The Outsourcing industry has been a healthy competition for the past years. Since the birth of Outsourcing, India is the breeding ground for the worlds most effective service and quality result yielding companies. However, more countries are participating and most of them are proving that they are forces to reckon with. And running ahead of the race is the Philippines.
In a recent study by CBRichard Ellis the Philippines ranked second cheapest with lease rates at US$ 19.1 psf/annum. Coincidentally, recent developments in the southern regions of India unmistakably point to the country's reputation as the globally favored hub for information technology (IT) and information technology-enabled services (ITeS) is decreasing. Several ITeS and BPO companies, particularly the medium businesses based in Hyderabad and Bangalore are gradually relocating or expanding their businesses in the Philippines.
In the recent years, the Philippine government has also been supportive of the BPO industry. More infrastructure was built, telecommunication was improved and facilities were made to support the growing demand of outsourcing.
There were surveys conducted and have resulted to the Philippines having the most resolution effectiveness. Filipinos are better in solving problems, both technical and non-technical. They are also efficient in pacifying irate customers.
The Philippines excel in the language field. Being the third largest English speaking population in the world, Filipinos could communicate and relate better to their clients. They speak English better resulting to their efficiency in pacifying irate customers.
The Philippines is also more affiliated to the West. Having a close tie with the United States since the World War II, it was exposed to the Western culture, including the businesses.
The Philippine government also offers more tax incentives to BPO companies, adding up to the financial advantages of outsourcing. The Philippines' 8-year tax holiday help boost the net profit margin of BPO companies, estimated between 11%-21%, compared with 13%-16% in India.
IBM pointed that lower inflation rate is one of the positive things that attracts investors to the Philippines. Comparing companies expenses, in India the average call center salary for an employee is $6K. However the average salary for a call center employee in the Philippines is $3K. The minimum wage in the Philippines is quite lower. Another factor is that the salary in the Philippines is set by the day rather than the hour. Therefore, if the minimum wage rate is increased it is increased by the amount paid each day.
It is definitely cost effective for the companies to move to the Philippines. The recent addition is EXL Services Holdings Inc. which recently publicized their expansion.
With this odds India is holding on to the industry that they had developed and has led for a few years. India's education is more focused on science and math. They are experts in software development. However they needed to focus more on the results that their weaknesses has brought and work on them. They need to deliver the customer service and not just the software.
Clearly the Philippines has already eclipsed India as the Outsourcing capital of the world. The ripple started with voiced accounts and the Philippines is poised for a wave of improvement in the field of more sophisticated outsourcing.
Aside from internet and writing, the author's other love is coffee.