Outsourcing industry urged to explore specialized services

Posted on October 10, 2012

THE PHILIPPINE outsourcing industry should consider exploring specialized services to be more competitive but it should not abandon highly scalable sectors as it moves towards its 2016 road map, experts at a conference said yesterday.

“The industry should have a niche, but what will happen is [that] niche will become common for everybody, because everybody else will start doing the same thing,” Mahesh Venkataraman, director of consultancy firm PwC in Singapore said at the third day of the Fourth International Outsourcing Summit yesterday in Makati City.

“If you need to be ahead, you need to start doing newer things. It is a continuous evolution,” he added.

“If you stop there, somebody else will come and do the same thing, and if they can do it cheaper and better, then it would be a difficult task,” he further said.

Mr. Venkataraman cited the Philippines, which has expanded to other non-voice outsourcing sectors like medical transcription.

For his part, H. Karthik, vice-president for consultancy firm Everest Group, said that while the industry looks to engage in specialized sectors, it should also focus on the sectors that have more growth opportunities.

“It is important to focus on the niches because they are high-value, but you also don’t ignore the large scale opportunities in the transaction processes, customers services, finance and accounting, in the KPO (knowledge process outsourcing).”

“If you want to create 1.3 million jobs by 2016, that will not come from niches, [the industry] should grow it in more scalable areas as well, niches will only be a small portion of that,” he added.

The industry expects to generate $13.4 billion in revenues for this year, 19% higher than last year, and 772,000 full time employees this year. By 2016, the industry aims to grow revenues to $25 billion with 1.3 million employees.