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Philippine Contact Centers Surpass Indian Competitors

|Includes: International Business Machines Corporation (IBM)

By Jamee C.

When one talks about outsourcing, it is India that usually comes to mind. It cannot be denied that India has the largest market for outsourcing firms. Last October 26, 2010, we published an article entitled “Philippines Continues to Live Up To Offshoring Destination Of The Year Title“, which reported that despite having been given the Offshoring Destination of the Year award, the Philippines still ranks second to India in the outsourcing space. There is indeed a remarkable gap between these two countries. But while there is a significant difference between the two, recent figures show that the Philippines is actually starting to catch up and close the lead between it and India.

In the call center branch of the industry, latest forecast figures from the Everest Group show that the Philippines will be able to surpass India’s contact center revenues this year. Everest Group reported that the Philippine contact center industry will pocket about $5.7 billion, from clientele mainly from European and American companies, while the Indian contact center revenues will be $2 million less than the Philippines. The forecasted overall outsourcing revenues for both countries for 2010 however show that India’s revenues will still surpass the Philippines with a total of $70 billion as compared to the Phillippines’ $9 billion.

If you recall earlier, we wrote an article entitled, “Test Results Reveal Philippines Ahead in Language Skills over India“, which discussed the test results of the Pearson Talent Assessment’s Versant English proficiency Tests. The test showed that the Philippines is currently number one in terms of English proficiency, ahead of India. Adding this to the forecasts by Everest, it shows just how much the Philippines is actually catching up.

Even Indian outsourcing companies are seeing the difference, transferring some of their services to Philippine soil. Just recently, Tata Consultancy Services (NSE:TCS), an Indian outsourcing company, announced that it has opened a new BPO center in the country’s capital, in order to take advantage of the country’s pool of skilled individuals. Another company expanding in the Philippines is IBM (NYSE:IBM), who recently expanded its businesses in the Philippines with the opening of a new office located in Quezon City. This recent addition to IBM centers in the Philippines would cover finance and administration, and customer relationship management (NYSE:CRM) services, among others.

Customer Relationship Management (CRM) and other contact center outsourcing services have significantly improved in a short span of time especially with the Philippine government continuously supporting the business process outsourcing industry with government officials providing positive projections for the industry in the next five years. Even current Philippine President Benigno Aquino III has advised that there will be a significant amount of budget that will be allocated for the IT outsourcing industry in the country.What this means is that, given the continuous accomplishments by the Philippine outsourcing industry, and the continued progress that the country is seeing with the positive forecasts and results, the country will likely double its efforts to maximize the potential that the outsourcing industry presents. In the near future, it is more than likely that the Philippine outsourcing industry will beat India, perhaps not only in the contact center aspect, but maybe even in the outsourcing industry as a whole. We will have to wait and see.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.