Outsourcing Philippines: The Top Choice of Many Big and Well-established Firms of Today

Outsourcing is the contracting out a business process by one business organization to a third party organization, which may be located either nationally or internationally (known as off-shoring). This business movement is usually resorted to by the host firm due to a lack in the number of skilled individuals (in its own state/country) needed to fit a certain job description.

Another reason why outsourcing, more so off-shoring, has become a vital business tactic among many big and developing companies is the much more favorable economic advantages it offers to both the host and third party organizations. Its greatest advantage is the opportunity of the third party organization to earn profits through the creation of new jobs, while for the host company, much lower cost in overhead or operating expenses since employment in the chosen country is much cheaper than in theirs. Furthermore, host firms are offered various incentives by the third-party’s country, like income-tax holidays, vital off-site facilities, foreign investors and their immediate family members are granted permanent resident status, choice of paying a special 5% gross income tax instead of the local and national taxes, and so forth. Besides these, host companies also get to enjoy greater control and flexibility in their budget for, rather than hiring the experts themselves, this task will be the concern of the third party company, which will also be responsible in training their hired personnel for the outsourced project.

One of the countries considered by many top companies around the globe, as well as by many Fortune 500 companies, as a good place where to outsource services and other concerns, is the Philippines. Besides being one of the top countries in the business process outsourcing (BPO) industry, where non- voice and, especially, call center services are concerned, the country is also an emerging top competitor in the area of 24/7 live chat support, phone services, medical billing, records retrieval/collection, data entry, web and IT services, which include application maintenance, software development and web design, and in many other types of services, like computer animation, medical transcription, legal services, research, blogging and content writing. Besides these services, many other outsourcing companies, like Pinoy Partners Outsourcing Center Inc., for example, has grown to include in its list of services, Construction Estimating, which is handled by team of on-screen-take-off specialists who are ready and can help and allow construction companies bid on more projects.

Awareness of the business culture in western countries, strong skills in the English language, high literacy and expertise in various areas, competitive labor rates, and a firmly established telecommunications infrastructure, are just some of the factors that make the Philippines the first choice of many of the biggest and well-established firms of today.

Outsourcing Philippines started in the 1990s, becoming more famous at the turn of the century. By 2004 the industry’s worth was estimated at $1.5 billion. In 2009, after only five years, its worth ballooned to about $9 billion.

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