The Philippines is now the world leader in voice-based business services (call centers). There are different sectors in its IT and shared services sector and these sectors represent knowledge based, non-voice services. More than one third of the industry focuses on delivering complex services. The Philippines has a strong affinity to western culture resulting in world class English proficiency. In 2012, the country’s top outsourcing players like Convergys, JPMorgan and Accenture had gross revenues of P28.104 billion, P17.281 billion and P10.80 billion. The Philippines has grown to be one of the top outsourcing locations in the world, only behind India. With a growth rate of 15-18%, the country’s BPO industry is now the biggest contributor to the GDP of the Philippines at 11%.
Why Outsourcing to Philippines is a good idea
Cost – Your business could save 60 to 80% on operational costs by outsourcing to the Philippines. A big part of this is that people living there have a very low cost of living. Filipinos coming out of college earn a fraction of what the same person could earn in the US. For example, they could earn in a day what someone in the US earns in an hour.
Culture – As a country who has had ties with the Spanish, Americans, and Japanese, due to colonization, the Philippines still shows remnants of those times. As such, their culture is very similar to that of the West. Not to mention Filipinos are highly adaptable to foreign cultures. One of the biggest draws for Filipinos is their hospitality, as it’s a big part of their tradition. This in turn makes working relationships with Filipinos great, since they are easy to work with.
English Language – Over 70% of Filipinos speak English fluently. They learn the language as children even before going to school. Their proficiency in English only gets better with a formal education. Actually, English is the language used in schools and all local commerce is done in English as well. One of the biggest problems with outsourcing is communication, so having Filipinos that speak, write and understand English very well puts your company at an advantage. Philippines ranks #13 worldwide in English Proficiency.
Advantages of the Philippines
There are many advantages to outsourcing to the Philippines. The country has a highly skilled work force with a literacy rate of 94%. The Philippines has a well developed communications infrastructure that links the three major islands. The communications infrastructure continues to improve giving it both high quality and low cost bandwidth. The Government has encouraged the development of IT park through investment incentives.
Disadvantages of the Philippines
Every year, the Philippines gets more than 20 typhoons and a few of those can be devastating. Droughts tend to cause chaos by not getting sufficient energy from the grid and causing brownouts. Sometimes power is cut for 6 to 7 hours per day causing a huge backlog and drag in productivity. Outsourcing to the Philippines is not without some risk.
