Call centres – the term seems inextricable from the idea of offshore IT services in the Philippines. 

Indeed even when I talk to fellow Filipinos both here and back home the conversation almost invariably turn to how many call centre facilities keep popping up in Manila. They say the city “never sleeps” because people are now working 24/7 to meet the needs of North American clients. In fact in 2007 call centre agents were somewhat exempt from a citywide curfew that was brought down during a failed “coup attempt”. 

During a trip to Manila last week, I found this to be true and much more. 

In reality, it’s not all about call centres. True, call centre may account for the bulk of the country’s multi-billion dollar earning IT industry, but the Philippines is offering a variety of non voice-based business process outsourcing (BPO) services as well. 

The range of available services go from software development, to network service and maintenance, back office processes and payroll management, to financial analysis and legal research, medical transcription, to digital animation and online game development. 

The BPO industry employs no less than 600,000 people and earned more than $7 billion last year. 

“The $9.2 billion we expect to earn in 2010 is just based on what we are able to measure. There are thousands more of Filipinos providing some sort of online services to foreign clients,” Monchito Ibrahim, commissioner for the Commission on Information and Communications Technology (CITC) told me. 

Over a cup of coffee, Ibrahim spoke of a teeming underground economy of home-based workers offering editing services to North American publications and homegrown bloggers blogging for advertisers abroad. “Regretful but true, there are even professors working on the assignments of students thousands of miles away,” Ibrahim said. 

So is this growing breed of BPO workers in the Philippines the scourge of Canadian IT professionals? 

Not necessarily so. 

In this time of cost cutting and corporate downsizing, offshore BPO provides a viable alternative for many Canadian companies, according to Mark Schrutt, director of strategic outsourcing for IDC Canada. 

Canadian company Telus, employs some 5,000 workers in its call centre and tech support facilities in the Philippines. 

A lot of unemployed IT workers will probably disagree, but Canada has an IT talent shortfall, according to many tech industry observers. 

As of 2008, there were about 605,000 ICT workers in Canada. Accounting for 2.4 per cent annual growth in employment and an expected retirement of some 89,000 workers, Canada is facing a 162,000 shortfall over the next five years, according to research conducted by Rob Babin, director and assistant professor at the Ryerson University’s Ted Rogers School of IT Management. 

“Off shoring will solve some of this demand and close the gap,” said Schrutt of IDC. 

About 20 per cent of major Canadian companies are now offshoring. IDC expects this number to grow to 80 per cent in the near future. 

Next, I’ll talk about offshoring trends and some key considerations for companies looking into offshoring. 

I’d also like to know if your company is considering offshoring or if you have some offshoring experiences you’d care to share with our readers.

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  • That’s surprising that canada is facing a 162,000 shortfall over the next five years. It’s true that a lot of unemployed IT workers will probably disagree, but Canada has an IT talent shortfall. Nice blog.

    • Yes, your observation is dead on. Everytime we write stories like these people always ask ‘How can we have a shortfall when a lot of IT professionals are unemployed in Canada?’

      But very often the available IT talent doesn’t always jibe with the job openings. Of course some companies also resort to raising the bar when scouting for local talent. I think these firms then turn around and hire someone from abroad rationalizing that it’s much cheaper labour. You think so?

  • If they are setting the bars high locally in Canada, does that mean that the talents in Manila are much more qualified than they are because they would rather outsource their projects there? Yes, it’s cheaper but quality-wise, how would Manila really compare to Canada?

    • Very good question BPO Manila. I would love to hear some answers on that one.

  • I believe, the reason why a lot of foreign companies choose Philippines (Manila) a place to outsource their projects and even put up a remote office here is due to the fact that they cost cheaper but can deliver high quality output and still meet their high standards.

  • Agreed, Philippines as well as other countries are interesting opportunities for offshoring, depends on how you factor in travel costs, time zones for communications, control, as well as investment structure options, part of a larger global operations capacity planning, assistance available at: http://www.octroypartners.com. Regarding displaced workers, an IT professional in Canada can become a co-founder in a new endeavor and take advantage of some of these same offshore opportunities, assistance also available at Octroy.

  • Leo

    Thou offshore IT services regards the big part in generating income it has more flexibility to survive in offshore services
    Offshore IT services

  • hugomesser

    Would be interesting to know the numbers 5 years down the road!

    I think that offshoring and nearshoring are becoming more and more popular by the year. It’s becoming ‘business as usual’. As people learn how to manage a remote team or provider, it becomes easier. Pitfalls can be avoided.

    I have written several books on this topic, maybe interesting to read: http://ekipa.co/ebooks

    We’ve also recently launched a marketplace for software teams where companies can hire remote teams: http://www.ekipa.co. I believe that in the future, corporations will hire specialised teams for their projects directly, skipping the large IT outsourcers. The IT dinosaurs need massive amounts of people, consultants, sales people, to service corporates. With ‘Accenture from the cloud’ Ekipa, all the overhead can be skipped; directly to the teams that can build your IT infrastructure.