In this BPO Corner:
Nordic, US Firms Considering Philippines for BPO Needs
By Maricel E. Estavillo and Jennifer A. Ng

Companies from northern Europe and the United States are considering the Philippines for their business process outsourcing requirements (BPO), said officials who led a briefing yesterday in Makati City on an upcoming major annual conference on this industry.

The 6th Outsourcing Conference and Exhibition—dubbed e-Services Philippines 2006 and scheduled from February 16 to 17 in the ESDA Shangri-La Manila in Mandaluyong—aims to showcase the country’s capabilities in medical transcription, animation, software development, BPO engineering design and contact center services. The exhibit is organized by the Center for International Trade Expositions and Missions (CITEM), an agency attached to the Department of Trade and Industry.

Nordic companies are slowly recognizing the Philippines as a potential site for their information technology-outsourced operations. Next month, representatives of two IT companies and trade group Swedish Chamber of Commerce will arrive to explore the country’s potential, Philippine trade representative to the Nordic region Mary Borromeo-Hedfors told Business World in an interview. Ms. Hedfors handles Sweden, Denmark, Finland and Norway.

Once these two companies decided to partner with third-party providers here, she said, they will also serve as business consultants for other Nordic companies. “This is how the business works in the region [northern Europe]: companies award contracts through and as advised by their business consultants. Unless you are a big company, you don’t go straight to the provider,” Ms. Hedfors explained.

Due to the language barrier, she said Nordic companies are looking at tapping the Philippines for non-voice IT outsourcing services, like back-office finance and accounting requirements, was well as data transcription, which involves conversion of paper-based data into an electronic format.

“For one, Sweden is pushing for a paperless society, and the Philippines can reap a windfall from this development,” she said.

Already, one library has started to outsource its requirements to SPI Technologies.

Aside from this one known Philippine-based transportation company is now processing mapping and tracking requirements of one Nordic shipping company and the country already hosts Colibria, a Nordic software development firm.

“Nordic companies are very reserved, they don’t want to talk about their business even though some companies have already started doing business here,” she said.

Ms. Hedfors started to market the Philippines as an outsourcing site in the Nordic region in 2001, when this business was identified by the government as one of its priority sectors.

Moreover, seven big US companies are considering the Philippines for investments in BPO and in information and communications technologies, the Board of Investments (BoI) said.

Celeste B. Ilagan, the BoI’s executive director for international marketing, said the possible entry of these seven new players may boost investments in the local ICT and BPO sectors by 50% or close to PhP 20 billion this year. She declined to identify the interested firms.

“For 2005, the combined investments in the ICT and BPO sectors reached a total of PhP 12.11 billion, representing 70 projects,” Ms. Ilagan said in the sidelines of a briefing on the 6th Outsourcing Conference and Exhibition held in Makati City [on January 12, 2006].

Currently, the BoI noted, Convergys Philippines Services Corp. is considered the biggest call center operating in the country with more than 6,000 seats.

Investments in the ICT and BPO sectors are also expected to be boosted by the expansion plans of call centers such as the Hong Kong and Shanghai Banking Corporation (HSBC) group. Trade Secretary Peter B. Favila said HSBC is keenly interested in putting a second call center north of Metro Manila. “HSBC was very much encouraged by the operations of its call center in the Northgate Cyberzone, which currently has about 2,000 seats,” Mr. Favila said.

The company inaugurated its PhP 1.5-billion call center in Filinvest, Alabang last July 1. HSBC’s Philippine call center is its eighth service center in Asia.

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This article was originally published in Business World on January 13-14, 2006, page S1-7. Reprinted with permission.