Offshoring success – Selecting the right offshoring destination for your business

The business processing outsourcing (BPO) industry continues to grow rapidly. This growth has led countries in low-cost jurisdictions to focus heavily on developing their BPO capabilities. As a result of this, many countries across the globe have positioned themselves as high-value offshore service providers, with the Philippines regarded as a top offshoring destination in the world.

What do the experts say?

The recent AT Kearney’s Global Location Index places the Philippines as a top offshoring destination in the world, especially strong in financial attractiveness and people skills and ability. If we then look at this more granularly, particularly in regards to actual locations, consulting firm Tholon’s 2015 report on the top 100 outsourcing destinations placed Metro Manila in second place overall.

Looking at these results, it can be established that the Philippines is a high-quality offshoring destination, offering businesses the opportunity to develop and grow in an environment that is financially attractive with an exceptional talent pool to draw on.

How do I determine which area is suitable for me?

Selecting the right offshoring location is absolutely critical to achieving a successful outcome. As with any business decision, conducting your due diligence on each specific location is a must. Determining which part of the Philippines is right will come down to the specific goals and objectives of your business and then narrowing down the roles you are looking to offshore.

As relative examples, it is common knowledge that that San Francisco is the hub for software development and start-ups, Silicon Valley the epicentre for technology and IT and, as an Australian based example, Sydney’s dominance in the marketing and advertising space. This same principle is applicable to the Philippines as some areas are better known for delivering specific outcomes in particular industries than others. Some areas are far cheaper and some costlier, and some regions have better access to specific talent pools than its neighbour may have.

To determine which areas are suitable for your business to offshore, ask yourself:

  • Do I need access to a highly skilled and motivated workforce?
  • Am I looking to offshore roles where competition for candidates is fierce?
  • Are the roles quite simple, easy and process driven?
  • Do I want to set-up a call centre or voice operation?
  • Is cost a major factor? The cheaper the better?
  • Do I value employee engagement and cultural integration?

I have an idea, where to now?

Let’s refer back to Tholon’s 2015 Survey again. If we scroll down the list of locations you will see (as mentioned) that Manila is in the second spot. Unfortunately, the other offshoring locations in the Philippines do not fare so well:

  • Cebu – 8th
  • Davao City – 69th
  • Santa Rosa, Laguna – 82nd
  • Baquio City – 95th
  • Metro Clark – 98th

There are a variety of reasons as to why selecting Manila as your offshoring destination in the Philippines is the smart option. The disparity in the above results stems down to the value and quality that Manila does offer over competitor regions.

A few of the key reasons include:

  • It is the capital city of the Philippines where both large and small companies from other countries have established their businesses
  • Metro Manila (NCR) is considered the nation’s gateway to the world.
  • It is considered the pioneer of the BPO industry, making it a prime spot for outsourcing solutions.
  • The latest technology is initially released here, so business owners who are planning to offshore can expect that information technology here is more aligned to global standards and it is up to date to deliver their requirements more efficiently.
  • Access to a larger, higher quality talent pool
  • Far better resources, infrastructure and technology
  • Easy access for staff

Selection should be based on ideal outcomes

As an organization’s quality outcomes are reliant on quality processes and resources. The alternative locations available can be viable options if you are looking to implement an offshore solution that is totally centered on cost savings, or the offshoring of low skilled and high volume work. As an example, if your business is looking to roll out a large call center operation then it may be worthwhile considering Clarke or Cebu as your destination.

A recent BPAP report stated that: “the current outsourcing activity in the locations is small compared to that of Metro Manila. Stand-alone suppliers in these cities are low on service maturity, having to make do with employees who have no significant experience and insufficient infrastructure.”

If a business’ drivers towards an offshore implementation are cost, access to low-skilled, unsophisticated functions or setup of large voice accounts, then areas outside of Metro Manila should be considered.

However, if your business is looking to offshore key functions that require high-quality candidates with practical experience and a solid understanding of working with high-performance organisations, Metro Manila should be your top destination.

Diversify is a high quality provider of offshore staff solutions located in the heart of Manila. Our high class location, excellent facilities and focus on staff engagement have positioned us as one of the leading offshore service providers in the Philippines.

Key takeaways

  • Location is critical – make sure you choose a location that reflects your business objectives
  • Different regions in the Philippines have different connotations – some bad, some good
  • Manila is considered the premier offshoring location in the Philippines – it provides access to the best candidate pool
  • Other regions may be cheaper – this is at the expense of service, employee engagement and ease of access
  • If you are looking for a sophisticated multi-function offshoring implementation then Manila should be the only place you consider

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