The local business process outsourcing sector should not stick to transactional services like payroll and basic accounting, but instead go for higher-value financial services such as analytics to take advantage of the trend of outsourced financial services.
Chartered Institute of Management Accountants (CIMA) past president Aubrey Joaquim said that the Philippines was focused mainly on compliance, auditing and forensics when it comes to financial BPO services.
While these services gave a lot of work volume to BPO firms, he said these did not provide much dollar value.
“You already have a lot of the transactional services here. What you need to develop are analytical skills and management accounting. India is very much ahead of the Philippines (in this aspect). A lot of high-end analytics are being done there,” Joaquim said in an interview Monday.
Joaquim said the Philippines could not just bank on its English-language skills and reasonably priced labor pool to stay on top of the BPO game. It had to keep evolving, particularly in terms of the services it could offer.
“In five to 10 years, there will be no more labor arbitrage. Everything will be about competitive advantage. The Philippines has to be able to provide services that will offer (return on investments) and bottom-line improvements. It has to be able to provide more decision making and strategic insights,” he said.
A CIMA report titled “From efficiency to effectiveness: Transforming the finance delivery mix” revealed that 60 percent of the more than 5,000 executives surveyed were using or planning to use outsourced financial services.
Right now, more companies have gone the shared services route, where certain back-office jobs are “outsourced” to an affiliate firm that did some of the non-core functions, including financial services, of the parent company.
Over the near term, however, Joaquim said there would be a shift to external service providers for these services. Considering this, the Philippines should start developing a talent pool that could handle high-value financial services.