By Mark Atterby – Senior Staff Writer
A range of countries are aggressively competing for a slice of the global BPO market, which is expected to grow at an annual rate of 5.4 percent to $93.4 billion in 2015, according to analyst Ovum. As India becomes more expensive, the Philippines, , Africa and Latin America are rolling out the welcome mat for outsourced business processes at the low to mid-point of the value chain.
Providers, industry groups and governments at all levels will ally to develop incentives to attract BPO jobs. Lures will include breaks on taxes and fees, as well as free or low-cost courses to improve residents’ business English skills and technological know-how. New locations in South America, Africa and Asia Pacific have emerged where providers have developed global delivery networks to address requirements centred on language skills, time zone proximity, and cultural sensitivity.
BPO is among key sectors the South African government has identified to grow the economy and create jobs. In 2009, South African BPO sector was estimated to be directly employing more than 60,000 people and accounting for a further 75,000 indirect ones. Time zone wise, South Africa is ideal for Europe.
Over the last couple of years a number of UK companies have repaticated projects out of India over quality of service issues. South Africa provides ideal positioning to Europe in terms of time zones and is being promoted as a destination that claims to offer quality had very affordable rates.
Yusuf Timolfrom the South African High Commissioner in London, said in a recent news article that there were huge opportunities for capturing India-based BPO work in 2012 and beyond. “South Africa is well positioned to fill this void as we are able to provide quality at an affordable price.” In 2009, the South African government launched an R1.1bn support programme to enhance the competitiveness of the BPO sector.
English-Spanish language skills, a young, highly skilled BPO workforce, cultural similarities and a good time-zone fit with north America is making Latin America a very attractive outsourcing destination for North American companies. Brazil, Mexico and Argentina have been showing signs of becoming serious contenders as key outsourcing destinations in recent years
Closer to home the Philippines has become a major destination for BPO operations.
The Philippines Government works extensively in offering investors incentives and opportunities. The Philippine government launched a range of fiscal and non-fiscal incentives to attract BPO investors as part of the 2007 Investment Priorities Plan. This plan has helped turn the Philippines into a growing BPO powerhouse.
Since 2007 the BPO industry in the Philippines, according to figures from McKinsey Quarterly, the BPO industry has experienced 46% annual growth and is now valued at over $US 6 billion. The BPO Association of the Philippines estimates that over 600,000 are employed in the BPO industry. 17,000 service the Australian market.
The Philippines is a convenient location for Australian organisations. It fits relatively well into Australia’s time zone and it is not that far to travel to. A highly skilled and motivated workforce that has very competent English skills is available. And it’s in expansive compared to Australia.
According to a recent study by CB Richard Ellis, the Philippines is one of the most cost-effective outsourcing destinations in Asia. Comparing 15 central business districts in Asia Manila was ranked second cheapest with lease rates of $US 19.1per square foot/annum, next to Jakarta’s $16.3. This compares to Sydney CBD, which ranges form $450 to $1,100 depending on building and location.
The Philippines government has developed special economic zones in various cities across the Philippines and are being put in place to serve as central hubs of activity, where the agricultural, industrial, commercial, and recreational aspects of everyday life can work together. Enterprises operating within these zones are offered substantial tax cuts to invest and grow their business.
It seems everyone wants a slice of the BPO pie. The competition between the new and emerging destinations shall fuel the future growth and evolution of the industry. As existing locations become overheated and the availability of sufficient talent dries up, the emergence and development of new destinations will be eagerly fostered by governments looking to give their citizens access to jobs.