Philippines: The natural choice for shared services

SUITS THE C-SUITE By Tim Eddy

Business World (09/14/2015 – p.S1/2)

This week marks the opening of EY’s (previously Ernst & Young) latest global delivery network (GDN) location, our first in the Philippines. It’s the ninth such center we have established as part of our GDN, and will now be our fifth location, following India, China, Argentina and Poland.

EY uses different parts of the GDN to provide services to clients across the globe and outside the particular GDN location, across our service lines — Assurance, Advisory, Transactions and Tax — as well as to support internal clients across EY, such as in finance, human resource (HR) and creative services.

In its initial phase, the GDN center in the Philippines will offer Advisory Services, including Performance Improvement, Risk, and Advisory Support capabilities. It will also provide Information Technology Services, Business and Creative Services focused on Administrative Support and Creative Design, as well as Knowledge Services comprising Market and Competitive Trend Analysis along with Industry Analytics.

The GDN plays an important role for EY, allowing us to tap into diverse groups of highly skilled people around the world to make sure we can continue to deliver exceptional service to our clients in a cost-effective way. Our new center in Manila will enable this for clients across the globe.

We chose the Philippines as the home of our new GDN location due to the remarkable growth of its shared-services sector in the past few years, which in turn has fueled the expansion of the local business process outsourcing (BPO) and knowledge process outsourcing (KPO) industry as a whole.

By 2016, the BPO sector alone is expected to generate 1.5 million new jobs, with a projected revenue of $25 billion, according to the IT and Business Process Association of the Philippines (IBPAP).

Papers published by the World Bank and the Asian Development Bank in 2011 and 2013, respectively, stated that, in a high growth scenario, the sector is expected to generate $55 billion in revenue by 2020 and account for about 11% of the country’s gross domestic product. Whichever revenue projection turns out to be accurate, it’s clear that the outlook for the sector is positive.

With eight Filipino cities now on US consultancy firm Tholons’ latest Top 100 Outsourcing Destinations List, the country trails only India as the world’s leading shared-services location. Metro Manila, the home of our new center, is second only to Bangalore on the list. It’s therefore unsurprising that we find ourselves in the company of IBM, Shell, Accenture, Chevron and Xerox, among others, with shared services operations in the capital city.

The diversity and strength of the local talent pool has been an important factor in this impressive growth, and is one of the primary reasons we chose the Philippines and Metro Manila. As the world’s third largest English-speaking nation and with 350,000 college graduates each year, the Philippines provides a highly educated and employable talent pool.

We will look to recruit, train and develop people to support the service areas mentioned earlier, and we will continue to build additional capabilities in the future, based on the growing needs of our client base. By combining the strength of SGV with EY’s global network and innovative methodologies, this will ultimately provide increased visibility and recognition for world-class Filipino talent.

Alongside the strength of the talent pool, the Philippines’ global outlook, business-friendly environment and time zone advantages also give it a competitive edge among emerging market peers. In line with the views of IBPAP, the World Bank and the Asian Development Bank, both EY and SGV firmly believe that the country’s shared-services sector will continue to grow, and we look forward to playing our part in this.

Ongoing development and investment is vital in areas such as infrastructure and innovation, along with a continued program of government initiatives and incentives. The launch of the ASEAN Economic Community this year will have a positive effect as trade and employment restrictions in the region are eased.

THE POWER OF SHARED SERVICES

Managing growth brings capital, cost and capacity challenges and, like many businesses, EY has worked to overcome these by changing the way services are delivered.

Our network of service delivery locations has given us a distinct advantage in seamlessly running and enabling our business, to the benefit of our clients. The GDN operates as a single business around the world, which improves our decision-making and speed of execution.

Our people are pooled by leveraging skills, scale and time zones. This gives us the agility to increase access to large, diverse, highly talented and skilled resource pools; enhance the overall quality of our client work with more consistent processes and methodologies; stay connected and responsive to client needs around the clock; and access new and innovative ways of working.

With regard to our core business services and market enablement needs, the shared services model provides a one-stop shop for high quality, innovative services in areas such as finance and accounting, IT infrastructure support and service delivery, HR services, procurement and risk management.

Ultimately, EY’s GDN helps our teams and their clients to access the right talent at the right time, and to bring in the quality they expect in a cost-effective manner, all with a focus on best practice and innovation. Thanks to the people, skills and working environment in the Philippines, our new center in Manila will play an important part in that.

Tim Eddy is the Business Enablement Shared Services and Talent Hubs Leader of EY. SGV is a member firm of Ernst & Young Global Limited.