Back-office outsourcing growth area for delivery-services sector

Posted December 05, 2008

CALL centers may be at the forefront of the business process outsourcing (BPO) sector, but industry officials on Tuesday urged independent players to expand into back-office outsourcing, one of the fastest growing segments of this multibillion-dollar industry.

Back-office outsourcing is a type of service under the nonvoice BPO segment, which deals with noncore business processes like accounting, finance, logistics and human resources, to name a few.

Richard Eldridge, cofounder of Infinit-O, a multinational back-office and knowledge process outsourcing provider, said there is “a huge opportunity” for this kind of service around the world.

In a presentation, he provided industry statistics showing how contact centers far outpace back-office operations in the country, but such operations nearly matched the former in terms of average growth in the past three years.

“Cost is still the number one most important factor for companies [in terms of reasons they want to outsource],” he said during the 2008 BPO Summit Philippines. 

The current crisis, he said, can be viewed as an opportunity as companies based in the developed world will inevitably look for more ways to cut  costs—and will do so by outsourcing business activities like payroll and even research.

He said there were very few BPO players in the country engaged in back office outsourcing, which he estimated to be about 10 to 15 companies, and that most of these processes are being carried out by captives such as large multinational banks.

“[But] this is the direction that many companies will take,” he said noting that many call center owners that he spoke with are looking to move some of their operations into back office operations.

Meanwhile, Oscar R. Sanez, chief executive officer of the Business Process Association Philippines (BPA/P), said their group is actively carrying out marketing missions to the US and Europe to highlight the capabilities of the Philippines as a back-office outsourcing option. 

“We are highly optimistic for growth in this area, which is [one reason] why we held this summit,” he said.  

Source: BusinessMirror.com.ph, December 5, 2008
by Miguel R. Camus