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Gartner Dataquest defines Business Process Outsourcing (BPO) as "the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administrates, and manages the selected process or processes based on defined and measurable performance metrics." BPO consists of four main categories: 1) supply chain management; 2) operations; 3) business administration; and 4) sales, marketing, and customer care. Cultural and historical factors, along with a steady supply of skilled manpower, make Philippine BPO firms a top choice for multinational companies such as Caltex, Citibank, Procter & Gamble, and AIG. By performing non-core but essential business processes in areas such as backroom office operations and shared financial and accounting services, engineering design, and software development, among others, BPO vendors provide foreign investors with an estimated savings of 30 to 40 percent. International investment consultancy firm McKinsey & Co. predicts that the demand for outsourcing services will reach $180 billion in 2010, with the customer contact services, finance and accounting, and human resource sub-sectors taking up the biggest shares. When it comes to the trend in primary business requirements, experts are seeing a shift from cost-effectiveness to skills quality and competence. This development all the more strengthens the Philippines' position as an emerging global leader in the BPO industry. BPO has the following components:
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