The Philippines: The Growing BPO Centre

The Philippines is becoming a major player in the BPO sector and WinSource Solutions is leading the pack. WinSource president Munirah Looi tells CEO why her company is expanding to meet the future.

In August 2008, Filipino company WinSource Solutions was acquired for $7.9 million by Indonesian–Malaysian firm Valdo Global Services, an outsourcing management company specialising in the provision of services to the banking, insurance, telecommunications, and oil and gas sectors. Valdo WinSource Solutions aims to pool the firms’ resources in a bid to tap into markets such as North America, Europe, Australia and New Zealand.

To enlarge its business process outsourcing (BPO) services in the Philippines, Valdo WinSource Solutions plans to invest PHP300 million to fund the expansion of a new facility, which will bring online around 1,200 seats within 18 months of launch.

Before the two-month partnership leading up to its acquisition, WinSource managed a call centre with 270 seats that provided outbound call services in Cybergate One. ‘When WinSource was initially planning for growth, we had a choice of requesting an injection of funds from the previous owner, or to partner with another organisation able to bring out our expertise and grow the BPO business in the Philippines,’ explains Valdo WinSource CEO and president Munirah Looi.

‘That’s why we embarked on a joint venture with Valdo, which was also looking for strategic partners in the region at that time. In Indonesia, we now have 3,000 seats to support the domestic market.’ The company has another operation in Malaysia, a facility of around 50 seats, Looi point outs, but the firm chose Manila as its base because of the strong English language skills of the local labour force.

‘WinSource has a customer base in the US, UK and Australia, so with the joint venture I believe we became stronger and able to support not just the regional market but these English speaking markets as well,’ she says. ‘We’re now in the preparation stage to grow our seats and bring our second site online. By the end of next year we should have an additional 1,000 seats for the call centre as well as the BPO business.’

According to Looi, most organisations are still looking at ways of bringing down service and transaction costs. ‘If you look at the US, UK, Australian and New Zealand markets, and one glaring factor is personnel costs,’ she says. ‘As a result, most firms are keen to figure out how they can channel their non-core activities to lower cost corporations without compromising on quality. And, of course, the Philippines is one of the preferred outsourcing destinations in the world today, mainly due to its competitive labour market and lower operational costs in relation to telecoms infrastructure and real estate.’

Maximising the margins

Last year, WinSource pulled in PHP5 billion from its BPO business alone, and expects to more than double this by the close of 2008, making around PHP12 billion. Eventually, says Looi, Valdo WinSource could claim as much as 5% of the global market for BPO. She believes the well-publicised sub-prime problems in the US will intensify the push for organisations to drive operational efficiencies and maximise their margins by outsourcing.

‘More companies will look to offshore outsourcing during the next several months, and we expect major growth in 2009 because of the consolidation that is likely to happen in the US market,' she says. ‘Firms are cautious and inward focused in terms of improving cost competitiveness.’

Why choose to outsource to the Philippines? Looi’s answer is, quite simply, that the talent is there. ‘The BPO business is large and growing, and enjoys strong support from the government.’ Valdo WinSource has also been working hard on driving down its own operational costs. ‘To make our organisation leaner we improved productivity and invested in a lot of staff training and development to ensure our employees would be ready to support this growth.

We’re intensifying our marketing efforts and are in the process of carrying out some re-branding. From this point onwards, our mission is to communicate our current status to the market. Prospective customers need to know that we’ve gone through a transformational journey, and we’re now fully equipped and up for the challenge.’