Outsourcing business is truly an economic blessing to Asian countries and other parts of the world. There’s so many to mention about this industry which became powerful over a decade because of the high demand of the customer service. Large call center companies started to harvest the fruits of their labor due to the continuous patronage of their customers worldwide.
When it comes to notable leader of call center industry, it has been told that India has dominated the market. The year 2006 is the increased of globalization for the business process outsourcing, with overseas contact centers in Asia, Central and Eastern Europe. Despite the report released by the UK reporters uncovered an unsettling underside to the Indian call center industry-lax security of customer data. The British media managed to uncover criminal rings that sold data from millions of customers, accessed from Indian call centers. As a result of this, many companies pulled out of the Indian call center industry over the last year. But in general India is still coping up with this industry.
Let’s take a closer look of India, situated over 7,000 km (4,350 mi), this country lies on a peninsula in Southern Asia that protrudes into the Indian Ocean. India is bounded in the southwest by the Arabian Sea and in the east and southeast by the Bay of Bengal. With a record breaking population of 936,545,814 estimated in July 1995, with 1.8 percent annual growth rate. About 74 percent in rural areas in 1991; high population density–284 persons per square kilometer national average, major states more than 700 persons per square kilometer; 100 persons or fewer per square kilometer in some border states and insular territories. Bombay (officially renamed Mumbai in 1995) largest city, with 12.6 million in 1991; twenty-three other cities with populations of more than 1 million. Language spoken is English including the 1,652 different “mother tongues”.
Meanwhile, the Philippines being an agricultural country is now receiving recognition in the call center arena. Now, the Philippines is considered to be the major player and hotlist competitor of India. Foreign investors would say “hello Philippines”, which means the country is the preferred destination for outsourcing against India and other countries like China, Russia, Malaysia, Mexico, Brazil, Ireland and Canada. The Philippines continue to conquer the world of information technology such as BPO and call centers. The valuable knowledge of the Filipinos in customer service and other valuable resources are among of the few reasons that Philippines is surpassing India. Large call center companies are occupying the skyscrapers in the major business districts in metro Manila and other provinces in the country.
The sophisticated development of contact centers everywhere in the Philippines is not possible without the strong support from its government. In addition, The Philippine IT outsourcing industry’s advantages as an outsourcing destination include overall quality, low cost, good quality education, good value, increasing domain expertise and increasingly sophisticated performance metrics and program management skills. The American invasion is a proof why Filipinos have fluency in English language. With the literacy rate of 94.9% by 2000, with female literacy rate of 94.8% and male literacy rate of 95.1% is also a great reason. President Gloria Macapagal-Arroyo had designed programs that will boost the literacy rate of the Filipinos with the partnership from the different sectors led by the Department of Education (DepEd).
The Cyber Corridor encompasses centers of technology and learning running the length of all the super regions, from Baguio to Clark to Metro Manila to Cebu to Davao and neighboring areas. This was given priority agenda by the Mrs. Arroyo in her 2006 and 2007 State of the Nation Address (Sona). In her recent Sona in July this year, she outlined that the Philippines ranks among top off-shoring hubs in the world because of cost competitiveness and more importantly our highly trainable, English proficient, IT-enabled management and manpower. The growth of ICT-enabled services in different regions in the Philippines successfully contributed significantly to the country’s revenue collections.
The Cyber Corridor is an ICT channel running over 600 miles across the country, from Baguio City in the north to Zamboanga down south of the archipelago. Supported by a $10 billion high bandwidth fiber back-bone and digital network, the Cyber Corridor will be home to numerous cyberservice providers that supply expert services in various fields of ICT, such as business process outsourcing (BPO), contact centers, animation, medical and legal transcription, software development, e-learning, e-entertainment and gaming, and other back office operations, among others.
The BPO and contact center locators continuously seek places where to establish their business. The increasing demand of more practical and feasible outsourcing sites outside Metro Manila, Metro Cebu, Clark in Pampanga, Baguio City and Metro Davao, considered as mature sites, have spurred the growth of ICT in the countryside. The cities like Sta. Rosa, Lipa in Batangas; Legaspi and Naga in Bicol; Tagbilaran, Tacloban, Dumaguete and Bacolod in Visayas; and Cagayan de Oro in Mindanao currently play hosts to some of the biggest BPO players in the country. What acknowledge locators to these places are the availability of quality workforce, redundant telecommunications facilities, sound business and incentives package from the local governments, among others.
WHY INVEST IN THE PHILIPPINES?
According to the Philippine Economic Zone Authority (Peza), the Philippines is fast becoming the preferred haven for foreign investments in the Asia-Pacific region. Its investment climate is conducive more than ever to foreign investors. It has a continuing economic and financial reform program to be more competitive in the international market. It has rid itself of excessive government regulations and has liberalized all sectors of its economy.
Peza stated that telecommunications, shipping, oil, banking, and insurance industries have been deregulated. Strategically located, the Philippines provides a natural gateway to other Asia-Pacific economies. It has flourishing trade links with its Asian neighbors due to shared history, cultures, and tradition. The economic reforms are in place and continues to be improved. Business is liberalized, promotional and less regulatory, and attuned for global competition. There’s full (100%) foreign ownership of enterprises, facilitative assistance and simplified investment procedures. A market composed of 76.5 million Filipino consumers.
Peza is a government corporation established through legislative enactment known as “The Special Economic Zone Act of 1995”. It is an investment promotion agency and a government owned corporation, attached to the Department of Trade & Industry (DTI). It offers ready-to-occupy locations to foreign investors who are export producers or IT service exporters in world class and environment friendly Economic Zones and I.T. Parks/Buildings.
PHILIPPINE VS INDIA
In comparison between the Philippines and India in terms of labor pool, cost and government policies. On labor pool, the Philippines produces 380,000 graduates annually. The country has abundant supply of quality labor with a large pool of knowledge-based, multi-skilled, highly-educated, highly-trainable, literate, English-speaking workforce. Low employment turnover (less than 1%), high productivity yields, highly adaptable to model changes, and familiar to quality work needs. India, on the other hand, produces over 75,000 IT graduates and 20 lacs English-speaking graduates annually.
On Labor Cost:
According to the Bureau of Labor and Employment Statistics under the Department of Labor and Employment (DoLE) revealed in 2002, employers in non-agricultural establishments spent a total of PhP460 billion in labor cost, representing a 46 percent increase over that incurred in 1998 at PhP315 billion. At least one-third of total labor cost is still accounted for by manufacturing establishments. While, India’s labor costs have crept upward over the years but have been offset by falling telecom rates. Typical salaries range from $5,000 to $12,000 for technical staff, while back-office salaries range from $3,500 to $7,500.
When it comes to political stability, democracy is at its best with true checks and balances in the Executive, Legislative, and Judicial branches of government. Freedom of speech is upheld at all times and the Philippine press remains the freest and most open in Asia if not in the world. The Indian government, meanwhile, administered national minister specifically for IT. The government favors IT foreign ownership and imposes no export taxes.
With the reports indicated, it is predicted that call center industry will remain to be the most promising business in the world.