Competition leads to diversified outsourcing services

Increasing globalization of the outsourcing sector — with more and more countries jumping on the bandwagon — has forced industry leaders to diversify their offerings, a global survey conducted by PricewaterhouseCoopers (PwC) last year showed.

“The dramatic increase in the number of emerging outsourcing destinations is driving the industry to become even more global and is forcing the incumbents to expand their operations across regions,” the survey said.

The survey summary showed that only India and China offered multiple “most popular” outsourcing sites, followed by Makati, Manila and Cebu cities in the Philippines. “India may still be the market leader, but [it is] no longer the only outsourcing hotspot,” it added.

Highlights of the survey, whose respondents consisted of 500 outsourcing service providers from 50 countries, were presented by top executives of Isla Lipana & Co., PwC’s Philippine partner, at a press briefing on Wednesday. A global outsourcing conference will be held on Feb. 8 and 9.

Based on the survey, only India — through its cities Bangalore, Chennai, Delhi, Hyderabad, Mumbai, and Nashik — offered a whole range of outsourcing services, namely contact center, financing and accounting, human resources, procurement, marketing and sales, and legal services.

Bogota, Colombia was the only other site that offered the whole gamut of services.

China has the second biggest number of cities offering services, except for legal ones — Beijing, Dalian, Guangzhou, Shanghai and Shenzhen. The Philippines offered most, except for procurement.

But the table summarizing the various sites worldwide gave an idea of the rising competition.

For contact centers, Makati, Manila and Cebu compete with Bangalore, Chennai and Mumbai in India; Beijing, Dalian and Shanghai in China; Sofia in Bulgaria and Budapest in Hungary; Barcelona and Madrid in Spain; Bogota in Colombia, Buenos Aires in Argentina, and Lima in Peru.

For financing and accounting, Makati and Manila face Bangalore, Chennai and Mumbai; Beiing, Dailan and Shanghai; Sydney, Australia; Munich, Germany; Zurich, Switzerland; Bogota and Buenos Aires,

In the field of human resources, Manila is pitted against Bangalore, Mumbai and Hyderabad, India; Beijing, Shanghai and Guangzhou, China; Taipei; Singapore; Munich; Bogota, Buenos Aires and Sao Paulo (Brazil).

For marketing and sales, Manila faces Bangalore, Chennai and Nashik, India; Dalian, Shanghai and Shenzhen; Kuala Lumpur, Malaysia; Taipei; Munich and Frankfurt in Germany; and Bogota and Sofia.

In legal services, Manila is competing against Bangalore and Chennai; Sri Lanka; Bogota and Medellin, Colombia; London, UK; and Prague, Czech Republic.

Competing in the procurement space, where the Philippines is noticeably absent, are Bangalore, Chennai and Delhi; Dalian, Shanghai and Shenzhen; Munich; and Bogota and Sofia.

“Survey results showed that 21 percent of procurement outsourcing providers are based in Western Europe, with leading Indian service providers accounting for 20 percent of the overall market,” it said.

Charlie P. Villasenor, chairman of the Procurement and Sourcing Institute of Asia, said the Philippines should look at procurement outsourcing as its next niche. “We can build a country brand with the Philippines being a procurement outsourcing capital because this is a good business with untapped savings potential for so many companies,” he said, noting that few Asian countries offer this service.

One new field where the Philippines is flexing its muscles is legal process outsourcing, which consists of legal research, document review and drafting of pleadings.

The survey said the Philippines and Sri Lanka together account for a fifth of legal process outsourcing, next to India-based providers and US firms, which were not in the summary of key outsourcing cities.

In the briefing, Judith V. Lopez, chairman and senior partner of Isla Lipana & Co., said the country’s “close alignment to the American legal system attracts businesses from the United States,” besides the oft-cited advantages of a relatively cheaper, educated workforce that is proficient in English.

Source: GMA News

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