Tuesday, November 21, 2006 | MANILA, PHILIPPINES
News
Noting the advantages offered by the Philippines’ business process outsourcing (BPO) industry, a recent study by the Japan External Trade Organization (JETRO) urged Japanese firms to outsource non-core operations here if they want to enjoy the same benefits US and European firms have, particularly in terms of reduced costs.
JETRO — the Japanese government’s arm in charge of promoting trade and investments in other economies — noted, for instance, that the geographic proximity of the Philippines to Japan still gives the latter an edge over outsourcing competitors from the farther US and European continents.
"... US and European companies have been achieving cost reduction by utilizing global resources; it is inevitable for Japanese companies to outsource their non-core operations to match the cost competitiveness," said JETRO’s latest "Philippine IT Industry Update." "However, we found out that the number of Philippine-based companies offering back office BPO to Japan market was really limited."
According to the Business Processing Association Philippines (BPAP), an industry association for IT services and IT-enabled services firms, there were about 62 back office BPO service providers employing 24,500 people in this industry segment as of the first quarter this year.
Back office BPO companies in the Philippines perform a broad range of services like finance and accounting, human resource management, payroll, logistics, publishing, etc.
Moreover, some companies have started offering Knowledge Process Outsourcing (KPO) services which require higher skills and analytical expertise, and not just data processing.
Customers of Philippine BPO firms include US and European heavyweights like AOL, Procter and Gamble, Chevron Texaco, Shell, Deutsche Bank, etc.
At the same time, JETRO noted the apparent lack of interest among Philippine BPO firms in targetting the Japanese market.
"While back office BPO for the English-speaking world, especially for the US market, is rapidly growing, is Japan included in the Philippine BPO industry’s target? It is a fact that in BPAP’s marketing strategy, Japan, a non-English speaking market, is not a priority target even in their [sic] market diversification strategy to expand reach to non-US market," the paper read.
"From the Philippines’ perspective as BPO service provider, an obvious advantage of servicing Japan, compared with US, is geographical proximity. For Philippine-based companies to provide services to US clients in the same working hour with them, employees in the Philippines need to work midnight, so-called graveyard shift. For Japanese market, however, almost normal working hours can be applied due to only one-hour time difference. Companies which already have operations of BPO service for Europe and North America can better utilize the facility by servicing US customers at nighttime and for Japanese customers in daytime," it added.
While noting that large-scale BPO operations requiring Nihon-go-speaking call center agents is unviable, for now, JETRO said outsourcing deals is still possible for business processes that do not require fluency in Japanese.
"It is also possible for Japanese companies with global operations to locate primarily English language-based BPO center in the Philippines in which a relatively small-scale Nihongo-based services team may be located too. For example, by consolidating human resource (HR) services of a company that operates in many different countries around the world into one center, communication and collaboration among personnel handling each country would be much easier, and you have better chances of accomplishing the global implementation of company-wide rules and standardization," it said.
To be sure, there are a few Japanese firms that have already tapped local BPO services. NYK-Filjapan Shipping E-Services Corp.’s (NESC) facility in the port area of Manila, for instance, undertakes bill of lading data entry for all liner ships of NYK Line (NYK). NESC is a 100% subsidiary of NYK-Filjapan Shipping Corp., a joint venture of NYK and TDG (Transnational Diversified Group) that was formed in 2000. — Ernesto B. Calucag
No comments:
Post a Comment