Competitive Advantage of the Philippines II

Despite being a newcomer in the global BPO industry, the Philippines have steadily increased its foothold as a top outsourcing destination.

Rest of Asia ready to grab BPO jobs from India, RP--study, Agence France-Presse
Last updated 08:44pm (Mla time) 11/05/2006

THE PHILIPPINES and India have to boost their overall competitiveness, as Asian countries gear up to get their share of the global offshore outsourcing pie, a recent global study showed.

These top two outsourcing destinations will eventually compete with China, and other Asia Pacific countries that have similarly positioned themselves as outsourcing destinations, the latest Offshore City Competitiveness Report of market research firm neoIT showed.

The study noted that companies have "moved beyond India" and the Philippines into not so well-known cities in the world since companies want to create a "global footprint."

China and Eastern European countries are starting to attract offshore outsourcing deals because of specific language skills required.

China is particularly keen on toppling India in the "services globalization arena," the study added.

Meanwhile, Malaysia, Thailand, Vietnam, Sri Lanka, and Pakistan are emerging as alternative outsourcing destinations in the Asia Pacific region.

Companies outsourcing their non-core business processes are now looking for multiple locations that cater to specific requirements, the study said.

Manila is currently known for its strengths in English voice-based customer care services, which mainly caters to North American-based companies. It is also an ideal destination for back-office processing activities, such as payroll and accounting, the study said.

Manila has been a global services hub of many multinational companies, and has a "good talent supply" from universities, the study added.

The neoIT study identified two categories used to identify outsourcing destinations: generic and enterprise-specific factors. The generic factors include cost, human capital, infrastructure, risks, and environment. The enterprise-specific factors, on the other hand, include language compatibility, physical proximity (of offshore facility to the company), socio-economic affinity, and the availability of sector-specific expertise. The supply of middle managers and attrition rates are also considered.

Taking into account these categories, the study concluded that the National Capital Region of Delhi is the "most suitable location." This was, the study noted, despite the eroding cost advantage and supply constraints of these cities.

"A lot has been said about India's eroding cost advantage and supply constraints," senior neoIT consultant Sabyasachi Satyaprasad said Saturday.

"But the fact remains that in terms of talent supply and cost arbitrage, India is still the leader," said Satyaprasad, whose company is headquartered in San Ramon, California, with offices in India and the Philippines.

Industry analysts closely watch profit-margin trends of Indian outsourcing companies for signs their competitive edge is eroding.

But Satyaprasad said in an interview with Agence France-Presse that there was no sign of that happening and Indian outsourcing giants like Infosys, Wipro and Tata Consultancy Services routinely report profits that beat market expectations.

New Delhi, Bangalore, Hyderabad, Mumbai, Pune, Chennai and Kolkata were the seven most favored sites worldwide to locate offshore, said the report, assembled from feedback from over 60 clients.

The study also included Manila as among the top 10 cities in the world for offshore outsourcing jobs. Other cities identified were Ho Chi Minh and Shanghai.


Anonymous said...

what about outsourcing of medical claims for HMO's offshore (Medical billing?) Do we have the potential to lead in that field?

Antonio Andolini said...

Before the process of Medical Billing, a physician's report needs Medical Transcription (MT)and Medical Coding.

Med Transcriptionists catering to the US market are not covered by any certification. However, Coders need a US license. I am almost sure that employees doing medical billing are also required to present some kind of a license.

Filipino coders and billers (working in the Phil.) will therefore need to go to the US to get licenses and renew those permits, from to to time, making it quite a tedious and costly process.

At this point, I believe that MT (though a very difficult process) is only possible legally outsourced process, among the three steps.

Thanks for dropping a comment and please feel free to send me more inquiries.


- Andolini

TK said...

If we concentrate on MT, will not voice recognition technology make the MT industry irrelevant? or is that still in the very distant future?

Antonio Andolini said...

The Voice Recogntition Technology (VRT)is still in its infancy. Furthermore, it is a system that initially requires human editors, in order to fine tune the end (written) document.

Human editors are required until such time when the VRT has masterfully transcribeD a specific doctor's dictations. In such an event, the human MT's transform and become Medical Editors (ME's).

The time period required before the VRT will stop requiring the services of an editor will vary depending on its adaptability to the doctor's voice and manner of dictating.

In my opinion, a very good VRT will only serve to make the transcriptionist's job easier.