Outsourcing turns out to be every foreigner’s best resort in order for their businesses to survive amidst global recession. It has also proven its huge contribution to the improvement of the Philippine economy.
The increasing quality of foreign employers seeking services in the Philippines simply proves how capable the Filipinos are in delivering high-quality services almost equal to what employers get from their local employees, ONLY CHEAPER.
Check out more of what you can gain, and how you and your business can profit in outsourcing in the Philippines!
Outsourcing – What is it?
Get a brief definition of what Outsourcing really is.
Outsourcing is the subcontracting of an overseas company to perform services such as customer service, back-office tasks like accounting, technical support, programming, virtual assistance and more.
In the recent times, outsourcing has been most commonly defined in instances where an IT company gives the technical and customer service support to a third-party company to do the job. But the main goal why for example, a US company prefer outsourcing their customer service support department to offshore countries like India and Philippines is because of the AFFORDABILITY of services. The comparative quality than of what the local employees can offer, is of course a Big Plus!
Why Outsource?
Are you still in doubt on why you should outsource? Well, here’s why…
These days, the rate per hour for a highly-qualified US employee is $10. So for an 8-hour, 5-days a week work, you’d have to pay $400 a week just to get the weekly job done. Not to say, that this is just the minimal fee.
However, outsourcing allows you to extend your money and save more. Instead of paying $10 minimum per hour, you can already get an employee offshore with an equal amount of work quality at a $5-6 per hour!
This is clearly the major reason why many foreigners invest outsourcing in other countries, preferrably Asian.
When it comes to customer satisfaction or top-class work, not a problem! Many countries may belong in the 3rd world countries but they have a very good English language background, as well as in technical and back-office tasks. They have a quite impressive passion and determination for learning and for working. So rest assured that you’re business is in good hands.
Reasons for Outsourcing
Source: Wikipedia, “Outsourcing”
Organizations that outsource are seeking to realize benefits or address the following issues:
Cost savings – The lowering of the overall cost of the service to the business. This will involve reducing the scope, defining quality levels, re-pricing, re-negotiation, cost re-structuring. Access to lower cost economies through offshoring called “labor arbitrage” generated by the wage gap between industrialized and developing nations.
Focus on Core Business – Resources (for example investment, people, infrastructure) are focused on developing the core business. For example often organizations outsource their IT support to specialised IT services companies.
Cost restructuring – Operating leverage is a measure that compares fixed costs to variable costs. Outsourcing changes the balance of this ratio by offering a move from fixed to variable cost and also by making variable costs more predictable.
Improve quality – Achieve a step change in quality through contracting out the service with a new service level agreement.
Knowledge – Access to intellectual property and wider experience and knowledge.
Contract – Services will be provided to a legally binding contract with financial penalties and legal redress. This is not the case with internal services.
Operational expertise – Access to operational best practice that would be too difficult or time consuming to develop in-house.
Access to talent – Access to a larger talent pool and a sustainable source of skills, in particular in science and engineering.
Capacity management – An improved method of capacity management of services and technology where the risk in providing the excess capacity is borne by the supplier.
Catalyst for change – An organization can use an outsourcing agreement as a catalyst for major step change that can not be achieved alone. The outsourcer becomes a Change agent in the process.
Enhance capacity for innovation – Companies increasingly use external knowledge service providers to supplement limited in-house capacity for product innovation.
Reduce time to market – The acceleration of the development or production of a product through the additional capability brought by the supplier.
Commodification – The trend of standardizing business processes, IT Services, and application services which enable to buy at the right price, allows businesses access to services which were only available to large corporations.
Risk management – An approach to risk management for some types of risks is to partner with an outsourcer who is better able to provide the mitigation.
Venture Capital – Some countries match government funds venture capital with private venture capital for startups that start businesses in their country.
Tax Benefit – Countries offer tax incentives to move manufacturing operations to counter high corporate taxes within another country.