Cebu bound to attract KPO investments, jobs

By Ehda M. Dagooc (The Freeman) Updated November 02, 2009 12:00 AM

CEBU, Philippines - After Cebu successfully etched its name as one of the world’s preferred investment sites for Business Process Outsourcing (BPO), especially for voice services, the province is now expected to attract another segment in the outsourcing industry, the Knowledge Process Outsourcing (KPO).

Business Process Association of the Philippines (BPAP) former chairman Bong Borja said Cebu could leverage on attracting this high-level outsourcing service especially that Cebu is now working at making the MBA hub in Southern Philippines.

Borja, currently the chief executive officer of call center giant Aegis People Support, said that although the BPO voice service still has a huge room for growth in the next few years, the huge KPO market is expected to greatly augment the employment generation as well as the investment revenue of the province.

KPO is an emerging segment in the outsourcing sector that the Philippines has yet to penetrate. This market is currently dominated by India.

This middle and higher level outsourcing service will need professionals such as financial analysts, people who have degree and masters in human resource management, accountants, among others.

KPO is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost.

Unlike the outsourcing of manufacturing, this typically involves high-value work carried out by highly skilled staff.

KPO firms, in addition to providing expertise in the processes themselves, often make many low level business decisions—typically those that are easily undone if they conflict with higher-level business plans.

The profile of people being hired to serve within KPO service companies are more diverse than just being drawn from technical IT services – these are people with MBAs, and medical, engineering, design or other specialist business skills.

KPO delivers higher value to organizations that offshore their domain-based processes, thereby enhancing the traditional cost– quality paradigm of BPO.

The central theme of KPO is to create value for the client by providing business expertise rather than process expertise. So KPO involves a shift from standardized processes to advanced analytical thinking, technical skills and decisive judgment based on experience.

“These are the very expensive or high-paying type of outsourcing. I believe we have the talents and raw ingredients to attract the KPO market,” Borja said.

Although some existing outsourcing companies in the Philippines already cater to KPO jobs, Borja said “we have only done a small number of KPO works,” and it still has to be improved.

In an earlier interview with British Ambassador to the Philippines Peter Beckingham, he encouraged industry players to work on positioning the Philippines as the preferred KPO destination in the world, most especially for companies in the United Kingdom.

Beckingham said knowledge outsourcing is one of the BPO sectors that will make the Philippines as the preferred offshore site for British companies; this aside from the traditional call center operations that are also growing.

He said it is much cheaper to do research works in the Philippines, rather than doing it in London.

“India obviously still has far more investment,” Beckingham said but the influx of British BPO firms is expected in the Philippines, as the country has gained popularity among companies in the UK.

He mentioned that some BPO or KPO companies realized that Philippines offers more competitive workforce equipped with infrastructure that is at par with that of Bangalore (India).