Philippines as a Premier Location for KPO Services

On April 10, 2012, in Outsourcing, by Business Development Group

Business Process Outsourcing deals with simple business processes such as transaction processing, technical support, voice and email-based customer support, and telemarketing. On the contrary, Knowledge Process Outsourcing (KPO) deals with high-value, domain-based processes that require greater specialization from a highly-skilled staff.

Despite much hype generated over the years on the KPO industry, many companies are still hesitant on jumping on the KPO bandwagon, having reservations about handing over the more important processes of their business. Another challenge is the selection of a potential KPO location.

Philippines is seen as an emerging premier location for knowledge process outsourcing services, Ovum— an international research analyst firm—reported on Monday. Ovum identified health care, legal process, animation, and publishing outsourcing services as the country’s strong suits.

Related Article: Philippines Seen Developing As Major KPO Service Site

Business Process Outsourcing deals with simple business processes such as transaction processing, technical support, voice and email-based customer support, and telemarketing. On the contrary, Knowledge Process Outsourcing (KPO) deals with high-value, domain-based processes that require greater specialization from a highly-skilled staff.

Despite much hype generated over the years on the KPO industry, many companies are still hesitant on jumping on the KPO bandwagon, having reservations about handing over the more important processes of their business. Another challenge is the selection of a potential KPO location. Some of these factors include:

Availability of Talent

The quantity and quality of professional and technical talent in a given location is one of the major factors in selecting a KPO location. The talent pipeline is also a factor, with regard to industry support for education, training and certification of relevant qualifications for KPO services. BPO and KPO companies in the Philippines have largely benefitted from the high number of graduates joining the existing pool of professionals every year.

Read related article:   BPO Real Time Outsourcing Customer Engagement – Giving your Customers More!

Cost Advantages

Cost advantages in operations as well as in compensation for key skills and specializations remain a key consideration. One of the factors that make Philippines an ideal location for outsourcing services is the low cost of living which translates to low labor rates.

Read related article: Philippine Outsourcing: What is a BPO Virtual Captive?

Infrastructure Costs

The information and communication technology (ICT) infrastructure is another important consideration as this affects the stability and reliability of services. The Philippine government, in its support of the growing BPO and KPO industries in the country, established the Information Technology and E-Commerce Council ITECC and the Philippine Cyber Corridor to create interconnected centers of technology-related services and promote development of the ICT infrastructure in the country.

Read related article: Call Center as a Marketing Channel

Tax Incentives

Attractive tax incentives are being offered by the Philippine government to BPO and KPO companies as well as foreign investors in support of the outsourcing industry. These tax incentives include income tax holidays, incentives under the Philippine Build-Operate-Transfer Law (BOT Law), VAT exemption, employment of foreign nationals and assistance in the promotion of economic zones.

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