India and China are the preferred outsourcing destinations at present. In case you are looking for a new destination in the outsourcing field then you may consider Philippines. Philippines is emerging as a brilliant outsourcing destination with several companies that provide remarkable services and efficient labor.

Numbering around 106 companies and still counting, call centers are among the fastest growing segment of a new industry in the Philippines called the “business process outsourcing.” Philippines is one of the locations that is having a great labor pool and competitive market. Investemnets in the call centers alone have been rising at an average of 70% every year since last five years. One good thing about the Philippines is its fluency in the English language and the skills it has generated throughout the years.

Philippines is becoming a better outsourcing board than its competitor countries due to factors like performance issues and increasing wages, etc. This country is blessed with better people, better business environment, better infrastructure, and a better lifestyle as compared to other places that can be opted for the same purpose.

Philipines is well equiped with all facilities and services that are expected from the best outsourcing country. It has excellent english skills, poeople with customer centric thinking that can offer great customer service and an aptitude for problem solving.

Philippines still needs to put in some effort in the jobs related to the marketing field. Currently too, the country has a several good options with the excellent marketing jobs. With Philippines the companies can save as much as 50% to 60% of the cost compared to the US.

The Philippines has the lowest power and real estate rates among all other countries followed by South Africa. However, power and utility infrastructure don’t contribute significantly to the total operating cost. The high price will only have marginal impact in deciding call center attractiveness.

Asia right now is being powered by several engines — India, China, Korea and the ASEAN region — all these economies will compete for talent from the region. The Philippines has significant advantage from the point of view of language, education and familiarity with western business processes. That’s why so much of the world accounting is done in the Philippines.

Source:economictimes.indiatimes.com

Five years ago, when Wipro wanted to build back office outsourcing capabilities, it acquired Spectramind. Later, IBM built its business process capabilities in India by buying out Daksh. Such acquisitions gave companies a quick way to enter the booming sector or scale up existing capabilities.

But acquisitions are no longer the only route for technology companies to achieve inorganic growth in India and new cost-effective alternatives are gaining popularity. Companies are experimenting with carving out of business functions, reverse build-operate-transfer and other means that don’t involve buying up a firm but still boost size and add expertise in new service lines.

Infosys BPO, for instance, initially considered acquiring a stake in Citigroup Global Services but dropped the idea as it considered the asking price too high. Recently, it entered into a deal with Philips Electronics and took over the latter’s finance, accounting and non-product related procurement functions along with a staff of 1,400.

The deal involved an upfront cash payment of $28 million and a committed business worth $250 million to Infosys. This was the largest such deal in finance and accounting segment and also gave the Indian company trained manpower, systems and processes, a nearshore presence in Poland and a centre in Bangkok.

“Why will they pay so much for Citi when they can build scale by acquiring captive units at much more competitive prices?” a senior analyst with a brokerage asked. A deal with Citi could have involved a valuation of $700 million for a 9,000 people operation.

With alternative models such as this emerging, the need to do an acquisition is no longer as pressing as before. “This the reverse of a BOT (build-own-transfer) transaction. In a BOT transaction, the BPO builds and runs the operations for a client and after a few years, transfers it to the client along with the people. In the Infosys-Philips BPO deal, it is reverse, where the people and operations are taken over by third party,” said Milan Sheth, partner at Ernst & Young.

Two years ago, Tata Consultancy Services (TCS), which had sold off its stake in Intelenet Global Services and was building its own BPO capability, took over 950 employees of the Pearl Group of UK in a similar deal that gave it an $850 million BPO contract.

Another innovation on the horizon is carve-outs. “Carve-outs usually happen in a pre-outsourcing scenario, where an investment banker may suggest to the company that instead of outsourcing, they can sell off the entire function,” Mr Sheth said.

“There is no exact formula to value these transactions. It depends on what business the buyer is getting for the next 3-5 years, how it can leverage the capability to win other clients in the same space and what the upfront fee is.” Infosys, according to sources in the know, is evaluating two more deals that involve acquiring part of or entire captive units.