Course No.: SMFBPO1 Fundamentals of BPO Mrs. Anie G.

Villa
NIPSC-SOM-BSBA Subject Teacher
First Semester 2020-2021

Module 1: IT-BPM Industry Overview

Lesson 1: IT-BPM Snapshot in the Philippines

Introduction
In this module, you will have the opportunity to learn the basic regarding the Business
Process Outsourcing (BPO) industry and its importance to the economic growth of the
Philippines.

Read the discussion and answer the questions that follow. Perform the activity and submit via
messenger or email @anievilla@yahoo.com.

Learning Outcomes: Upon completion of this Module, you shall be able to:
1. Understand deeply the benefits of IT-BPM Industry to the economy.
2. Appreciate the job opportunities that the IT-BPM industry can provide to jobseekers.
3. Explain the nature of jobs offered by the IT-BPM industry.

Discussion:

The Philippines is a recognized global strategic partner in providing continuously

The industry not only provides us jobs for making and receiving calls. Those with expertise in
other subsets of the IT-BPM industry such as Knowledge Process Outsourcing, Software
Development, Animation and Game Development and Engineering Design also have
opportunities.

So, contrary to popular understanding, beyond making outbound and taking inbound phone
calls, the Philippines is a proven preferred solutions provider to global clientele.

As of 2010, the Philippines’ IT-BPM sector has already surpassed India’s standing in voice-based
services, making the country the number one provider for such services in the global economy.
Voice-based services is also identified as the largest contributor in the local BPO industry,
including 64% (493,000) of generated direct employment and 67% ($ 7.4 billion) of total
revenues in 2011. Aside from this, several non-voice and complex BPO services such as
healthcare information management, knowledge process outsourcing, engineering, animation,
and software development are gaining prominence in the global BPO sector and are in a higher
growth pace vis-à-vis voice-based businesses.

The global position of the Philippine IT-BPM industry is largely attributable to the strong
skills of the Philippine labor force. In voice-based services, Filipinos hold competitive advantage
in English communication skills, strong customer service orientation, and adaptability to
consumers’ Western culture. In non-voice and complex services, The Economist and Everest
Group analysts report the growing number of businesses providing healthcare information
management, human resources management, business intelligence, and offshore financial
consulting in the Philippines. Coupled with Filipinos’ hard work and openness to learning, these
two existing advantages provide investors with a strong advantage once they set up shops in
the country.

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Competitive Positioning of IT-BPM Centers

India and the Philippines are global leaders in the IT-BPM sector and remain at the
forefront of voice and non-voice BPM as well as IT services. China and Mexico can be classified
as alternative participants that are maturing in terms of capabilities and service offerings.
Emerging players encompass six ITBPM destinations: Chile, Brazil, and Poland, which are seen as
strong regional participants, while the remaining three are Southeast Asian countries Malaysia,
Thailand, and Indonesia. Similar to the alternative participants, countries in the emerging
segment currently have varying levels of capabilities and offerings. The Banking, Financial
Services, and Insurance (BFSI), High-Tech and Telecoms, Manufacturing, and Healthcare make
up the four main verticals that largely leverage IT-BPM services. These sectors continue to
evolve rapidly in terms of regulatory environment, capital requirements, and process
optimization, further driving the rapid adoption of IT-BPM, as illustrated in the following exhibit.

Demand Analysis by Vertical

As shown above, demand for IT services is expected to remain prevalent across all verticals while
subsegments indicate a heightening KPO demand. The Philippines has considerable potential to fuel its
growth even further in the next six years and beyond. There are multiple paths to growth, each having
its advantages and disadvantages. Top locations such as India are clearly moving from a cost plus labor
arbitrage model focusing on generating higher revenue and profitability per employee. This necessitates
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a shift in strategy, moving towards accelerated adoption of technology platforms, and an increased focus
on vertical specialization. The other growth path, which is taken by China and other emerging countries,
concentrates on ramping up volumes in order to increase global market share and gain credibility as
quality suppliers of IT-BPM outsourcing services.

SEA Countries in Tholons 2016 Ranking

Excluding India and China, the Philippines is the most prominent destination in Tholons’ Top 100 list
where a total of nine cities were shortlisted in the global top 100 IT-BPM destinations. In terms of
service diversification, the Philippines remains as the top destination of choice for voice-based services
while expanding its horizontal BPM services in areas such as finance and accounting, as well as
verticalfocused solutions such as healthcare information services. The country also has a strong affinity
to the North American market and is consistently preferred by major buyers due to its cultural and
historical links, English proficiency skills, and friendly and hospitable manpower.
The Tholons Top 100 Outsourcing Destinations Ranking is an annual propriety study to evaluate the
overall performance of IT-BPM destinations at the city level.

Performance of the Philippine IT-BPM sector in previous Roadmap period (2010-2016)

Word Bank
Application Management
It is the process of managing the operation, maintenance, versioning, and upgrading of
an application throughout its lifecycle.

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Capacity Management
A process used to manage information technology (IT). Its primary goal is to ensure that
IT capacity meets current and future business requirements in a cost-effective manner.
Contact Center
A contact center (also referred to as a customer interaction center or e-contact center)
is a central point in an enterprise from which all customer contacts are managed. The
contact center typically includes one or more online call centers but may include other
types of customer contact as well, including e-mail newsletters, postal mail catalogs,
Web site inquiries and chats, and the collection of information from customers during
in-store purchasing. A contact center is generally part of an enterprise’s overall
customer relationship management (CRM)
Data Center
Computer facility designed for continuous use by several users, and well equipped with
hardware, software, peripherals, power conditioning and backup, communication
equipment, security systems, etc.
Helpdesk
A resource intended to provide the customer or end user with information and support
related to a company or institution’s products and services. The purpose of a help desk
is usually to troubleshoot problems or provide guidance about products such as
computers, electronic equipment, food, apparel, or software.
Knowledge Process Outsourcing (KPO)
Knowledge process outsourcing (KPO) is the allocation of relatively high-level tasks to an
outside organization or a different group in a different location. Examples of KPO
include long-term jobs for intellectual, analytical and knowledgeable people within
industries such as research and development, financial consultancy and services
business and technical analysis and many others.
Outsourcing
Any task, operation, job or process that could be performed by employees within an
organization, but is instead contracted to a third party for a significant period of time.
Full-Time Equivalent (FTE)
The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by
the employer's hours for a full-time workweek. When an employer has a 40-hour
workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs.
Employees scheduled to work 20 hours per week are 0.5 FTEs.
Compound annual growth rate (CAGR)
Compound annual growth rate (CAGR) is the rate of return that would be required for
an investment to grow from its beginning balance to its ending balance, assuming the
profits were reinvested at the end of each year of the investment's lifespan.
Direct Jobs
“Direct Jobs” is employment directly attributed to activities-operations, growth and
expansion-of the industry.
Indirect Jobs
“Indirect Jobs” is employment indirectly generated in relation to activities of the
industry. For example contact center employees working on graveyard shifts buy their
food from fast-food restaurants who decided to do business 24 hours because of
demand. Same goes for jeepney and taxi drivers who decided to stay up late for
employees going to the office in the evening. They are not employed by companies yet
are benefiting from these opportunities.

Summary

IT-BPM industry provides both direct and indirect job opportunities to Filipinos. It is
clear opportunity for the country to positively uplift the quality of life. This is accomplished
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through salaries and wages paid to employees of the IT-BPM industry as well as to salaries and
wages earned through indirect employment. Regardless if the job is direct or indirect in its
origin, taxes are paid to the government. These taxes are then put to work in the development
of infrastructure, utilities, security and welfare of the country.

Assessment

Answer the question below:

Your answer shall be evaluated using these criteria:

• Content . . . . . . . . . . . . . . . . 10 pts
• Organization of ideas . . . . . 10 pts.
• Language facility . . . . . . . . . 5 pts.
Total . . . . . . . . . . . . . . . . . . 25 points

References:

http://industry.gov.ph/industry/it -bpm/
https://boi.gov.ph/wp-content/uploads/2018/03/Executive-Summary-Accelerate-PH-Future-
ReadyRoadmap-2022_with-corrections.pdf
Fundamentals of Business Process Outsourcing 101 Teacher’s Guide. IBPAP

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