IBM, Tata Expand Business Processing From the Philippines

IBM and Indian outsourcer, Tata Consultancy Services (TCS), this week expanded their business process outsourcing (BPO) delivery from the Philippines, reflecting the growing importance of the country as a location for BPO services delivery.

The Philippines is expected to overtake India soon by number of staff employed in voice-based BPO services, and is also fast expanding in non-voice processes as well, said Jimit Arora, research director at Everest Group. India, however, remains the leader in overall BPO services, Arora said.

TCS, India's largest outsourcer, said on Thursday that it has set up a BPO center in the Philippines, which is also its first in South East Asia. The new center, located at Manila, will allow TCS to take advantage of the large pool of skilled BPO talent available in the country, it added.

The center will primarily deliver non-voice BPO services, a TCS spokeswoman said. The company did not disclose how many staff it would hire for the center.

IBM said on Wednesday that it is opening three new service delivery facilities in the Philippines. Located in the UP Ayala Techno Hub, Quezon City, these new centers will deliver outsourced process services, such as human resources, finance and administration, customer relationship management, and application management services to existing and future clients of IBM's BPO unit.

The expansion strengthens IBM's existing service delivery capability in the Philippines, the company said. The new facilities will deliver a mix of BPO services to global companies in sectors such as healthcare, pharmaceutical, consumer goods, technology, entertainment, telecommunications and distribution, it added.

The Philippines' annual revenue from IT and BPO could more than double to US$25 billion and employ 1.3 million people by 2016, if the industry accelerates its talent development initiatives and gets stronger government support, according to a road map released in October by the Business Processing Association of the Philippines (BPAP). At current talent growth and other conditions, the industry could still reach $20 billion in annual revenue and 900,000 employees by 2016, according to the BPAP.

Most of the business will come from BPO, according to Everest which was involved in designing the road map.

The industry currently earns about $9 billion in annual revenue, and employs about 500,000 people directly.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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