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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.
Offshore
Destination: Philippines
But the Philippines—one of the world’s second-largest
English-speaking populations—is fast catching up to India.
With a literacy
rate of 94%, the Philippines has a large pool of information technology
professionals and a cost-competitive telecoms infrastructure.
The country ranks third in Knowledge and Information-based jobs
in the 2002 Global Technology Index research done by the META
Group. Three million college graduates join the workforce each
year, providing a tremendous source of talent.
An American
colony for close to 50 years, the Philippines has a Western-influenced
culture, a unique trait that clearly distinguishes the country
from other offshore destinations. Although Asian in orientation,
Filipinos watch American TV and are thus able to communicate effectively
in American English.
Philippines: Call Center Hub
In recent years, the Philippines has become the offshore destination
of choice for call center outsourcing, specializing in customer
support services. Because of the Filipinos’ high level of
English proficiency and strong customer orientation, many leading
multinationals have used the Philippines as a global center for
customer service. American OnLine, the largest U.S. Internet service
provider, maintains a staff of 600 at its call center in Clark,
Pampanga. Caltex, Procter & Gamble, Barnes and Noble, among
others, have built large-scale service centers in the Philippines.
One 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 transcription
has risen as U.S. hospitals are now required by federal regulations
to convert medical records into data format. Seventeen medical
transcription companies are now in operation, employing 1,200
Filipinos.
Giving
India a Run for Its Money
While the Philippines may not be as a huge an offshore provider
of web and software services as India, it holds great promise
in the customer service industry. Although India does charge lower
than the Philippines—for data encoding work, India charges
around $4 (U.S.) versus $6 in the Philippines—more multinationals
are choosing the Philippines because of the high quality of work.
Moreover, Filipinos make good customer service agents not only
because they are fluent in American English but also because of
their helpful and friendly nature.
More companies
are choosing the Philippines for offshore support. Among the services
offered in Philippine-based outsourcing companies are copyediting
and indexing; web design and maintenance; data conversion, data
warehousing, data capture and data entry; OCR and scanning services;
proofreading; encoding and keyboarding; imaging services and graphics
design; call center and customer service; abstracting and document
conversion; typesetting; and tagging, among others.
©
Phil-Am Outsourcing Solutions, Inc.
Cebu, Philippines
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