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.