INTRODUCTION

On the back of successful offshore delivery of voice-based customer service support, the Philippines established itself as the second-largest offshore destination (after India) in the rapidly growing Business Process Offshoring (BPO) market.

As the BPO market evolves, we expect 90% of future BPO opportunity to derive from non-voice BPO functions. Given this significant market potential, non-voice BPO represents an attractive opportunity segment, and will be key to the future growth of the Philippines’ BPO market. While there is a well-understood value proposition for voice-based BPO services from the Philippines, there is currently limited awareness of the capability and potential for non-voice BPO. However, even today, BPO delivery from the Philippines is no longer limited to voice-based services, and a number of companies are already leveraging the Philippines for delivery of a wide array of non-voice BPO functions. This research examines the Philippines’ BPO market with a specific focus on current capabilities and future potential for non-voice BPO services.

SCOPE

This report focuses exclusively on the non-voice BPO market in the Philippines and includes activity by suppliers and captives.

We focus on:

• The evolving BPO opportunity
• The Philippines non-voice BPO market activity and maturity
• Operating model implications and role of the Philippines for non-voice BPO delivery
• Key implications for stakeholders

CONTENTS

This research report provides an overview of Philippines offshore market with a specific focus on the non-voice BPO market. It examines the growth of the Philippines’ non-voice BPO market and includes an assessment of current activity and maturity for a wide array of non-voice BPO functions. This report also provides tactical operating implications for companies seeking to deliver non-voice BPO from the Philippines, highlights challenges to growth, and includes perspectives on the role that the Philippines can play in the global services supply chain for non-voice BPO. In addition to providing key implications from the research for buyers, providers (suppliers and captives) and the industry, this report includes case examples of 10 companies leveraging the Philippines for non-voice BPO delivery.

Some of the findings in this report, among others, are:

• BPO has a significant growth potential with an addressable market opportunity of US$220-280 billion. While voice-based services constitute a bulk of the BPO market currently, non-voice and back-office processes contribute 90% to the future market opportunity
• Success in voice-based BPO services has made the Philippines the second largest low-cost BPO destination after India
• A number of companies are already leveraging the Philippines for a wide array of non-voice functions though the scale of operations is low
• Most current activity and scale in non-voice BPO is concentrated on transactional services (e.g., Finance & Accounting, medical transcription)
• Given the nascent stage of the market and the prevailing talent issues, the Philippines is unlikely to replace India as the nerve-center for non-voice BPO, but has the potential to emerge as an important satellite delivery location