India, the dominant player in outsourcing touted as the “back office of the world,” would soon have to contend with a third-world rival: the Philippines.
A highly skilled English speaking workforce. A reliable telecommunications infrastructure. Low cost of qualified personnel. These are some important reasons to choose India or Philippines for support outsourcing.
IT OUTSOURCING IN INDIA
India, a former colony of the British Empire for nearly two centuries, has the second largest IT talent pool in the world, a result of its British-influenced education system that places heavy emphasis on science and math. With 120,000 skilled IT professionals added to the Indian workforce each year, India is poised to be an IT giant in the third world and is ranked as the top choice of US companies for software outsourcing. According to Nasscomm, a conglomerate of software and services companies based in India, Indian companies are providers of software solutions for more than half of the Fortune 500 companies.
The launch of India’s first private submarine cable has greatly improved the international bandwidth situation. In addition, considerable bandwidth is available with the state-owned Videsh Sanchar Nigam Limited, part-owned by India’s largest business conglomerate. The privatization of the telecommunications industry has also resulted in a significant drop in telecommunications tariffs. Observers predict that the entry of new players in the industry will cause a further drop in telecom prices. In the last ten years, telecommunication costs in India have been reduced by 85 percent.
Over the years, India has built a strong brand equity as an attractive destination for software development and support. India is home to established IT companies like IBM, Intel, Microsoft, Oracle, Cisco, Sun, HP and Alcatel.
OFFSHORE DESTINATION: PHILIPPINES
But the Philippines, one of the second largest English-speaking populations in the world, is fast catching up with India.
With a 94% literacy rate, the Philippines has a large pool of IT professionals and a cost-competitive telecommunications infrastructure. The country ranks third in knowledge and information-based jobs in the 2002 Global Technology Index research conducted by the META Group. Three million college graduates join the workforce each year, providing a tremendous pool of talent.
The Philippines, an American colony for almost 50 years, has a Western-influenced culture, a unique trait that clearly distinguishes the country from other offshore destinations. Although Asian-oriented, Filipinos watch American television and are therefore able to communicate effectively in American English.
PHILIPPINES: CALL CENTER HUB
In recent years, the Philippines has become the foreign destination of choice for call center outsourcing, specializing in customer support services. Due to Filipinos’ high level of English proficiency and strong customer orientation, many leading multinationals have used the Philippines as a global hub for customer service. American OnLine, the largest Internet service provider in the US, employs 600 people at its call center in Clark, Pampanga. Caltex, Procter & Gamble, Barnes and Noble, among others, have built large-scale service centers in the Philippines.
A very promising industry that has sought outsourcing support in the Philippines is the medical transcription business. The Philippines boasts a large talent pool of medical professionals, including doctors, nurses, and medical technologists. The demand for medical transcriptions has increased as federal regulations now require US hospitals to convert medical records into data format. Seventeen medical transcription companies are now in operation and employ 1,200 Filipinos.
GIVING INDIA A RUN FOR HER MONEY
While the Philippines may not be a big foreign software and web services provider like India, it is a big up and coming in the customer service industry. Although India charges less than the Philippines (for data coding work, India charges about $4 (US) vs. $10 in the Philippines), more multinationals choose the Philippines because of the high quality of work. Also, Filipinos are good customer service agents not only because they are fluent in American English, but also because of their friendly and helpful nature.
More and more companies are choosing the Philippines for offshore support. Services offered by Philippines-based outsourcing companies include copyediting and indexing; web design and maintenance; data conversion, data storage, data capture and data entry; Scanning and OCR services; proofreading; coding and typing; image and graphic design services; call center and customer service; summaries and document conversion; typography; and labeling, among others.