As so many elements of our lives go digital, it might be expected that industries like Business Process Outsourcing (BPO) in the Philippines would be struggling. In fact, the sector is seeing some growth in certain areas as a result of the rise of digital. To many this might seem counter intuitive. The BPO industry in the Philippines owes some of its strength to lower labour costs, so it is strange that it is thriving when one of the advantages of many digital companies are software platforms that manage significant parts of their business with no labour costs. However, this simplistic view overlooks both the growth of digital in the BPO sector and the importance to most companies of having a high-quality human aspect to their service.
“The digital economy has been one of the winners of the COVID-19 pandemic. While many parts of the world economy were devastated by the measures that were necessary to control the spread of the pandemic, digital was a clear beneficiary. The underlying trend towards digital solutions accelerated when many parts of the world found themselves unable or unwilling to use existing face-to-face solutions. One obvious example is fintech, where things like banking, traditionally delivered through physical banks found itself disadvantaged when competing against those neo and challenger banks that did everything online,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning BPO in the Philippines.
Growth, however, also brings problems. In the example above, the digital bank might be pleased to see a huge growth in their customer base, but it will also be feeling the headache of more transactions to process and more customers to service. And even though they are online, there is still a need for the human element. A customer might be happy dealing with an AI bot for most of their business, but sometimes there are situations and problems that only a human can resolve.
And this is where the traditional benefits that BPO companies offer become apparent. The size of the industry in the Philippines — the BPO sector represents about 7% of the country’s GDP — means it can scale rapidly. The sector employs around 1.2 million Filipinos which, combined with the high level of English fluency and education, makes it ideally placed to meet additional demand.
The industry had also invested heavily in its own technology, even before the COVID-19 pandemic. As a world-leading provider of BPO services, the Philippines has more than 800 BPO companies who all recognise that to survive they must ensure their service is efficient and high quality. This means that there has been significant investment in staff and infrastructure, like AI and security, over the past two decades.
The BPO industry in the Philippines was more than ready to meet the challenge of increased demand from digital growth as well as their own challenges from COVID-19 prevention measures. Improvements in infrastructure, both by businesses and at a national level, have made it easier for some staff members to work from home. For those that were not able to work from home, due to strict data security requirements, things like AI improved agent efficiency, helping to limit numbers so staff could work at safe distances.
The factors that have made the Philippines an attractive destination for BPO — lower costs, improved service quality and the ability to respond to changes on demand — have continued to give it a competitive edge. While digital might mean a different way of operating a business, many of the typical needs have not gone away. There are still back-office processes that need completing and customers who have service needs that cannot be met by even the most sophisticated AI bot.
“I’ve never experienced anything like the last 18 months in over 20 years in the Philippine BPO industry. We have seen an exponential increase in inquires coming from companies that are operating and thriving in the digital space,” says Ellspermann. The company has found itself in particular demand from businesses in the US, UK, and Australia. “Telehealth, digital banks, live-streaming providers, every digital company imaginable is looking to the Philippines for their BPO needs,” he added.
Ultimately, it seems that whatever business or business model a company operates under, outsourcing front or back-office processes to the Philippines is a solution many consider. The reasons behind the current digitally driven growth remain the same as they have always been as Ellspermann explains, “all these companies come to us because they need the same things, world-class BPO services at a reasonable rate is important, but just as important is that we share their focus on quality and customer satisfaction.”
