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3865 CHRISTIAN ARLMEL LAGUIDAO BSSE-III-9 Group 1 Industry-Analysis-Paper 146486 871577343
3865 CHRISTIAN ARLMEL LAGUIDAO BSSE-III-9 Group 1 Industry-Analysis-Paper 146486 871577343
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Apart from its subcategories, BPOs has also its subtypes which are as follows:
The Philippines' economy relies heavily on the BPO (Business Process Outsourcing)
business. In the outsourcing industry, the country has been a great option for India. According to
the National Economic Development Authority (NEDA), despite its steady state, the Philippines'
BPO industry is still developing, and businesses must offer diverse and value-added services by
boosting worker skills and embracing the shift to artificial intelligence. Knowledge process
outsourcing (KPO) is becoming more prevalent in new businesses than traditional voice services.
KPO firms are expected to produce new professions such as market research, fraud analytics,
banking insurance, actuarial engineering, web development, data integration, research and
development, legal processing, and medical transcript preparation.
According to the IT & Business Process Association of the Philippines (IBPAP), the top
employer in the Philippines is IT business process management (IT-BPM), a type of BPO
industry. Beginning in 2019, more than 71,000 new jobs were created for Filipinos, increasing
the total number of IT-BPM personnel from 1.3 million in 2018 to 1.23 million in 2019. In
addition, they anticipate an increase in employment and revenue from 2019 to 2022 from other
sub-sectors of outsourcing businesses such as Contact Center and Business Processing,
Information Technology and Software, and Healthcare Information Management, among others.
The COVID-19 pandemic has an impact on every part of our society, and most of our
activities have been halted in order to keep the virus from spreading. Some industries adapted to
working from home, others changed work schedules to meet new government standards, some
laid off people, and, sadly, some firms were forced to close—these are just a few of the effects of
the pandemic on the country and its economy. The BPO industry was also obliged to make
certain alterations to keep things operating during the lockdown, and to comply with the new
quarantine guidelines, requirements and restrictions made by the government. At the beginning
of the pandemic and lockdown, the BPO sector was on the verge of experiencing its first
revenue decrease in 11 years, as well as a slower potential growth. In an article written last May
2021 by ABS-CBN News, according to the data from the IT and Business Process Association
of the Philippines (IBPAP), despite the economic impact of the health pandemic, revenues of the
Philippines' BPO industry increased by 1.4% in 2020, or a total of $26.7 billion compared
to 24.5 billion during 2018. In addition, 1.8% more people were hired, accumulating a total of
1.32 million employment in the Philippines. The BPO industry is expected to increase between
5 and 6.5 percent in 2021, according to Rex Untal, the President and Chief Executive Officer of
the IT and Business Process Association of the Philippines (IBPAP). According to the survey
conducted by IBPAP, 87% of BPO companies anticipate a steady growth for this year, with
increases ranging from 5 to 15%. On the other hand, According to the report of Bangko
Sentral ng Pilipinas in December 2021, revenues from BPO are estimated to increase by 9%
this year, higher than the projection of 5% in September, and are expected to have the same rate
for the following year.
The business process outsourcing sector is vital in one's economic state. Some of the
countries listed in the table were part of top countries for BPO services. Countries belonging to
Southeast Asia are considered to have less developed economies compared to those in countries
belonging to East Asia, such as Japan and Republic of Korea. These lower-income countries,
such as Philippines, Indonesia, Malaysia, Vietnam, and Thailand have a greater opportunity to
develop their domestic market as the country’s economy grows (Mitra, 2013). In the table above,
the country with the greatest population is Indonesia with 273.7M people, whilst Malaysia has
the least population of 32.7M. Moreover, Indonesia and Malaysia has the lowest BPO industry
revenue, which are tied with 1.5M$ each out of their 1,058,423.84M$ and 336,664.44M$ GDP,
respectively. Contrary to this, the Philippines has the highest BPO industry revenue of 26.7M$
out of its 361,489.35M$ GDP in 2020. The Philippines is considered to be one of the highest
when it comes to their BPO revenue in Asia, which is why they hold the title, since 2010, of ‘The
BPO Capital of the World’ (Ultimate outsourcing statistics and reports in 2021, 2021).
Finance Industry
Finance industry is among the most complex and multifaceted industries in the
world. Hence, such complexity pushes them to seek help in handling tasks particularly in
the aspect of accounting, marketing, and human resources. And such services are offered
by BPOs helping the industry to manage such complexity. Moreover, BPOs help the
Finance sector to focus more on profitability and expansion by outsourcing specialized
tasks of the said industry.
Health Industry
SImilar to the Finance industry, the Health industry has a lot of tasks and
processes that are not the core of the industry which can be outsourced by other entities.
With the help of BPOs, the health industry is able to be hyper-organized when it comes to
tasks like administration, regulatory compliance, and quality assurance. Instead of
devoting time and manpower to these tasks, your team can focus on patient care and core
business development.
Tourism Industry
With the help of BPOs, travel companies may outsource the tasks and processes
that are necessary with their operations, particularly travel logistics. For instance, by
outsourcing ticket and hotel booking, the company could perform more efficiently while
increasing customer satisfaction.Hence, outsourcing allows them to increase their
productivity.
Telecommunications Industry
Telecommunication companies need to outsource services particularly those who
are focused on general customer service duties and technical support tasks including call
center services. Such services include answering queries or fixing
product-related/service-related problems.
Employment Generation
Over the years, the BPO Industry has provided Filipino workers an opportunity to
be hired, work, and gain income. In fact, the Philippines has the world’s largest
concentration of call centre workers. For instance, Thompson (2019) argued how the
Healthcare Information Management (HIM) sector was able to utilize and employ an
estimated 200,000 under- and unemployed nurses in the Philippines. With the severe
effect of the pandemic and the economic crisis in the country, the BPO Industry managed
to remain resilient. By way of illustration, DoLE has reported a surge in remote hiring in
the industry. This is due to businesses looking for ways to cut costs during the pandemic
and turned to outsourcing as a solution (Outsource Accelerator, 2021). Moreover, more
individuals resort to applying in BPO Companies as it is highly in-demand particularly
with the current context of the country. Hence, a positive outlook may be derived in
outsourcing as it is foreseen to bounce back in the upcoming years. However, the welfare
of BPO workers must also be taken into account as the industry is known to be
exploitative and oftentimes cannot provide good working conditions to its workers. For
every successful BPO company, a Filipino worker must be working for it, and in turn,
they must be valued greatly.
Transportation Growth
Along with the increasing population of individuals who engage with the BPO
sector is the increasing demand on transportation services especially beyond office hours.
Telecommunication Growth
Prior to the pandemic, there is already a positive growth in terms f of telecom
businesses in the country. And now that the setup of most BPO workers shifted to
work-from-home, the reliance and demand towards Telecom services also significantly
increased. Hence, it is foreseen that the BPO Industry will also induce growth towards the
Telecommunication Industry.
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