Outsourcing: From India to the Philippines

India is still what most people think of when the topic of outsourcing is discussed. However, a number of multinational companies have taken a big leap to move from India to the Philippines to look for better and greater returns on investments.

Business leaders have been saying that outsourcing in India has arrived at a near-term peak and momentous expansion from this point forward will result in higher spends and lower quality delivery. Today, efforts are being carried to move capacity from India to the Philippines.

Looking at current events in the Philippines, we can get a better idea what is going on.

Sykes, a large U.S.-based contact center and IT support organization with operations in both India and Philippines, shifted much of its Indian capacity to the Philippines, where it already has more than 7,000 employees.

GXS (formerly known as GE Information Systems), a large IT organization with locations throughout the world that has had a presence in India for years, decided to direct all functions with a strong customer component to Philippines because of "better economics and results." Company analysis also indicated that costs were increasing disproportionately in India.

Dell shifted 1000 jobs from India back to the US because of quality problems. What is less well known is that during that same period, Dell increased the number of jobs in Philippines by over 1000.

These are but only a few of the global companies that had before set grounds in India but now enjoying the high “ROI” from the Philippines which will result to a long term settlement if the BPO industry will continue to receive support from the Philippine government.

Philippine Outsourcing Edge on Finance and Accounting

The Philippines is becoming the fast favorite of global companies in terms of outsourcing. With over $2.1 billion in outsourcing revenues last year, the Philippines has soared into third place behind India and China. A latest study by neoIT ranks the Philippines as the number two best haven for BPO services and was positioned better than India in terms of ‘Financial Benefit’.

Fueling the recent growth explosion in the outsourcing industry in the Philippines are higher end outsourcing services such as Finance and Accounting, Financial Intelligence Research, Web Design, Software Development and Animation. This is again supported by being ranked #1 in the availability of knowledge-based jobs and workers worldwide in a survey conducted by the US based Meta Group. This is singularly factual in Finance and Accounting outsourcing. The Philippines has the biggest number of accountants in Asia. The country has graduates over 105,000 finance and accounting majors, and produces over 3,000 CPAs every year. Filipino accountants are also distinguished for their flexibility in working with multiple accounting standards. Another distinctive edge of the Philippines comes from a high level of proficiency in English.

These up to date developments and market outlook provide a realistic ground to single out the Philippines as the target destination for FAO investments.

Philippine Outsourcing

Another opportunity for Philippine Outsourcing Industry has just came up when the Switzerland based food company, Nestle S.A. , reveals that it has picked the Philippines as its outsourcing site for its shared service center for financial and employee services.

The company decided to establish Nestle Business Services AOA in the country because of talent availability and cost efficiency.

The financial services that will be outsourced consist of accounts payables and receivables, and accounting operations while employee services include payroll, human resource administration, time management and benefits administration.

The shared service center is another denoting affirmation of the Nestlé group’s continuing confidence and commitment to support the long-term economic growth of the Philippines.