Philippines to benefit from IBM outsourcing deal

The Philippines is expected to benefit from IBM's recent outsourced services deal with manufacturing giant Procter & Gamble (P&G), which effectively makes the country the center for its business process outsourcing (BPO) services in the Asia-Pacific.

Last September, P&G awarded IBM a ten-year contract worth US$400 million to provide the manufacturing firm with employee services such as payroll processing, benefits administration, and human resources data management.

The deal is expected to support P&G's operations in more than 80 countries.

The Philippines will be one of three global centers from which IBM will render these services. The other two centers will be located in the U.K. and Costa Rica.

The Philippines will also be the base of operations for IBM's outsourced businesses in the Asia-Pacific, according to Joaquin Quintos IV, IBM Philippines president and general manager.

"The Philippines was chosen because of our highly-skilled professionals and English proficiency, two characteristics which have always been cited in the global outsourcing industry," Quintos said in an interview held at the sidelines of the company's recent nationwide users' conference.

He added that the recent P&G deal marks a vote of confidence on the Philippines as a top outsourcing destination for multinational companies. IBM Philippines is expected to absorb around 150 P&G employees in creating a dedicated unit for the deal. Aside from IBM, Hewlett-Packard (HP) will also make use of a local unit in the country in its $3-billion outsourcing deal with P&G to manage the latter's IT infrastructure.

Under the deal, HP will manage P&G's data centers and IT infrastructure, and provide desktop as well as end-user support. In line with a similar provision in the IBM-P&G arrangement, HP Philippines has absorbed some 200 ex-P&G employees since the transfer took effect last August.

According to a study by Forrester Research published last August, more than half of 82 U.S. companies surveyed plan to invest at least $1 million in BPO services next year.

The top areas of interest are human resources (HR), procurement, customer service, and accounting. Specifically, Forrester estimates that these "broad-shared services" -- highly common across all industries -- will reach about $57 billion in market value.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Forrester ResearchHewlett-Packard AustraliaIBM AustraliaProcter & Gamble AustraliaProvision

Show Comments