Philippines Catching up with India in the Outsourcing Industry

India, the dominant player in outsourcing touted as thePhilippines has a Western-influenced culture, a unique
"back office of the world," would soon have totrait that clearly distinguishes the country from other
contend with a third-world rival--the Philippines.offshore destinations. Although Asian in orientation,
A highly skilled English-speaking labor force. A reliableFilipinos watch American TV and are thus able to
telecommunications infrastructure. Low cost ofcommunicate effectively in American English.
qualified personnel. These are some significant reasonsPHILIPPINES: CALL CENTER HUB
for choosing India or the Philippines for outsourcingIn recent years, the Philippines has become the
support.offshore destination of choice for call center
IT OUTSOURCING IN INDIAoutsourcing, specializing in customer support services.
India, a former colony of the British Empire for almostBecause of the Filipinos' high level of English proficiency
two centuries, has the second-largest IT talent pool inand strong customer orientation, many leading
the world, a result of its Britain-influenced educationmultinationals have used the Philippines as a global
system that places great emphasis on science andcenter for customer service. American OnLine, the
mathematics. With 120,000 trained IT professionalslargest U.S. Internet service provider, maintains a staff
added to the Indian workforce yearly, India is gearing toof 600 at its call center in Clark, Pampanga. Caltex,
be an IT giant in the third world and is ranked as theProcter & Gamble, Barnes and Noble, among
first choice of U.S. companies for softwareothers, have built large-scale service centers in the
outsourcing. According to Nasscomm, a conglomeratePhilippines.
of India-based software and services companies,One very promising industry that has sought
Indian companies are software solution provider tooutsourcing support in the Philippines is the medical
more than half the Fortune 500 companies.transcription business. The Philippines boasts a large
The launch of India's first private undersea cable hastalent pool of medical professionals, including doctors,
tremendously improved the international bandwidthnurses, and medical technologists. The demand for
situation. In addition, considerable bandwidth is availablemedical transcription has risen as U.S. hospitals are
with the state-owned Videsh Sanchar Nigam Limited,now required by federal regulations to convert medical
partially owned by India's largest businessrecords into data format. Seventeen medical
conglomerate. The privatization of telecom industrytranscription companies are now in operation,
has also resulted in a significant drop in telecom rates.employing 1,200 Filipinos.
Observers predict that the entry of newer industryGIVING INDIA A RUN FOR ITS MONEY
players will see a further drop in telecom prices. In theWhile the Philippines may not be as a huge an
last ten years, telecom costs in India have dropped byoffshore provider of web and software services as
85 percent.India, it holds great promise in the customer service
Over the years, India has built a strong brand equity asindustry. Although India does charge lower than the
an attractive destination for software developmentPhilippines--for data encoding work, India charges
and support. India is host to established IT companiesaround $4 (U.S.) versus $10 in the Philippines--more
such as IBM, Intel, Microsoft, Oracle, Cisco, Sun, HP, andmultinationals are choosing the Philippines because of
Alcatel.the high quality of work. Moreover, Filipinos make good
OFFSHORE DESTINATION: PHILIPPINEScustomer service agents not only because they are
But the Philippines--one of the world's second-largestfluent in American English but also because of their
English-speaking populations--is fast catching up tohelpful and friendly nature.
India.More companies are choosing the Philippines for
With a literacy rate of 94%, the Philippines has a largeoffshore support. Among the services offered in
pool of information technology professionals and aPhilippine-based outsourcing companies are copyediting
cost-competitive telecoms infrastructure. The countryand indexing; web design and maintenance; data
ranks third in Knowledge and Information-based jobs inconversion, data warehousing, data capture and data
the 2002 Global Technology Index research done byentry; OCR and scanning services; proofreading;
the META Group. Three million college graduates joinencoding and keyboarding; imaging services and
the workforce each year, providing a tremendousgraphics design; call center and customer service;
source of talent.abstracting and document conversion; typesetting; and
An American colony for close to 50 years, thetagging, among others.