TCS opens BPO centre in Philippines

Tata Consultancy Services (TCS), the country’s largest information technology (IT) services provider, today announced the launch of its business process outsourcing (BPO) centre in the Philippines. The centre, with a capacity of 400 people, will be eventually scaled to 1,000 employees.

The announcement of TCS shows how fast the Philippines has become an important centre for global BPO operations. The Philippines is the world’s second-largest BPO destination outside India and the BPO sector is a $9-billion industry, employing 450,000 people.

“From a TCS perspective, it is not just about shipping work from India to the Philippines. There is domestic opportunity as well. Currently, the Philippines is a $9-billion market, but they have a target to increase this to $25 billion by 2016,” said Vish Iyer, head, Asia Pacific, TCS.

For TCS, which does not play too aggressively in the BPO voice market, the centre will cater to both its voice and non-voice work. “We have been told that the non-voice work that the Philippines does and the talent pool for the same are yet unknown. While voice is not a big focus of ours, we do cater to a small segment of voice work, that comes as a part of any deal. Besides we have a 40-people team sitting in the Philippine and supporting TCS Banc porducts,” said Iyer.

Other than the Philippines, TCS also offers BPO services from China. When asked if TCS would look at Sri Lanka as a destination for its BPO operations, Iyer said, “I would not like to say much, as we have not thought about that. But as of now, it’s India, China and now, the Philippines.”

TCS’ BPO revenues were 11.5 per cent of its total revenue of $6.3 billion for the last financial year.

The Philippines has been a tough competitor for India in the BPO segment. According to the National Association of Software and Services Companies’ Strategic Review 2010, India and the Philippines accounted for nearly 40 per cent of the new centres set up globally. While India has consolidated its position in the IT and non-voice BPO segment, the Philippines has been focusing on the non-voice segment.

But that seems to be changing. In the recent IBM Global Locations Trend, the Philippines overtook India as the world’s number one country for shared services and BPO. According to the report, the Philippines offers a similarly attractive business environment for international business support functions as India, but has not had the same labour cost increases as have occurred in various Indian ‘hot spots’ in recent years.