Offshoring and Outsourcing

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O&O services can be broadly classified into three main categories: information technology services (ITO), business process services (BPO), and engineering services (ESO).

Information technology services (ITO) consist of traditional IT services such as application development and maintenance, software product development, hardware and software maintenance, network management, and package implementation. Game development is an outsourced service that combines IT and creative work.

Business process services (BPO) can be further classified into voice and non-voice services. Voice services include most contact centers and customer care operations and consist of either inbound (a customer calling in) or outbound services (call center calling out to a customer). Non-voice services include a range of business processes such as finance and accounting transactions and payroll processing as well as specific industry processes such as medical or legal transcription, legal research and analysis. Animation and other high-end processes are also outsourced.

Engineering services (ESO) include engineering and R&D services such as the design and development of engineering products, product testing and improvement, and pure and applied research.

Service providers — including captive multinational firms such as Citibank, Dell, HSBC, and Intel, and globally known third-party providers such as Accenture, eTelecare, and, most recently, Infosys — have been tapping into Philippine labor pools to build O&O facilities in the Philippines. The Philippines has been especially successful in voice services, which accounts for approximately 70 percent of total activity in the country today and has been growing at more than 50 percent a year. Industry participants, in explaining their reasons for choosing the Philippines, uniformly cite Filipinos’ excellent capabilities in spoken English, their familiarity with American culture, their affability, and their deep family-orientation as a good fit with the demands of customer service, technical service, and sales.

Non-voice business process services, IT services outsourcing (ITO), and engineering services outsourcing (ESO) now constitute nearly 30 percent of Philippines O&O and, like voice services, are growing rapidly. This also reflects the country’s talent proposition, but in even more specific skill sets. For example, there are more than 400,000 young professionals at work in finance and accounting services (more than that of Canada, Germany, and the UK combined) and 60,000 to 70,000 new graduates in these disciplines per year. This has attracted the back-office finance and accounting functions of many global names, including AIG, Chevron, JP Morgan Chase, and P&G. Similarly, the Philippines has nearly 290,000 engineers (more than that of Germany, Malaysia, and the UK combined), 100,000 medical doctors and 340,000 nurses (nearly as many as the UK in both professions), whose skills have been leveraged in various BPO activities, such as life sciences, engineering, and IT.

Below is the chart of new sectors :

IT applications services (ITO)

Business Process Service (BPO)

Engineering Services
Application development and maintenance Voice Upstream product engineering

* Application development
* AD integration and testing
* Application Maintenance
* Inbound
* Outbound
* Concept design
* Simulation
* Design engineering

System Integration Non Voice Downstream product engineering

* Analysis
* Design
* Development
* Integration and testing
* Application Maintenance
* Mixed non-voice
* Transcription
o Legal
* Finance and Accounting
o Transaction management
o Finance
o General accounting
o Treasury and risk
o Tax management
* Human Resources
o Benefits
o Payroll
o Recruiting and Staffing
* Insurance
* Supply chain (procurement, logistics
* Embedded software
* Localization

Software Product Development KPO Plant and process engineering

* New product development
* System testing
* Porting/variants
* Localization
* Maintenance and support
* Gaming
* Animation
* Business research, financial research
* Data analytics
* Legal process and patent research
* Other high-end processes

IT Infrastructure Services

* Help desk
* Desktop support
* Data center services
* Mainframe
* Network Operations


* IT consulting
* Network consulting