Philippines Outsourcing Industry

Philippines Catching up with India in the Outsourcing Industry
By Winston Pepito

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 labor force. A reliable telecommunications infrastructure. Low cost of qualified personnel. These are some significant reasons for choosing India or the Philippines for outsourcing support.

IT OUTSOURCING IN INDIA

India, a former colony of the British Empire for almost two centuries, has the second-largest IT talent pool in the world, a result of its Britain-influenced education system that places great emphasis on science and mathematics. With 120,000 trained IT professionals added to the Indian workforce yearly, India is gearing to be an IT giant in the third world and is ranked as the first choice of U.S. companies for software outsourcing. According to Nasscomm, a conglomerate of India-based software and services companies, Indian companies are software solution provider to more than half the Fortune 500 companies.

The launch of India’s first private undersea cable has tremendously improved the international bandwidth situation. In addition, considerable bandwidth is available with the state-owned Videsh Sanchar Nigam Limited, partially owned by India’s largest business conglomerate. The privatization of telecom industry has also resulted in a significant drop in telecom rates. Observers predict that the entry of newer industry players will see a further drop in telecom prices. In the last ten years, telecom costs in India have dropped by 85 percent.

Over the years, India has built a strong brand equity as an attractive destination for software development and support. India is host to established IT companies such as IBM, Intel, Microsoft, Oracle, Cisco, Sun, HP, and Alcatel.