India Vs Philippines – The Philippines Edge On Outsourcing Options For Medium Businesses05 Jun
India Vs Philippines – The Philippines Edge On Outsourcing Options For Medium Businesses
By Justin Cooke
India has long been considered the outsourcing capital of the world. India raked in over US$7 billion of the offshore BPO industry, more than 60% of the offshore component worldwide. Estimates point to nearly US$50 billion by the year 2012, helped along in no small part by the global financial crisis we’re currently experiencing. With industry growth at nearly 35% each year for the last five years, it’s no wonder the Philippines are looking to gain market share.
Outsourcing in the Philippines is taking flight primarily through call centers that have sprung up across the country. Primarily centered around Manila, Cebu, and Davao City, the abundance of talent at a lower cost has made the Philippines a much more viable option in recent years, especially where medium-sized businesses are considered. Below are some examples where the Philippines maintains an edge over India:
- Skilled Workers – The lack of skilled workers in India has caused prices to increase in recent years, while the talent pool in the Philippines remains largely untouched. The current lack of options in the Philippines allows for higher employee retention and continued growth with their offshore counterparts.
- Cost – Simply put, the Philippines remain a less expensive option. In some specific industries, employee costs in India have risen to approximately 60% of comparable costs in the US, with the Philippines only achieving roughly 30% for those same positions.
- Cultural Adaption – When it comes to call centers and customer facing positions, having employees that understand well the intricacies of American culture provides huge qualitative benefits. Less cultural training also leads to less employee acquisition costs, which can become quite extensive compared to India.
While India remains the BPO leader for offshoring, the Philippines are quietly and quickly emerging as a superpower in the outsourcing industry. As the financial crisis continues, the Philippines government is heavily investing in infrastructure that will allow them to better compete on the world stage. While it remains to be seen what an Obama government will do with the outsourcing industry, it’s clear that the Philippines are currently in a “Golden Age” as it relates to BPO growth.
Justin Cooke is an author and partner at TryBPO Outsourcing Solutions, an outsourcing company in Davao City, Philippines. TryBPO offers outsource consulting to small and medium sized businesses around the world.
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9 Responses to “India Vs Philippines – The Philippines Edge On Outsourcing Options For Medium Businesses”
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Outsourcing industry is one of the fastest growing industries in the Philippines. The cost of doing business, availability of human resources and infrastructure makes the Philippines a viable option for outsourcing.
Philippines will always remain as a contender in the BPO industry. What I think is lacking is a mindset that will elevate the Filipinos from being “the agents” to becoming the “managers” Indeed there are so many companies outsourcing their services in our country, but very few are owned by Filipinos, eTelecare is the only one I know. The truth is, many call centers and BPO companies in the Philippines are either owned or partly owned by Indian companies. Now that’s what tips the balance.
@Florante
Very true, expect for TryBPO – we are American owned and operated. I am on the ground here in Davao City, along with my partner Justin Cooke, running our clients’ campaigns. The problem is the higher education system in the Philippines pushes young people to leave the country. Hence higher level executives and business people tend to already work overseas. However, there is a growing generations of self starters here. In 15-20 years many BPO companies will be locally owned and operated because foreigners have come here to teach them the ropes. It was the same thing in India 20 years ago.
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This post was mentioned on Twitter by TryBPO: When comparing India vs. Philippines for offshore outsourcing, consider the skill of the workers, cost and culture: http://bit.ly/jT7ZU...
The Philippine outsourcing industry offers a wide range of services to companies that include not only traditional voice and IT services but also higher value services such as finance, animation, engineering, medical transcription and architectural services. BPO industry in the Philippines has grown 46% annually since 2006. This boom is led by demand for offshore call centers. Overall, Philippine BPO is forecast to earn between US $11 to 13 billion and employing 900,000 additional people in 2010. To achieve and sustain this rapid growth, the Philippine government is offering significant fiscal and non-fiscal incentives to attract foreign direct investment in these industries as part of the 2007 Investment Priorities Plan.
the Philippines can be however remain being a contender when a lot of Indians dive down on a $100 per month all-in-one superman project (web developer-graphic designer-seo-article writer-linkbuilder in one)