There is much talk recently about the Philippines having stolen a march over India and other Third World countries when it comes to the burgeoning call centre outsourcing industry. The call center industry comprises 80% of the outsourcing industry in the Philippines. For some skeptics, it may seem like the beginning of the end for the Indian outsourcing boom. Has the bubble finally burst?
However, nothing could be further from the truth. India’s position as the world leader in outsourcing as a whole remains unshaken and undisputed, despite the Philippines having commandeered a sizeable chunk of the BPO market. India is still hailed as the hub of the outsourcing industry and continues to be the world’s favourite outsourcing destination. There has to be a very strong reason behind this rationale.
All these facts are indeed impressive. However, why is it then that India continues to dominate the outsourcing world?
One must remember an essential fact. The call centre outsourcing industry is in its fledgling stage in the Philippines. It is just starting out, so naturally their costs are slightly lower whereas in India, because the call center outsourcing has been in existence for over a decade now, costs have slightly risen. Secondly, due to their affinity to the American culture, the fluency in English of the average Filipino is another point in their favour.
Outsourcing is not a new phenomenon in India. It started in a very basic way some 20 years ago and it has been getting more and more complex ever since. In other words, the Indian outsourcing industry is evolving constantly. While initially companies outsourced back end work like legal transcription, today core legal research is also being outsourced. So, looked at from this perspective, Indian outsourcing may have lost some of its share to the Philippines, it most certainly does not mean that it is in decline. It simply means that it is just encompassing more complex and new sectors.
It just so happens that outsourcing in India started with call centers and IT outsourcing, but the fact of the matter is that this pattern can be repeated several times over in other fields too – AND IT WILL and it is just starting too. Fields like SEO, medicine, law, engineering are only just beginning to realise the benefits of outsourcing to talented Indian professionals.
What could act as a deterrent to outsourcing to the Philippines, however, is a) its comparatively small population, which obviously means lesser number of people available for work in any field, b) it just does not have the requisite talent in other fields. Sure, it can compete with India where fluency in English and BPO is concerned, but beyond that, it simply lacks the numbers or the expertise to dislodge India from its very firm position at the top of the outsourcing heap. They do not have anywhere near the same number of engineers, doctors, lawyers, accountants or architects. They simply cannot compete in these other industries because they just do not have the numbers and that is why India will always maintain its dominance.
So, in the final analysis, it does appear that India will continue to retain its supremacy on the outsourcing industry. Competition is only to be expected; however, it must be kept in mind that outsourcing has now entered its second phase of sorts. With even core functions now being outsourced to India as opposed to the initial cautious outsourcing of only the non-essential business processes, the Indian outsourcing vendors have proved that they are more than capable of being trusted with complex, long-running projects that need greater and intensive involvement from their side.