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BPO Philippines: A shift to higher value services

Since the turn of the century, the outsourcing industry in the Philippines has experienced phenomenal growth as leading companies around the world have taken advantage of the high-quality/high-value BPO services provided by the country. The industry has provided good, well-paying jobs to millions of Filipinos. In addition, it has contributed to robust economic activity in the country and continues to attract global investments. However, the nature of outsourcing services is evolving, and soon BPO providers in the Philippines will need to shift their business model to providing more complex, higher-value services to remain competitive.

“Artificial intelligence (AI) is changing the game for BPO providers the world over. Simple and highly repetitive tasks, which make up the bulk of work for offshore destinations like the Philippines, will soon be almost entirely handled by AI. Many tasks are already being automated by new technologies, particularly through voice assistants that are getting smarter every year. One good example is the chatbot that responds to customer requests on a company’s website,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning mid-sized BPO in the Philippines.

The continued use of AI will help companies provide the information customers need in a faster, more convenient, and cost-efficient way. Of course, the impact of this for BPO providers in the Philippines and elsewhere will be the need for much more technology-centric enterprises. To accomplish this, outsourcing vendors in the Philippines will need to upskill their BPO employees to meet this demand.

“This shift won’t happen overnight, but BPOs should start transitioning their workforce composition now. Future tasks that will be outsourced to the Philippines will very likely be more complex in nature. These will be processes that can’t easily be automated and still require human interaction. And of course, the more complex the outsourced tasks are, the fewer agents will be needed to handle them. BPO leaders need to ensure they are developing the right BPO workforces for today and tomorrow,” explains Mr. Ellspermann.

With the utilization of AI for simple, repetitive tasks, there will be an increased demand for knowledge process outsourcing (KPO). These are the kinds of tasks that are more complex and typically very specialized in nature. They require a more concentrated or technical skillset by agents, such as accounting, research, web design, and digital marketing, for example. The Philippines will face a challenge in the sense that India still maintains a stronghold on these types of high-value (non-voice) BPO and KPO services.

The Philippines does have some advantages, however; the BPO industry in the country is now mature enough to make the transition to higher-value services. The Philippines is already the worldwide leader in all voice-related outsourcing services and BPOs have begun shifting their focus onto more complex services. This involves new technologies, data analytics, and process design that can’t be easily automated. In addition, BPO providers are investing more into training their workforces on these high-value services through curricula development in colleges and in-house training initiatives.

The Philippines’ success as a BPO haven has seen it emerge as a global leader in providing value-added business processes and outsourcing services in the last twenty years. The country is ranked second overall in the world as an outsourcing destination, and number one for voice-related services. With the rise of AI however, BPO companies in the Philippines must continue their investment into training and resources to provide higher-value services. Just as machines have replaced humans in many factory settings, AI will soon supplant agents performing simple, lower-level tasks. “BPOs in the Philippines must begin preparing their workforces for this inevitability and transitioning BPO work to higher-value services that will maintain their position as a global leader into the next decade and beyond,” says Mr. Ellspermann.

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