Malditah Musings

Q & a: Oscar Sañez, CEO, Business Processing Association of the Philippines

SSON: Oscar, what is the purpose of BPA / P, and how the Association work to achieve that goal?

Oscar Sañez: The Business Processing Association of the Philippines was created in 2004 by members of the BPO industry, to show a face of the industry in the world. Before this, there are several organizations that represent various sectors in offshoring and outsourcing in the country. It is evident that there was a strong need to have a single industry body representing all interest groups in terms of both the marketing of foreign industry, and in order to address many of the common challenges and opportunities that the industry is facing at that time. So had the effort to stabilize some small organizations, and an umbrella organization - BPA / P - was formed.

Quickly after the BPA / P board elected to create a full-time management team to do a few things: one, to develop itself and a strategic plan to guide the growth of industry short-and long-term and the second is to have a fully focused on team that the leaders responsible for getting all the customers focused on executing the strategic plan is developed. It is now called the "roadmap" for industry BPA / P is leading and working with all customers.

SSON: BPA / P is running a successful program of scholarships for advanced to post-graduate training. Can you tell us a little about it and why it will benefit foreign companies seeking to source in the country?

OS: Usually the BPA / P roadmap covers three main topics, which talent development is one. The scholarship program falls under the initiative of ensuring talent development sustainability over the next several years, and is a program we created in collaboration with the government. We found that there was a significant segment of graduates in the pool need some kind of completion of a course or additional training programs to ensure we have a large pool of available talent, especially in a pair areas: English-language skills and knowledge in IT.

The industry tested a training program a year ago to increase the recruitment of programs that are already in place. We had a great experience with additional programs that operate in vocational schools as well as independent companies training members of the BPA / P. We approached the government and asked for support so we can train many more young people in programs and convert These full-time hires. The government has responded positively by providing a budget of close to $ 10million this year, to train about 50,000 young programs: of course we can not predict all of them qualify for completing the course but at least 40,000 must pass and therefore get recruited in our pool this year, so if we convert them into full-time work of at least 40,000 more available to us.

SSON: You mentioned a degree of official support there: how close the BPA / P to work in the Filipino government?

OS: We work very closely and very collaboratively with government, especially in three levels. One with educational agencies of government, and the scholarship program is a good example of how we collaborated with TESDA [Technical Education & Skills Development Authority] which is the business organized government body coordinating group to work with us in providing additional training for young people here.

Another agency that we work with is the Board of Investments, which is government investment-promotion group, as well as enclosed agency to which the Philippine Economic Zone Authority: body which supervises the IT park for setting up BPO sites in the country. What we will work together with them streamlining our investment process of development, including trade missions overseas as well as investors in the Philippines to attend, so we have a simplified process communication - a one-stop-shop mechanism if you - so that when investing in the future we have the private sector (which are BPA / P) working closely key representative of the board of investors in our overall presentation of opportunities in the industry. This is very good; we received a lot of positive response.

Then finally we work with the Office of the President by the Commission on ICT. It is the government body that coordinates with various telecommunications and software companies to support the general development of the local government what to call Cyber aisle: the ICT infrastructure linked to the rest Manila of the key city in the country. Part of what we have in the roadmap is a way where we can expedite the creation of new sites for expansion of BPO companies outside Manila, and we are not working in different ICT body for local government council out of Manila to prepare them for investment. The councils ICT is simplified for us the work in getting all the key customers in an area; property developers, the telco companies in each region, local government and units of academia will be able to work together to create new sites for expansion - and get investors to consider these areas as potential new sites. So we worked very closely with government in this effort and has given us a lot of positive gains for investment promotion.

SSON: So significant collaboration with government - but BPA / P is a purely private-sector organization?

OS: We are purely a group of private sector consists of BPO players themselves as well as key vendors in the industry. The support we get from government is more for collaboration and coordination, as well support the scholarship - which is not only financial support, but also the means by which we can distribute Vouchers scholarship to young people: The government then reimburses them directly to spend.

SSON: Moving on: the BPO sector in the Philippines is a wonderful story of success - but it is not plain sailing all. What you see as the biggest challenge in the sector and how the BPA / P and big industry players intend to consult succeeded or prevent the challenge?

OS: OK. There are a couple of large number of our best concern. First, although we are able to successfully promote the Filipino BPO industry for our talent available and the quality of our talent, we want to be expedite our growth and the big challenge for us is how quickly can we have our talent available in front of us because of the noticeable growth rate that we saw and it will continue to see over the next few years. There is a large, straining demand for talent and we would want to make sure that we are able to sustain talent both in terms of quantity and quality - not only in Manila but outside as well. And challenge the lies to ensure the system agree with enough demand.

We now face competition from the growth of other sectors - for example tourism and medical services - And needs from outside the Philippines for OFWs [overseas Filipino workers] are also increasing. So we join the university for the talent that need to by other countries poaching talent from the Philippines, and by other fast growing sectors. So a challenge for us is to ensure that we promote career prospects for the industry in most universities.

The challenge also lies in increasing access to more universities across the traditional sources we have new members from, as well as the ability to tune the program curriculum of many universities to be more in line with the requirements of our industry, for example, make sure that we make high quality English and IT skills program made available in early years to university. This is why the BPA / P we have devoted a director of talent development challenges; he leads university partnerships to ensure we get to the university to respond more closely industry requirements, as well as developing new standards of training and skills-assessment methodologies we want to implement a university level, so that We grind our recruitment much more. That is our biggest challenge.

Another area is related to what I said in the earlier about assimilating new site development. Currently most of our BPO population - about 80 percent of the work - are in Metro Manila. We would certainly want to see much more activity happening in new cities. The same way that the Philippines has created Bangalore and Hyderabad and Chennai, we are definitely looking look forward that at least ten more out of the city of Manila and cebu in order to host a new company. It created a lot of positives: one, we can access more talent available in the area, and second we should have a lot more support from a wider range of resources available to us, whether it be local government units or chambers of commerce in the area, or universities and academic sectors. So do we face a strong challenge but at the same time we know that because of our roadmap we can implement a lot of initiatives to address them.

SSON: Conversely then, what you see as the biggest economy of the Philippines in terms of BPO and how your organization leverage the property to expand and enhance the sector?

OS: Certainly the most important possession a man. We are hearing more frequently from our locators here that they know a lot more capacity than the Philippines we saw the first. For example, we are very well known for our services a voice in BPO: the quality of English language and skills of the Filipino customer agents service is well-talked-about industry today, and I think part of that is training as well as culture and the west orientation of people Filipino. But we saw a lot of growth beyond that: it became very evident especially in areas such as outsourcing finance, IT, engineering services and creative arts - especially in animation and gaming - and we are seeing double-digit growth as well as sectors. The captive centers here (the HSBCs the AIGs, the P & Gs, the Citigroups, the JP Morgans) is The expansion within the next two years, especially in areas such as finance and HR outsourcing. And is already booking a lot of new office space, even in areas of Metro Manila.

Another important property of the country is the strong infrastructure and a cost model is very sustainable. We are able to sustain the talent development progress We there the combination of quality infrastructure we in terms of telco, and the new expanded office sites, and we even maintain the cost model in a way not create unnecessary inflation in wages or office-space rentals because we create more capacity. So the combination of talent and an attractive structure costs, as well as new opportunities we see in other new sectors which I mentioned, are all strong points for the Philippines with huge potential for future development.

SSON: Is it realistic to expect the Philippines to compete against bigger players (in particular, obviously, India) outsourcing sector other than BPO: KPO, LPO example? And if so, what is needed for countries to compete on those terms?

OS: Certainly we recognize that the Philippines continues to remain very very strong, especially in areas such as IT and software development. But surely there are also niche that areas will continue providing opportunities for the promotion of the Philippines. Voice and non-voice BPO continues that great. We certainly do not think we can beat India in strong points are, but we see the opportunities around new areas suitable areas such as KPO, legal outsourcing, and engineering outsourcing - where The Philippines remains very large but where the Philippines will start having some opportunities. We see great value in being number two or three number of sectors; are ongoing contributors to progress in terms of the kind of general facts and skills that are in the Philippines BPO space. So there a place in the Philippines, a strong position to continue moving forward.

SSON: To what extent have recent changes-new effect financially to BPO in the Philippines, and how far can foreign companies looking to source from countries that really depend on stability of the peso?

OS: We are serious affected last year when we saw a 18.5 percent appreciation of the currency. Affected us - especially the small players who do not have a lot of financial the handicapped to be able to support field. But many of the big operators are actually able to improve and grow their operations because we saw a lot of room for improving operational efficiency here. The peso is mainly stay within what you want to call a single-digit fluctuations, given the kind of mediation We see in the present to ensure enough investment going in the right area of the country.

We see that the appreciation last year was more of a correction - One is not going to affect us in terms of being an annual event. What we are seeing is that because of better projections around FDI and foreign Remittances we see a stronger peso within the next three, four, five years. Plus we have better knowledge now of making sure that our operational excellence are in place to sustain change over the next few years.

SSON: Are you sure you trust the security of data and intellectual - the right to property in the Philippines?

OS: We are confident that we are addressing the issues of data privacy and intellectual property very well. For one, we have in place data privacy guidelines drawn up by industry to conduct the Board of Investments; as well, the multinationals that it very much guided us through the law on the data privacy and recognize the importance of these principles. The other thing BPA / P will lead to a very active effort on Partnering on Congress to pass a single Data Privacy Bill to support APEC Privacy principles. This is an intermediate stage of development and we see the bill passage late this year or in early the next year. We also actively communicating with all key customers APEC Privacy Principles to ensure that we support the principles and ensure that our people are trained and our contract is safeguarded for the kind of accountability and responsibility that we are processing data.

In terms of intellectual property we work near the BSA [Business Software Alliance] group to ensure that our member companies sign off on intellectual property rights agreements - at the same time as we are working with government to the strengthening of IP laws, as well as a new bill to ensure a strong penalty provision for rights to intellectual property violations. So moving very active in this area, we think this is all contributing to the strengthening of our data privacy and IP requirements.

SSON: Finally, what are your ambitions for the BPA / P within the next ten years?

OS: We think that we will continue to see strong growth over the next ten years in some areas. We will keep strong in BPO space, both voice and non-voice. Other items happens that we still growth in higher value services and we play an important role in supporting the requirements of not only the U.S. market but even more Europe and Australia the market today are still the main untapped. The great thing about the Philippines, as I said earlier, is that while we have seen dramatic growth once we create a lot of continuous capacity. It is essential that we maintain our cost structure as well as our capacity model.

We saw what happened in India and there benefits to being number two, and for the Philippines experience we are able to anticipate issues like overheating growth - the issues that affect things like supply - and to anticipate the needs of investors so we do not get an inflationary situation, if it is a cities and many cities in the Philippines. We know that there are still a lot of untapped niches, as well as interest in multi-sourcing that will allow the Philippines to join a lot more geography as well as a lot more verticals and horizontals BPO space.

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