UK companies to make the Philippines their alternative outsourcing hub

As more European firms open up to outsourcing as a viable business venture, they are now trying to follow what their counterparts in the United States have been doing favorably – send critical business processing work to offshore destinations like the Philippines.

In the recently concluded government-organized e-Services Philippines trade mission to Europe, Philippine IT/BPO companies generated substantial leads and an estimated US$3.15 million sales in business deals, according to the Center for International Trade Expositions and Missions (CITEM), the export promotions arm of the Department of Trade and Industry.

“Nine major companies from Europe are currently in negotiations to do offshore work here. One of these is a giant Dutch company who decided to locate a shared services center in Manila because of our business and cultural affinity with the West and English-proficient workforce,” said Trade Assistant Secretary Fe Agoncillo-Reyes, executive director of CITEM.

Based in a Forrester Research Report, offshore service spending in Western Europe will grow from EUR 1.1 billion in 2004 to EUR 3.6 billion in 2009, with the UK accounting for 76% of that amount. In the Schengen states, the Netherlands is one of the most open economies to outsourcing.

“The Philippines hopes to benefit from the growth of shared services centers (SSC) for multinational companies and niche on more specialized back office functions related to software, F&A as well as HR and supply management,” added Agoncillo-Reyes.

In fact, Philippine companies, according to Agoncillo-Reyes, are well positioned to take advantage of the demand for more sophisticated services, leading to knowledge process outsourcing (KPO) and global solutions delivery as shown in the trade inquiries we received in the mission.

The Philippine participants in the Europe mission were: Alliance Technologies (contact center/BPO technology enabler); BlastAsia (web-based applications, custom/packaged applications); DTSI (contact center/BPO technology enabler), IAMD Software Solutions (website development, animation); Logicall Inc. (contact center); RG Financial Services (financial & accounting services); ADEC Solutions (diversified BPO services); Innove Communications (telecommunications); PLDT (telecommunications); Pointwest Technologies (custom/packaged development); and Vinta Software (custom/packaged development).

Through the mission, the government likewise extended invitations for foreign delegations to
e-Services Philippines (15-16 February 2007), the country’s annual platform for IT and BPO. The delegates also met with EU associations Intellect Group, IAOP London, Rapier Group London, Ministry of Foreign Affairs in The Netherlands, and ICT Office in The Netherlands.

Following the mission, the Philippines was also nominated in the UK’s National Outsourcing Association (NOA) Awards for Best Practices. NOA is an independent body in the United Kingdom that promotes best practices, service, and innovation in outsorucing.

“As the world becomes flatter with the outsourcing trend, the challenge for the Philippines is to continue to move up the value chain and intensify the promotion of the Philippines as a viable location for specific verticals such as F&A, HR, and administration processing,” said Agoncillo-Reyes.

For more information on the Philippine trade and investment mission, please contact CITEM’s IT Services and Electronics Division at (+632) 8325044 and (+632) 8312201 locals 212, 251, and 301, email itservices@citem.com.ph or visit the website www.e-servicesphils.com/europe2006