Philippine Outsourcing and New Business Opportunities

Philippine outsourcing has many features that make it an attractive choice for those looking to either cut costs or expand their businesses through outsourcing. An understanding of the different types of outsourcing, the advantages the Philippines offers and the kinds of outsourcing that are most suited for that country will help greatly in the outsourcing process.

Advantages of Philippine outsourcing
Outsourcing to the Philippines offers many of the advantages that can be found when outsourcing anywhere. There is the potential to access plentiful and sometimes very skilled labor at lower rates. There can also be tax advantages when the nation the work is being outsourced to has a more favorable tax environment. Depending on the business, there are other advantages to include the greater flexibility that comes with not taking on employees directly and the ability to concentrate on one’s core business.

The history of the Philippines gives it certain unique advantages in outsourcing. After being a colony of both Spain and the US, many Westerners can find more cultural affinity with people in the Philippines than they can with those in other Asian nations. More importantly, the English ability of Filipinos is on average tends to be among the highest in Asia. In addition, being in a different time zone than North America, it is ideal for companies that operate around the clock.

Disadvantages of Philippine outsourcing
Some of the problems that have kept the Philippines less developed economically can also pose challenges for those outsourcing there. Corruption has long been epidemic and security needs to be improved. In addition, cultural differences and attitudes toward work offer challenges, and workers being located so far away have disadvantages even in a time of instant communications. Anyone outsourcing to the Philippines needs to start out slowly and proceed with caution.

The types outsourcing to consider
Regardless of where it is performed, outsourcing is generally classified into several different categories: Business Process Outsourcing and Knowledge Process Outsourcing and Technology Outsourcing. Depending on the needs of the outsourcer, all of them can be carried out in the Philippines.

Business Process Outsourcing (BPO): In this type of outsourcing, also referred to as back office outsourcing, a business process is outsourced to another company. Common examples of this are when businesses outsource their entire accounting, human resources, manufacturing or financial functions. By doing so, businesses can shed processes that have little to do with their core business and hopefully take advantage of services that specialize in these functions and perform them better.

Knowledge Process Outsourcing (KPO): This is often though thought of as a higher form of BPO and centers on highly skilled services. Types of services include market research, analytics and management, web survey analysis and other technical skills. This type of outsourcing is not only useful for companies looking to cut costs but also makes it possible for those who need certain technical skills on an irregular basis to easily access them.

Information Technology Outsourcing: With the world changing so fast, every company needs technology and technology services, but many do not know about it efficiently. Information technology outsourcing allows companies to use skilled technology workers wherever they may be to perform various functions to include website development, creating applications and network infrastructure.

Some common forms of Philippine outsourcing
Call centers: This is the single biggest segment of the Philippine outsourcing industry. With a deep pool of low-cost and proficient English speakers, it is ideal for companies looking for ways to outsource customer support and other services offered by call centers.

Legal and medical transcription: The large number of English speakers in the Philippines makes this another field in which the Philippines is a good place to outsource. Operative reports, medical summaries, chart notes and the like are all commonly done by Philippine outsourcers.

Finance and accounting services: With a relatively educated workforce, this is another field in which Philippine outsourcing is strong. Account maintenance, payroll processing, auditing, asset management and other related services are often offered by Philippine companies.

Web design and software: While the Philippines are behind India in this type of outsourcing, it does offer skilled coders at lower costs than in more developed countries. In situations such as website design where being able to communicate ideas well is especially important, the Philippines can be a good choice.

New Outsourcing Opportunities with Elancer

The internet and other technologies have greatly expanded the opportunities for those who want to outsource jobs and for people interested in doing such work. For the first time in human history, not only a business, but an individual can easily hire an elancer on the other side of the world. This not only gives people more work opportunities, but it also makes it possible for people to accomplish things they might not otherwise be able to do.

Defining the process and its advantages
Elancing and elancers came about with the birth of the internet. Virtually any task that can be done on a computer can be outsourced online. Physical location does not have to count. For better and for worse, this turns much of the world into one big labor market. On the plus side, it gives skilled workers the opportunity use their talents, and it gives both small and large enterprises the chance to do things in more cost effective ways.

By eliminating overhead and bringing employers and employees directly together in the most efficient manner possible, hiring an elancer if often far cheaper than any other method. It also gives the small business and entrepreneur a more level playing field. For example, someone with a good idea for a website that does not have the coding skills to put it into practice now can easily hire great talent from around the world. Since payment is based directly on performance, there is far less wasted time and resources.

How it works
Elancer websites bring outsourcers and those who are looking for work together. While each site works differently, they all follow the same basic principles. Outsourcers will post a job on the marketplace for its members to bid on. After a period of time, one or more bidders will be selected to perform the job.

Some common types of commonly outsourced work include graphic designing, programming, writing, video, finance and just about anything else that can be done on a computer.

The advantages of elance sites
Forums, classified ads and other types of websites also offer ways to find elancers. However, the elance sites offer some advantages. With their large, worldwide membership bases, they offer the best selection of jobs and bidders. In addition, employers can easily look over the profiles, work records and feedback of those bidding. For payment, a good elance site will offer escrow and other payment methods that can protect both the buyer and bidder. Finally, various other services such as work rooms make it easier to monitor projects and workers. For example, they offer ways to communicate and organize messages and even remotely see what is on the worker’s computer screen.

The costs
Elancer websites charge for their services in various ways. Generally, the smaller the job the lower the fees will be. Some sites have membership fees or charge to post jobs. They may take a percentage of the payment from the employer or the employee. While the fees are not usually high, outsourcers and elancers will often work out a system of direct payment if they are working on a continuous basis.

Depending on the nature of the job, compensation may be by the hour or by the project.

For employers
For those not accustomed to elance sites, it is a good idea to start out slowly with smaller jobs. Examine the major sites and find the one that best needs the needs of the project. Be very careful to list all the requirements of the job. Most jobs will have a good number of bids so it is often possible to be choosy with the bidders. Some bidders will come in high because they are inexperienced and do not know the market rates. However, more experienced bidders frequently charge premiums for their work that may be worth the price. In other words, do not always go with the lowest bidder.

For elancers
Read over the proposals carefully and make a customized bid. Keeping a good profile and portfolio will make a huge difference. Take any tests that the site might offer and thus show off all qualifications. Freelance work takes good self discipline, time management and a desire to continuously upgrade skills. Be prepared to start out very slowly and handle rejection. Join forums, social networking sites and any relevant groups in the elancer site.

The top elancer sites include:
Freelancer
Elance
ScriptLance
Guru
oDesk

While Freelancer is the most popular, every service has its own way of doing things that will be more or less attractive to different people depending on their needs. Look at fees, popularity and the types of work the site specializes in when making a decision on which site to use.

The Pros and Cons of Offshoring vs. Outsourcing

Although offshoring and outsourcing often have less than positive images in the minds of many, both practices are growing at increasing rates in the modern world. This makes understanding the differences between them as well as their pros and cons more important than ever.

Offshoring vs. Outsourcing: The Difference
While they share some similarities, they are very different processes and should not be confused.

Offshoring: This is the process in which a company moves part of its work to another country. It may be building factories or establishing some other presence overseas, but the company will still be doing the work in-house. However, the work will instead be done partially or entirely by people in the country the work has been offshored to.

Outsourcing: When a firm or even an individual outsources work, they are simply hiring an external organization or contractor to do the work rather than doing it in-house. The entity that is contracted to do the work may or may not be in another country. It could be a firm next door or on another continent.

Driving forces behind offshoring and outsourcing
Although they have an image of being a new force in the world, both offshoring and outsourcing have been around for a long time. Firms have long established presences across national boundaries and made deals with others to do jobs for them without taking those contractors on as employees. The lower costs and other advantages this offers have always been present. However, with the instant and cheap communications, fast travel and ever more integration of the modern world, the increased ease in which offshore and outsourcing can be done has contributed to their popularity.

The pros and cons of offshoring vs. outsourcing
Any firm or individual considering offshoring or outsourcing needs to think about the pros and cons of each before deciding which, if either, is the best course of action.

Offshoring: When companies offshore, they can take advantage of labor or natural resources that may not exist in their home countries. While sometimes more skilled labor is the goal, more frequently it is the access to cheaper labor to lower unit costs and help them compete. The regulatory environment in another country might also be more favorable. Furthermore, becoming established in another country through offshoring often brings the kinds of contacts and experience that allow a company to begin marketing there too.

Since the work is still technically being done in-house, the offshoring company is keeping more control over the production process. When the company is in another time zone, this allows production to continue around the clock.

On the other hand, operating in different time zones can also bring administrative headaches, and other factors to include supply chains becoming more fragile as well as complicated. These kinds of problems are often exacerbated by language and cultural differences. Furthermore, there is the potential of political or other problems suddenly causing unexpected difficulties or the negative publicity that sometimes comes with offshoring.

There is also the question of intellectual property. With offshoring, the need to share processes and other knowledge arises. Generally, companies that do not have strong patents need to tread very carefully if they outsource at all. Even those companies that do not have secrets stolen may find themselves training their future competitors.

Finally, there can be extra legal headaches if disputes arise. For this reason, how and where legal deputes will be handled needs to be specified in the contract and be a fundamental part of any outsourcing strategy.

Outsourcing: The major advantage of outsourcing is the flexibility it offers. Companies and even individuals often need things done but not have the time or expertise to do it themselves. With outsourcing, anyone with the money to hire someone to do such a job can get it completed. Since companies are not taking on new employees, it can be a short term or one-time projects. This gives companies great flexibility and the ability to experiment.

Furthermore, outsourcing brings access to specialized skills wherever they may be and offers companies ways to concentrate on core activities. For example, a manufacturer of computer parts will probably not do a particularly good job performing payroll functions. They may be better off leaving that to companies that specialize in such tasks and concentrate on making the best parts.

On the downside, when outsourcing, there is a greater loss of control, and third parties need to be relied upon. These parties are not going to have the same kinds of loyalties as employees often have, and the danger of missing deadlines or exposing company secrets increases.

If the outsourcing is performed in another country, there is also the possibility of facing the same kinds of coordination, supply chain and language problems encountered in offshoring (as well as its benefits). In addition, while there are costs of having employees, there are benefits benefits are benefits Having skilled employees in an organization often brings returns that are difficult to quantify.

The future of offshoring vs. outsourcing
With the different needs of varied companies, both offshoring and outsourcing will likely be around for the foreseeable future. A combination of factors to include increasing competition, technological change and trade deals are all pushing to make these practices more prevalent than ever.