Niche providers will be big in ’06--outsourcing matchmaker

SMALLER outsourced services providers are expected to dominate the outsourcing industry in the Philippines this year as more US-based clients look for more specialized offerings, according to an executive of an outsourced services matchmaking firm.

Philippine IT Offshore Network (PITON) chief operating officer Ralf Ellsperman said in an interview that enterprising companies wanting to enter the outsourced services industry should start by looking at niche demands, particularly in the field of logistics, billing and collection, human resource, retail, travel and hospitality, among others.

Ellsperman explained that the Philippine outsourcing industry has seen a tremendous growth in the last three years, with the outsourcing requirements of Fortune 500 firms already being distributed to established outsourcing firms.

Ellsperman noted that the Philippines has also achieved a level of competence that many US firms are looking for, though new demands for back-office requirements are prompting them to find outsourcing providers that have specific capabilities.

“The large services have been played out already. Smaller firms can start by looking into more niche services. They don’t have to think big, only to look for what is in-demand from US clients,” Ellsperman said.

Ellsperman also predicted that there would be an increase in acquisitions of smaller service providers by bigger companies in the Philippines, a typical trend in the IT industry where bigger hardware or software makers acquire smaller companies that are offering specific solutions.

“These big outsource providers could be on the lookout for small companies to buy. That’s how the IT industry works. I see [a] continued upward trend in this industry in the next three to five years and it’s no surprise that new types of services offered by niche outsource service providers will come out,” Ellsperman said. (INQ7 - Asian Journal)