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BPO Industry Remains Strong, Growth Expected Ahead

|About: Home Depot, Inc. (HD), Includes: T

The outsourcing industry has been widespread across the globe and it seems that there is no stopping this industry that has helped businesses to get things done at an amount that is not heavy on the pocket. One of the popular services that businesses seek within the outsourcing industry is the solutions offered by contact center services providers. Given the success of such service, it is unlikely for the industry to not have detractors.

There have been companies and key individuals or groups who are against the idea of outsourcing. We cannot change the fact that there will always be two sides to everything - if there are those who are in favor of outsourcing, there will definitely be a group that is against it. In the past, there were news and articles that point out that the business process outsourcing industry and call center outsourcing's fame and popularity is bound to see a decline in 2011 as the market for such service could be saturated.

There were reports in both the past and present that contact center solutions providers and major companies have been laying off a number of their call center agents. Just recently, there was an announcement by T-Mobile that there will be a total of seven call centers that will be affected by their decision to let go of around 1,900 of their employees. The driving factor for this decision was the "restructuring following the failure of AT&T's (NYSE:T) proposed acquisition of the smaller operator."

Another example that is similar to that of T-Mobile's is Home Depot (NYSE:HD). Home Depot was reported by The Advocate to conduct a lay off that would affect 225 customer-support and distribution-facility workers over the next 18 months. This announcement follows a previous announcement that it will phase out some 400 call center agents in their Baton Rouge facility, which now amounts to 625 employees to be affected by Home Depot's lay off announcement.

There are reasons as to why such layoffs happen, but despite situations like these, there are still other areas where the industry bounces back. Also, when such situations happen, it does not necessarily mean that the demand for such type of service are moving downwards.

According to the statistics to support the business process outsourcing industry published by the Department of Science and Technology (DOST) that was released in January 2012, it is highly unlikely for the outsourcing fame and popularity to see an end. In the report, it says that in 2011, the IT-BPO industry was able to generate around 640,000 direct jobs and was able to contribute $11B in export revenues. With such strong figures to support the industry, key outsourcing solutions providers and associations are now more confident to take on other areas where there could possibly be a rich market for outsourcing. "We are the world's number one call center provider and we intend to attain market leadership in the United Kingdom and Australia as well," says DOST Information and Communications Technology Office (ICTO) Deputy Executive Director Alejandro Melchor.

Most people, especially industry experts, are anticipating the further growth of the industry as they see that the demand for such service is moving at a stable pace.

Author: Jamee C.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.