Growth in Revenue for Offshore Outsourcing Companies

As the number of companies that seek a cheaper alternative in terms of labour and equipment expenses increases, offshore outsourcing becomes more in demand. Outsourcing is the method of hiring an external company, preferably from another country, that could provide the needed services for an affordable price. Most of the jobs that are outsourced are either the repetitive ones or tasks that involve advanced skills. The repetitive ones are outsourced because most in-house employees cannot handle the demands of the work as well as its stagnancy. On the other hand, the reason why jobs that need advance skills are outsourced is because of the expensive labour rates.

Because of this kind of setup where the number of tasks outsourced is high, the Business Process Outsourcing industry became one of the largest industries in the world. The largest offshore outsourcing destinations are India and the Philippines. Both countries became ideal outsourcing destinations because of the large number of manpower who can provide quality services for a very low price. Because of the countries’ low cost of living compared to the western ones, companies abroad have  a higher chance of hiring more manpower in order to expand faster.

India is the number one offshore outsourcing destination. The country has the largest call centre industry as its exports from the IT and BPO services have increased by 18.7 per cent to $59 billion in the year 2011. India is ideal because of their excellent educational competency on courses related to computer technology. Aside from this the country’s large educated population gives a great venue for a large number of manpower. Most of India’s clients are airline, technology and financial services corporations.

Next in line in the largest outsourcing companies is the Philippines. Business Process Outsourcing is also the fastest growing industry in the country. The Philippines boasts a steady growth in annual revenue and covering about 15% of global outsourcing markets. The country employs 708,000 full-time employees, with 350,000 working in the country’s call centre industry. Major outsourcing services include the call centre industry, back-office KPOs, IT software development and maintenance, Engineering, Transcription, and Animation.

According to business analysts, the business process outsourcing is an industry that is here to stay. It currently helps the economy on both ends as it provides tons of jobs for offshore outsourcing destinations and helps companies all around the world profit as well.

Ten-Year Review on Offshore Outsourcing Landscape

Offshore outsourcing has come a really long way right back from where it started. Like any other success story, everything has its own humble beginning. As of now, the world has two of the largest business process outsourcing sectors- India and the Philippines. These two countries have been considered as the most ideal places to outsource a business because of its cost and labour effectiveness.

The Philippines have started Business Process Outsourcing way back in 1992. However, the industry has reached its massive success within the last ten years. Started mainly as a call centre industry, the main jobs were all about customer services, transcriptions and data entry. The first BPO company had only 5,000 seats for employees and was located in the National Capital Region of the Philippines. Most of the clients were offshore and from western countries because of the high labour costs. Outsourcing to the Philippines meant huge savings and more opportunities for business expansion as a company may hire more employees with the price they’re paying for only one back home.

The Philippines’ offshore outsourcing performance made a huge impact when it has increased its annual performance of 46% in 2006. This boom is because of the constant demand of offshore call centres. Aside from that, majority of the services offered involve IT professionals performing system design and software application development, as well as application management and maintenance.
As of now, the country’s business process outsourcing performance stays on the positive scale and is continuously increasing. The country already has 20 ideal sites that offer thousands of jobs for its citizens. At the same time, this setup also benefits the client as it projects an easier and faster way to expand a business’ operations.

Offshore outsourcing has done an immensely excellent performance in the past ten years and it still is going on strong. Business analysts in the country believe that this industry is here to stay for a very long time. With the continuous advancement of technology together with the Filipinos’ exceptional work ethics, the country keeps on luring potential clients. Overall, Philippine BPO is forecast to earn between US $11 to 13 billion and to employ 900,000 additional people in 2011.

Why Do More Companies Take a Chance on Outsourcing?

How is it that more and more companies decide to outsource offshore? Is it a good idea? Well generally, it is. You will be able to utilize your company’s resources at a lower cost when you go for outsourcing. Hiring employees from countries with low wage rates can help you spend less on labor, plus you get the liberty to increase your manpower because their salary will only cost less, lesser compared to that of your own people’s minimum wage.

When you plan to outsource offshore, you better think of ways on how to make the most out of it. There are many companies who build their own branches in third world countries so they can also save more on other expenses like electricity. Once you enter the outsourcing world, there will be no regrets, because you get quality service from your men, and you both wear smiles on your faces during payday. It’s a win win situation.

Outsourcing has its own disadvantages too, like decreasing the employment ratio of your own countrymen, but it’s actually just a matter of choice. Don’t feel bad about yourself because of this inevitable fact, because no matter how hard times are, when a person has guts and wisdom, he can grab all the chances that come his way. As for you, you also took the wiser choice on investing in other countries. Through this, your business is destined to do greater things.