BPO Sector Occupying The Market Convincingly

The Philippine Business Process Outsourcing, whether viewed through the eyes of the vendor/provider or the corporate business owner, has historically been viewed myopically as a means for corporate entities to strip out cost and increase profitability through labor arbitrage as it applies to soiled business functions such as IT or finance and accounting. This business model had led to the rapid expansion of specific function and specialized service providers, corporate captive centers.

While these models have proven to be fundamentally and physically sound throughout the past two decades, the role of the discrete service provider is coming to an end. The end will be accompanied in by traditional market drivers such as emerging technology and increased competition, but more importantly, the fate of individual IT-BPO service providers will be determined by the overall scope and value of the call center services provided across the client’s enterprise. Those who fail to adapt to customer demand will see their market share evaporate or find themselves the target of acquisition. The focus for the future must be the customer.

The IT-BPO market is not immune to the boom and bust cycles that have affected mature global industries such as construction, manufacturing and retail while financial statistics and generous forecasts are encouraging. Although BPO and IT service providers have traditionally benefited from such market cycles, acting as a stabilizing agent for their clients, it is imperative to remain vigilant and understand that continued market share is not a given for BPO and IT organizations. To continue on past success by assuming that current competitive advantages such as cost, education levels and management expertise, will not erode can be fiscally fatal. Pressure from other BRICs members will continually grow and the impact of their continued assertiveness is difficult to predict.

Competition from outside Business Process Outsourcing boundary is a given and well covered by the business media. The competition in of itself is not the chief threat to our outsourcing leadership position; it is merely a contributing and ever present factor. Market share will continually remain in constant change based on price pressures, regulatory shifts and trends largely out of our control. Business plans include for such variability and allow active service providers to react accordingly. However, as alluded to before, the chief threat is the infiltration of an overconfident and relaxed perception that the provision of largely commoditized services can be maintained. Relevancy will be determined by customer value and not solely on line of business expertise.