900 seats and plans to hit 3,000 seat by the end of 2006. October: HP expands its BPO operations in the Philippines with the new Global Delivery Center in Ortigas that can house over 200 employees. October: IBM Daksh expands its Business Transformation Outsourcing (BTO) operations in the Philippines in Eastwood, Quezon City. November: Manulife confirms there plans to do their back office operations in Philippines to start with 250 seats and expand to 1,500 seats by the end of 2006. December: Siemens locates to the Philippines and starts up with a 600 seat Call Center, located at Eastwood, Quezon City.
Current Philippine BPO Ranking neoit: Currently ranks the Philippines 2 nd in terms of attractiveness in doing BPO/ITES Services. A.T. Kerney: Ranks the Philippines No. 4 for 2005 from the No. 6 rank in 2004 in attractiveness in doing Business Processing Outsourcing work. McKinsey & Co: Ranks Philippines in the Top 3 in terms of cost basis in attractiveness in doing Business Processing Outsourcing.
Projections for the next five years IT & IT-enabled Services (Source: BOI-CICT-BPA/P) Employees 2004 2005 2006 2007 2008 2009 2010 Contact Center 64,000 112,000 179,200 259,800 337,700 422,100 506,500 Back Office 15,000 22,500 40,500 72,900 123,900 210,600 337,000 Medical Transcription 4,000 5,500 13,800 24,800 42,200 71,700 114,700 Legal Transcription 300 450 750 1,100 1,700 2,400 3,100 Other Data Trans 2,000 3,000 4,200 5,900 8,300 10,800 14,000 Animation 3,000 4,500 6,800 9,900 13,900 18,800 24,400 Software Development (Export) 10,000 12,000 15,600 20,300 26,400 34,300 44,600 Engineering Design 2,000 2,800 4,200 6,700 10,700 16,000 22,500 Digital Content 200 500 1,000 2,000 4,000 8,000 16,000 Workforce 100,500 163,250 266,000 403,400 568,800 794,800 1,082,800
Projections for the next five years IT & IT-enabled Services Revenues 2004 2005 2006 2007 2008 2009 2010 Customer Care 1,024 1,792 2,688 3,488 4,192 4,816 5,296 Back Office 120 180 288 488 880 1,496 2,392 Medical Transcription 42 70 126 238 476 952 1,708 Legal Transcription 4 6 9 13 20 28 36 Other Data Trans 26 39 52 78 104 130 169 Animation 52 74 111 185 315 500 759 SW Devt (Export) 170 204 272 374 561 850 1,275 Engineering Design 34 48 68 102 170 255 357 Digital Content 3 7 13 26 52 104 208 Revenues in US $ M $1,474 $ 2,419 $ 3,627 $ 4,992 $ 6,769 $ 9,130 $ 12,199
Opportunities and Challenges 1) Challenges is the current state to beef up our manpower resources, quality certification and security compliance. Which are all being addressed and in the final stages of implementation. 2) Opportunities would be in Finance & Accounting (F&A) as 28% of the Philippine graduates are coming from Business Administration and related courses. 3) Opportunities in moving up the value chain in doing more high value added services like, Knowledge Process Outsourcing (KPO).
Current Agenda & Initiatives BPA/P, Senator Mar Roxas, McKinsey 5 Year Road Map for the Philippine BPO Industry. BPA/P in partnership with TESDA in the PGMA Training for Work Program. BPA/P lobbying in the Office of the President Supporting the English is Cool Advocacy/Program BPA/P Promoting English Proficiency (PEP) Project Partnership with NASSCOM Initiatives of CICT-DOLE-BPA/P Initiatives of the Presidential Adviser for Job Creation, Secretary Arthur Yap Initiatives of some Local Government officials
Summary The Philippines can excel in all of the e-services sectors because of its quality of service that we provide. English proficiency is the key to success, as it is required by all sectors of the industry. Contact Centers have the highest demand, but is also more advanced in terms of Human Capital Development. Areas of opportunity for employing large numbers of workers: Back Office Operations & Medical Transcription. Niche area for creative talent: Animation. Leveraging on our level of IT and Technical proficiency in Software Development and Engineering Design.
For More information regarding the Philippine BPO/ITES Industry, visit our website at: www.bpap.org Thank You