IT outsourcing Philippines is growing rapidly, but determining a financial agreement that works for both parties is critical for success.  There is more than one way to approach outsourcing to the Philippines.  The three basic approaches include pricing based, governance based and a hybrid model.  Each one has attributes that can be tailored to meet a variety of needs when outsourcing to the Philippines.

Pricing Based Model
The pricing based model is the simplest one to work with when it comes to outsourcing to the Philippines.  With a pricing based model, the outsourcing partner can expect to receive a fixed sum of money for the work completed.  For example, the outsourcing partner may be performing data entry.  For each completed entry, they might receive a payment of $0.0X.  The pricing based model is a very good choice if the outsourcing partner is performing a specific task and generating a specific result. 

Governance Based Model
The governance based model is more complex, but it is appropriate when outsourcing to the Philippines involves multifaceted service.  For example, if a company opts to set up a call center in the Philippines, the agents will do more than simply complete one type of task.  The call center agent is required to solve problems, provide feedback and address integral customer needs.  As such, the governance based model includes the management of relationships, finances and services.  It is difficult to put a fixed price on the culmination of these unique elements.  Therefore, the governance based model takes into account which services are co-managed by both partners, and/or which services are fully outsourced.

Hybrid Model
The hybrid model is appropriate for IT outsourcing Philippines projects that are complex and involve a wide range of different tasks and services.  This model combines aspects of the pricing based model and the governance based model to achieve a well-rounded approach in the outsourcing relationship.

These different models give businesses a range of choices when outsourcing to the Philippines.  The choice of model will be a direct result of the IT outsourcing Philippine strategy in place.  Factors that contribute to the decision will include the scope of the project at hand, delivery and milestones set forth, cash flow for either party, required skills and expected outcomes.  Outsourcing to the Philippines is an excellent business solution, and these models give business owners an added sense of control and flexibility over their endeavors overseas.