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Outsourcing in the Philippines

The Philippine outsourcing industry has steadily gained momentum in recent years. At the moment it seems to have reached a tipping point. Direct employment appears to have passed the 100,000 mark and hiring growth remains at very high levels. Most estimates put business process outsourcing (BPO) growth rates at between 40% and 50% per year, while many contact center organizations are growing at rates approaching 100%. While this is clearly unsustainable in Long term, it’s exciting while it lasts, and that should be the case for the next 1.5 to 2 years. With the dramatic slowdown in growth in India and other more mature offshore outsourcing destinations, the situation in the Philippines is positive to say the least. As the BPO sector is by far the most important economic opportunity for the Philippines right now, it is important for all business leaders to keep up with the progress. the BPO sector does and says about the Philippines.

Since India is still what most people think of when it comes to outsourcing, information is often discussed in relation to this country. Sykes is a large contact center and IT support organization based in the US, India and the Philippines. The company said earlier this year it would move much of its Indian capacity to the Philippines, where it already has more than 7,000 employees. The official company statement from Dan Hernandez, vice president of global strategies at Sykes read, “We have relocated calls to other facilities in Asia for a higher return.”

” But experts in the region said the difference in returns must have been significant for a company of Sykes’ size and importance to give up India after millions were spent to build capacity. Although there was no company announcement, it appears that Sykes’ future growth in Asia will be in the Philippines.GXS (formerly known as GE Information Systems) is a large IT organization with offices around the world.The company has had a presence in India for years,has but made the decision to relocate all functions with a strong customer component to the Philippines for “better results and economics”.

” The company’s analysis also showed that costs in India have increased disproportionately. Victor Lee, who oversees professional and customer service activities in the region for GXS, is also quoted as saying that “the development of products in India as well as customer and professional services in the Philippines reduce risks. Many in the business processing outsourcing (BPO) industry will remember when Dell made a big announcement in 2004 that they were pulling 1,000 jobs out of India and bringing
back to the US due to quality issues. What is less well known is that Dell added more than 1,000 jobs in the Philippines during the same period.