SPi Global plans entry into Latin America in 2011

By Kathleen A. Martin, BusinessWorld

Posted at Mar 16 2011 02:12 AM | Updated as of Mar 16 2011 10:12 AM

MANILA, Philippines - Homegrown business process outsourcing (BPO) firm SPi Global Holdings, Inc. is set to open an office in Latin America to cater to Spanish-speaking customers mostly in the United States, an official yesterday said.

The firm will be starting operations in the next 3 to 6 months in that region and will offer both voice and back office services, Maulik Parekh, president and chief executive officer of the Philippine Long Distance Telephone Co. (PLDT) unit, said in a press briefing.

“We can’t disclose the exact location yet but it will be a 200-people operation,” Mr. Parekh said.

The expansion comes on top of its network of offices already existing in Vietnam, India, the United States and Europe, manned by a total of 14,000 employees.

“We are also looking at China as a potential location or partner, since it is becoming a strong competition in attracting non-voice BPO firms,” Mr. Parekh added.

Mr. Parekh clarified, however, that most of the operations will continue to be conducted in the Philippines despite the spate of expansions abroad.

Of the firm’s 14,000 employees worldwide, 11,000 are in the Philippines, and Mr. Parekh said that despite current and planned expansion, bulk of the employees will always be from the country.

“The trend -- wherein most will be from the Philippines -- will continue,” he said.

The firm, for instance, has recently added 900 new seats in its facility in Dumaguete and also 20% more seats in its facility in Iloilo, Mr. Parekh said.

Non-voice transactions comprise 67% of the firm’s revenues, while the 33% are voice transactions.

BPO non-voice transactions include providing finance, accounting and procurement services, and other industry-specific services, while voice transactions refer to call center services.

SPi Global’s non-voice transactions are mostly industry-specific, Mr. Parekh said, concentrated on health care, content solutions or publishing, and interactive markets.

Mr. Parekh said that local BPO firms should look into providing more non-voice transactions, as global trend is leaning towards more of that as compared to voice transactions by 2016.

The official went on to disclose the company plans to grow its health care services training program to cover more participants.

The company plans to increase the number of trainees to 200 in the next 12 to 24 months from the present 50, Mr. Parekh said. The employees are given professional coding program training, mentor training, and Web-based continuing education.

This, as SPi Global launched an academy last year under its SPi Healthcare unit to offer back office services for medical insurance users, Mr. Parekh said.

“These employees will assist and support in revenue cycle management of US-based hospitals and clinics,” Mr. Parekh said.

He explained that the unit will help clients maximize their revenues by going through existing insurance contracts and the like, and find out what is best for the client in terms of getting higher profits.

These developments should support the firm’s targets of hitting 14% growth in revenues this year, he reiterated.

Revenues from non-voice transactions are seen to grow by 16%-17%, and profits from voice transactions are seen to grow by a little below 14%.

“The trend globally is [that] the BPO market is getting more competitive with revenues growing 20%-25% year on year. There are more BPO destinations, which include the Latin America, China, Vietnam, and South Africa from the original India, the Philippines, Ireland, Mexico and Canada,” Mr. Parekh said.

The local BPO sector is expected to bring in $25 billion in revenues and employ 1.3 million by 2016, according to earlier reports. Globally, the BPO sector is seen to bring in profits of $124 billion in 2016 from $45 billion in 2010.

Mediaquest Holdings, Inc., a unit of the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld.

PLDT had consolidated its business process outsourcing companies SPi Technologies, Inc. and ePLDT Ventus, Inc. into SPi Global in 2010.