The Philippines as the top outsourcing destination
- The Philippines as the Top Outsourcing Destination
The final section of this guide is dedicated to explaining how and why the Philippines is the top outsourcing destination in the world today.
You will find a brief history of how outsourcing began in the Philippines and what differentiates the country from the rest of the world based on workers’ skill set. An analysis of the BPO industry’s revolution in the Philippines will then be discussed before giving you ten reasons why it is better to outsource in this Southeast Asian nation.
What is an outsourcing company? It is a company, which provides external resources that cater to different needs of various businesses.
Why do companies use outsourcing when they can choose to maximize internal resources? When you have a business with projects to finish and deadlines to meet but don’t have the time to do it, then this is the time that you can hire an outsourcing service company. When you don’t have enough resources to go through the process but still need efficient results, then you can find an outsource service provider.
An outsourcing firm contracts work externally. In this setup, specific workloads of your business operations are being done offsite. This ultimately gives you the advantage of having repetitive and systematic work done outside the company’s premises.
When you decide to outsource, it is imperative that you understand what an outsourcing company’s origin is and the different benefits it offers. You can have a better insight on what outsourcing services impact is to your company’s efficiency.
Outsourcing in the Philippines: How did it all begin?
When you talk about outsourcing and its history in the Philippines, Accenture will always come up. Business Process Outsourcing or BPO in the country started from a single contract from the said company.
Frank Holtz founded Accenture Global Center in 1992. It outsourced work in the country and offered management consulting and professional services all over the world. It now has 50,000 employees in the Philippines alone. Among the businesses that outsource, Accenture remains one of the top BPO companies in the Philippines.
Here is a brief overview of the significant events that led to BPO’s success in the Philippines:
1992 – Accenture, founded by Frank Holtz, set up the first contact center. It was located at Robinson’s Cybergate 2 tower in Mandaluyong City.
1995 – The Philippine Congress passed the Special Economic Zone Act providing tax incentives to foreign investors.
1997 – Sykes set up the first multinational BPO Company in the Philippines which focuses on inbound call center support.
1999 – Jim Franke and Derek Holley founded eTelecare.
2000 – 0.075 percent of the country’s GDP was recorded to have been generated by the BPO Industry.
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2005 – The Philippines was reported to comprise up to 3 percent of the Global BPO market.
2010 – The country was becoming the world’s BPO capital with 525,000 call center agents and approximately $8.9 billion in revenue
2016 – The BPO Industry reached an annual growth rate of 17 percent.
All these events have been significant in establishing why outsourcing in the Philippines has been lucrative, and why the country was also referred to as an ideal outsourcing destination for offshoring companies.
Offshoring does not only mean the hiring of an external workforce but also having the operation in another country, hence, the term offshore.
To truly appreciate its existence, you need to understand why outsourcing is good for your business. Here are the three most common reasons why businesses outsource:
- Cutting Costs. Reducing costs is the most appealing reason why companies outsource. Operational costs that are usually cut down include labor costs and overhead expenses.
To put it in a more straightforward perspective, when you outsource work, you don’t have to provide a workspace for your employees anymore. This includes electricity, furniture, and equipment. These are can already be indicated as part of their qualifications, or the outsourcing firms take care of it for you.
- Decentralizing Command. Always checking your employee’s progress is time-consuming. You have to give out instructions and see to it that they are carried out correctly. This is why companies offshore: to delegate supervisory and managerial responsibilities.
- Centralizing Focus. Business owners are now embracing reality. A company that outsources avoids being consumed with repetitive tasks that can be easily handled by an outsource service company.
Then and now: Is the Philippines ready for innovation
Ever since Accenture launched its first contact center in the Philippines, the number of big companies that outsource in the country has been steadily rising. Accenture put the Philippines on the map of modern industrialization through outsourcing.
Accenture was the first company that recognized the country as an excellent source of talents and professionals. Its trust in the companies helped in establishing why companies outsource in the Philippines.
It has taken a risk by offshoring, and now, the Philippines is known to be the “BPO Capital of the world.” Due to its fast growth and development, the BPO Industry in the Philippines is still one of the top outsourcing destinations in the world.
The BPO sector has been generating, as of 2015, $22 billion in revenue. It might even surpass the revenues generated by the Overseas Contract Workers’, which have been the most income-generating Filipino workers for decades.
The Philippines is now maintaining its position among if not the top choice of companies that outsource.
The continuous expansion of training facilities for English proficiency can help the Philippines preserve its high ranking in the English Proficiency Index. Ensuring its current status is essential since It is one of its most respected and sought-after qualifications.
The country guarantees to continuously construct infrastructures conducive and ideal for outsourcing is essential. It’s also imperative to preserve the government’s support for all outsourcing opportunities.
Outsourcing agencies in the country may also create new laws, rules and regulations, government courses, and training that will ensure the quality of BPO candidates. All this can contribute to the country’s knowledge on how does a BPO work.
Being aware of what outsourcing companies do helps in establishing expertise on what the clients’ demands are and how the Philippines can meet them. It will give the outsource service providers an insight into what an outsourcing company is looking for.
By genuinely appreciating the positive influence outsourcing jobs’ positive influence on the Philippines’ economy, effective strategies can be implemented.