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3
Jul

Outsourcing: The Growing Industry in the Philippines

A blast from the past

It was in 1992, when the idea of outsourcing was first introduced in the Philippines by Frank Holz, the Partner responsible for developing and marketing the first Global Resource Center in Manila. Through Accenture, Business Process Outsourcing was born in the Philippines, and then followed by SPI Global and so many others (A Brief History of BPO in the Philippines).

Outsourcing in the Philippines Today

Since the inception of outsourcing industry in the Philippines, we cannot deny the fact that this business has a lot of potential and it is evidently growing. In 2008, the country was listed as the third largest BPO destination (15%) in the world after India (37%) and Canada (27%).

However, the outsourcing game trade is gradually changing. Other countries are also emerging as the new outsourcing destinations since the cost-effectiveness of India is starting to fall due to wage inflation and rising staff attrition (New Outsourcing Destinations Emerge as Companies Cut Costs).

On the other hand, from the number three spot, the Philippines overtook India in terms of ‘voice-related services’ last year. About 400,000 people were employed at call centers in the country, while India had only 350,000 employees (Today in Tech: Philippines, new back office to the world; Infosys & acquisitions; and INR). Lower wages and cheaper rent are the main reasons why the outsourcing industry in the Philippines is prospering and continuously growing.

Moreover, outsourcing in the Philippines has “grown from almost nothing in 2001 to $11.25 billion in revenue last year” (Outsourcing in India Faces Offshore Woe). In addition, by 2016, there is a prediction that the industry will generate $25 billion revenue and could add another 700,000 outsourcing-related jobs (At the front of the back office: How the Philippines beat India in call centres).

In 2010, the Philippines won the “Outsourcing Destination of the Year Award” at the UK National Outsourcing Awards. It’s the country’s 3rd time to win the same accolade in the past four years (http://www.bpoc.uk.com/). Furthermore, the Philippine government is continuously exerting its efforts to pitch the traders in the United Kingdom about the opportunities of Information Technology-Business Process Outsourcing in the country (PHL pitches IT-BPO industry in London).

Conclusion

From the humble beginning of outsourcing industry in the Philippines, the country has become the new favourite outsourcing destination of international companies from the United States and UK. Moreover, the phenomenal growth of BPO in the land has opened more business opportunities. Outsourcing services in the Philippines is no longer limited to call centers and back-office support. Information Technology Outsourcing (ITO) is also emerging. Companies offering IT-related services such as software development, web design and development, search engine optimization (SEO), mobile web development, multilingual website and web maintenance, are also attracting local and international clienteles.

In our next article entitled: “Outsourcing: It’s more fun in the Philippines,” we will give you reasons why more companies are choosing the Philippines to outsource their business’ needs.

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  • michael bian

    Business is largely about competition.

  • http://www.weboutsourcing-gateway.com/ Web Outsourcing Gateway

    Indeed, that is why it is very important to learn different strategies and be competitive in both local and global arena.

  • Michael Bian

    Outsourcing plays a very important in business.