There are important aspects as to why investors, particularly coming from the Western region, UK and Australia entrust the development of their businesses to several of Asia’s top outsourcing destination hubs. On the other hand, it leads back to these questions: Why do business owners and investors outsource to these places? What advantages do they obtain? The entire process of outsourcing primarily focuses on the delegation of a company’s business process to external agencies or a third party. Outsourcing provides a range of benefits such as superior quality to product and service innovation and low cost labor, to name a few.
Business process outsourcing takes the form of ‘offshoring’ when outsourcing trails off national borders and is administered by companies situated in other countries, particularly in South and Southeast Asia where top BPO hubs are located. Outsourcing however had its own fair share of doubters, as many experts debate on its positive and negative points. In the long run, both outsourcing and offshoring, (O&O) have an express impact on companies taking the risk to take their business functions elsewhere. And both have become vital elements of defining how thriving enterprises are managed.
Before the top outsourcing hubs in Asia are revealed, here are key reasons why outsourcing in this part of the world is very ideal for large-scale corporations, small and midsize businesses as confirmed by organizations that attest to success and effectiveness of the business process outsourcing industry in Asia.
• Asia, particularly in the Southern region, has very low operational and labor costs first and foremost. It is among the main reasons why companies decide to outsource in this continent. It has an essential impression on the company’s profits recognition and can provide major savings when business process is carried out properly. Business process outsourcing is assumed many times to save costs and offer a buffer capital fund to companies that could be influenced in a way that best benefits the company financially.
• One of the main benefits that can be accomplished when companies outsource or offshore is it releases internal resources that could be put in to valuable purpose for other intentions. Additionally, a lot of outstanding ventures outsource to Asian countries just to get access to resources that are not available within the company’s premises as most of them are repeatedly stuck with internal resource crisis. Outsourcing, offshoring in a different country like the Philippines in particular, helps companies alleviate risks and is also one of the many reasons embarked into the future. By acquiring the service delivery or point of production closer to their end users, a number of companies also outsource to help them progress and gain new ground in new market areas. Moreover, outsourcing also allows companies to grasp the benefits of re-engineering.
• Also, foreign companies prefer to offshore or outsource in Asian territories in order to keep on converging on their principal business processes while passing on dreary-time-consuming processes to third parties or external agencies. In addition to this, it enables companies to tap into and influence a global knowledge base, having access to top-notch facilities. Business owners can exempt themselves off functions that are not easy to manage and supervise by delegating tasks to external agencies while still accomplishing their advantages. Companies embark on outsourcing and offshoring for a range of reasons depending upon their vision and purpose of the exercise. The fruits of labor are evident with a few of the leading business ventures internationally in which outsourcing and offshoring have developed into a key component of routine business strategies. However, this may differ from company to company. Now, talk about the best and ultimate business outsourcing destination hubs in Asia and in the world, there are only a couple of destinations that has the entitlement to be cited into the discussion.
Over the last decade, India and the Philippines have been leading business process outsourcing industry in the region, dominating the continent in terms of BPO call centers. The latest rankings released by Tholons for 2014 revealed that India and Philippines respectively led all countries in this year’s Top 100 Outsourcing Destinations. Bangalore, India remained at the number one spot, defending its crown as the top outsourcing destination in Asia for several years. Meanwhile, Metro Manila, Philippines has improved and moved up to the 2nd spot, booting out Mumbai, India to 3rd place this year. The top eight apparently belongs to India with six (Bangalore, Mumbai, Delhi, Chennai, Hyderabad, and Pune) while Philippines has two (Metro Manila and Cebu City). Here is an overview of Asia’s greatest BPO destinations starting with the 1st placer, India. India: Bangalore, Mumbai, Delhi, Chennai, Hyderabad, and Pune There wasn’t much difference from last year’s Tholons rankings except for Manila (Philippines) snatching the 2nd spot away from Mumbai. Basically, India dominated the top 8 and it goes to show how consistent and how India turned into a pioneering BPO destination hub around the world. We have known India as a country with deeply rich culture and extraordinary customs and traditions.
Apart from these, this humble country from South Asia boast off one giant outsourcing industry that continues to perform significantly well for hundreds and thousands of businesses across the globe and carries on to attract more clients. What makes India the most-sought after outsourcing hub in Asia and overall the world? Let us learn the secrets (if they have one) and facts about India that makes them the ‘darling of the crowd’ when it comes to business process outsourcing. First and foremost, of course, foreign investors and businesses has the desire to gain access to the country’s lower-cost, high-quality labor, and also global technological transformation that make it likely to offshore white-collar employment that had to stay within the premises of home some time ago. So this is basically what fueled the charge of companies, particularly from U.S., to outsource instead of making use of their onshore workforce. According to The Times of India in an article last August 2013, US companies continue to outsource jobs to India despite protectionist protest against the same. IBM, for instance, is laying off 747 workers at three sites in New York. At Poughkeepsie , a city in the state of New York, 50 jobs have moved to Brazil, India and China, the US Department of Labour filings showed. Another filing by three petitioners at the company’s Austin office said service support and administration of accounts were relocated to foreign countries as cost-reduction strategy. “Change is constant in the technology industry and transformation is an essential feature of our business model.
Consequently, some level of workforce remix is a constant requirement for our business. Given the competitive nature of our industry, we do not publicly discuss the details of staffing plans,” said an IBM spokesperson, when contacted. The key factors brought about in the success of India in business process outsourcing: India provides low-priced yet high-quality software-development services distantly demand well-developed processes for managing major projects in distributed areas. In addition to this, it’s very difficult for the international people to generate employees equal to what India has built over the years. Clearly for most foreign businesses, just having a pool of skilled employees onshore, trained to deliver services is quietly inadequate. India has the workforce that are knowledgeable when it comes to developing tools and applications They are also know for having excellent managing proficiency and know-how on processes for providing services to clients far-off the other side of the world. Moreover, India has been able to develop software in partnership with customers sprawling across the world. They take full advantage of the 24-hour workday which goes to show their eagerness and pro-activeness approach. The Indian workforce and experts has vastly developed through the years. They have seized different challenges that further honed their skills and versatility.
Today, they are capable of managing comprehensive database design, function-design tasks, long-term maintenance services, programming, full technical design, testing, and creating documentation. India has been doing IT consulting and so far has done an excellent job in this field and now, they are focused to develop their skills in business consulting. India has an estimated more or less 300 business consultants to date. The South Asian country has also established and introduced a systems integration procedure and a business-process-outsourcing arm as well as. India aims to provide a great range of services to their present clients and future prospects. India’s biggest challenge today however, is the need to help out in restructuring the design of the technology solutions and then execute those solutions. To this point, India enjoys the glory of being the top BPO destination hub in the world, and they might hold on to this title for the next years to come. But trailing India in second place among all the top outsourcing hubs across the globe is the Philippines.
It was a major development and a big leap for this Southeast Asian country with 7,107 islands to jump over Mumbai and claim the 2nd spot. And that leads to this very interesting question, “will it ever surpass India as the number one and the strongest outsourcing destination in the whole world soon?” Nothing is impossible, and it can happen anytime soon. On the other hand, here’s an overview of the Philippines’ BPO industry and why it definitely belongs to the world’s elite and pioneering outsourcing hubs.
The latest results of Tholons’ rankings of the top outsourcing destinations revealed that the Philippines had a strong run in 2013 and continues to do so at present as it bested India’s Mumbai region for the year 2014, moving up one place on the rankings and now chasing Bangalore for the ultimate first spot. On the Visayan region of the Philippines lays the humble city that took the 8th spot on the rankings. Cebu City or Metro Cebu is a budding destination for business process outsourcing that has proven to be one of the world’s competitive outsourcing hubs around the world. Again, the question is, “Why do foreign investors love the Philippines? What makes the country a top outsourcing destination hub in Asia and in the whole world? The Business Processing Association of the Philippines or BPAP confirmed the success of the Philippine BPO industry disclosing the total earnings of $11 billion in 2011. The country’s BPO industry has won several recognition awards from foreign governing associations that would simply define how accomplished the country is when it comes to outsourcing. In addition to this, the Philippines continue to be a global leader in voice services which was confirmed by Tholson Investment Advisory Firm. There are call center companies that position their services to different markets. Magellan Solutions, for example, offers customer support, order taking and answering services to small and midsize business, but also help even large-scale corporations.
• Low-cost operation expenses – 30-40% lower salary compared to Europe and the US, with a daily minimum wage of about 8 dollars a day – 5–30% call center service savings – 35–50% software development savings – 50% lower electricity, telecommunication and utilities cost
• Stable and Progressing Economy – The country is gradually rising from the setbacks that weakened the Philippine economy over the decades due to several political crisis. But today, the country is back on its feet and continues to strengthen the developing economy as it aims to take its previous status as one of the best nations in Asia.
• Perfect Geographical setting – Geographic-wise, the Philippines lies on the most perfect location in the continent since it is located right in the heart of Asia.
• Western Influence – The Spanish and American colonization have brought significant influences to the Filipinos which is still evident nowadays. The Filipino lifestyle is quite parallel to those on the Western regions. Which means Filipinos can adapt easily to just about any environment and culture because of the flexibility attribute of the Filipino people.
• Government Support – The government has dedicated programs for the development of the Philippine BPO industry. It has become one of the government’s priorities knowing that it contributes significantly to the country’s growing economy.
• Proficient Filipino workforce – Third largest English-speaking country in the world – 92% literacy rate – 400,000 college graduates produced per year – Hardworking and Creative – Adaptability to various work processes, lifestyles and cultures Metro Manila and Cebu City are expected to perform and improve further in the next few years as Philippine BPO industry continues to blossom and expand although out the archipelago. The race to the top of the BPO pinnacle is just getting started between India and the Philippines. But it is inevitable that only these two countries will go battle head to head for supremacy in the BPO world in the next years to come.