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Operations and Costs Under Control
January 15, 2007


Outsourcing's Easy and Vigorous Progress


Offshoring is defined as the movement of a business process done at a company in one country to the same or another company in another, different country. Almost always work is moved due to a lower cost of operations in the new location. Offshoring is sometimes contrasted with offshoring outsourcing. Outsourcing is the movement of internal business processes to an external company. Companies subcontracting in the same country would be outsourcing, but not offshoring. A company moving an internal business unit from one country to another would be offshoring, but not outsourcing. A company subcontracting a business unit to a different company in another country would be both outsourcing and offshoring.

A further term sometimes associated with offshoring is bodyshopping which is the practice of using offshored resources and personnel to do small disaggregated tasks within a business environment, without any broader intention to offshore an entire business function.

Once companies are comfortable with services offerings and started realizing the cost savings, many hi-tech product companies started using countries like the Philippines for innovating products.

Many famed Silicon Valley based companies jumped on this bandwagon not only to cut costs but to shorten their product cycles and access the large talent pool available in these countries.

Offshoring has been a controversial issue spurring heated debates among economists, some of which overlap those related to the topic of free trade. It is seen as benefiting both the origin and destination country through free trade, providing jobs to the destination country and lower cost of goods and services to the origin country. This makes both sides see increased GDP. And the total number of jobs increase in both countries since those workers in the origin country that lost their job can move to higher-value jobs in which their country has a comparative advantage.

On the other hand, job losses and wage erosion in developed countries have sparked opposition to offshoring. Experts argue that the quality of any new jobs in developed countries are less than the jobs lost and offer lower pay. Economists against offshoring charge that currency manipulation by governments and their central banks causes the difference in labor cost creating an illusion of comparative advantage.

The Philippines is considered as the most serious rival to India in the global BPO market. This is because as a former American colony, the country's education system is patterned after the American education system and this includes American-style diction and pronunciation of the English language. This gives Filipino-English a neutral or an almost American accent, an advantage in dealing with the mostly American clientele. By contrast, while an emerging IT powerhouse, India's call center industry is criticized for having a language barrier due to the fact that Indians (as a former British colony) are educated in British-style English which is compounded by the heavy Indian accent. In 2005, the country ranked 3rd in the world for top BPO destinations, according to neoIT's 2005 Mapping Offshore Markets Update.

The Philippines has emerged as a strong player in the rapidly evolving offshoring industry, competing successfully with India and other low-wage destinations in creating value. This is mainly because of the assured operations and costs under control.

In 2003, the Philippines exported more than $1.5 billion worth of services. Today it employs around 100,000 people in call centers, and the country is beginning to attract work in shared services, data entry/programming, and animation.

Overall, it aims to win 5 percent of worldwide global business process revenues by 2010, creating an industry worth as much as $10 billion.

MGI research shows that, the Philippines boasts widespread English language skills, operations and costs under control, and promising human resource capabilities, risk, infrastructure, the availability of vendors, and a paucity of skilled middle managers.

If the Philippines is to capitalize on the opportunities that are undoubtedly there for the taking, the government, together with the private sector, must work to strengthen the perceived attractiveness and reality of offshoring to the Philippines.

Key areas for action include: developing a clearer market strategy to sell its strengths, tackling infrastructure challenges, enhancing the suitable labor supply, attracting more flagship clients, and establishing an industry association.

Offshoring, Inc, an American owned and operated staff leasing company headquartered in Atlanta, Georgia and based in the Philippines, provides businesses and employers with a simple, no-hassle solution to offshoring business processes, in response to the influx of demand for outsourced products and/or services.

Offshoring, Inc is the foremost offshore staff leasing company that offers the best professionals in the labor pool, such as advanced degree holders and competently trained writers, graphic designers, programmers, media managers, quality assurance representatives, data entry clerks and contact center agents all who have practical experience in the workforce. The company helps international employers significantly reduce searching, training, and operating costs while maintaining complete control over the process. Offshoring, Inc’s edge among other staff leasing companies is the highly qualified skilled professionals that occupy their seats.

Providing US-based confidentiality and non-compete agreements, Offshoring, Inc values the client’s intellectual property and trade secrets in top priority. The company assures clients that the staff they hire are their exclusive employees until the contract expires. All potential staff are extensively reviewed with background checks and constant stern supervision. Offshoring, Inc dutifully protects their clients’ security. Offshoring, Inc’s value proposition of providing the best people, best processes, and best technology at a lower over-all cost applies to any business who gives importance to quality and efficiency. Offshoring, Inc makes sure that business operations and costs under control.

The Philippines' combination of rock-bottom costs and a desirable labor pool is helping to propel the country to prominence as an offshoring location. Public- and private-sector leaders must work together to bolster the country's attractiveness to multinational companies.

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