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This study focuses on the business environment of IT – enabled service companies in the business process outsourcing industry in Cebu. The result of the environmental scanning activity presents high sustainability of suppliers and being highly profitable in terms of performance, however,BPO companies should be more adept with the latest trends in providing outsourced services and be ready with the uncertainties particularly in competitor’s strategies. Government supports the BPO Industry sub sectors. Government developmental plans should match with of the private sector to ensure collaboration of efforts to tap opportunities. This improves the economic situation of the country. The dominant factors affecting these businesses are socio-cultural and demographic factors, however they also highly affected by Technological factors despite the availability of infrastructure in Cebu, since most of the BPO companies are relying on the Internet access to operate. External environmental factors are perceived to vary depending upon the nature of the sub sector and the location of the business within the province. Growth of this BPO Industry can have a significant impact on employment and eventually on the purchasing power of people. However, participation of the academe is crucial in improving human capital to address the shortage of manpower pool for the industry.

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Keyword - Environmental scanning, business outsourcing, business environment