Philippines ‘needs to transition’ to knowledge process outsourcing

By Mia A. Aznar
Thursday, January 13, 2011

AFTER making its mark in the contact center segment, the Philippines has to transition to knowledge process outsourcing (KPO) if it wants to continue expanding its reach in business process outsourcing.

Jonathan Defensor de Luzuriaga, executive vice president of CIBI Information Center, said that while contact centers pay $8 to $12 an hour, KPO and information technology outsourcing pay $15 to $24 an hour.

KPO, de Luzuriaga explained, is a segment of outsourcing “with more intellectual requirements.”

Aside from the usual BPO tasks, those working in KPO have to bring in their own talents.
De Luzuriaga, in an economic briefing sponsored by Apple One Properties, added that those who are already employed by the BPO industry can easily build their careers by moving up to KPO.

He added that KPO is not as “manpower intensive” as BPO.

To maximize KPO, de Luzuriaga said that the country, including Cebu, should not lose focus on communication skills. He said this skill is very important, regardless of what outsourcing segment an employee is in.

The specialized niches in KPO he identified are in health care, engineering, legal and financial and accounting.

“It is not difficult for Cebu to have a good chance of getting all of this. There is a level of KPO work happening here,” he said.

He told reporters yesterday that some big companies already do research and test seatbelts and car consoles in Cebu.

“Things being done in Cebu are affecting the globe in one way or another,” he said, although he did not name which companies were already doing this.

“We are beginning to discover that we are more than just voice now,” he added.

While he believes Cebu can be a good place to start with finance and accounting, he named Davao and Cagayan de Oro cities as its competitors in offering KPO services.

For Cebu, he noted that healthcare education is strong in and that there is apotential in offering health care information management.

De Luzuriaga clarified that medical transcription was not out, saying it is more of a low-end type of BPO.

But after US President Barack Obama announced the need to digitize all their health records, de Luzuriaga believes there is an opportunity in health care information management here.

The important thing, he said, is for a city to come up with its niche and to focus on it rather than try to offer all types of service at the same time.

“We can’t be anything and everything to everyone. There’s nothing wrong with being good at one thing,” de Luzuriaga said.

The challenge is coming up with enough talented graduates who can do what companies offering KPO require of them.

Published in the Sun.Star Cebu newspaper on January 14, 2011.