Manila outshines Delhi in IT outsourcing

Indian Information technology outsourced service firms continue to dominate the field but their counterparts in the Philippines are rapidly carving a place for themselves as alternative providers, according to an IT and outsourcing consultancy group.

While India continues to dominate information technology outsourcing (ITO), the Philippines strengthened its position as a leading alternative ITO destination, according to a recent report from Tholons Inc., which lists the world’s top 100 ITO hubs each year.

The report said, Manila moved to third place behind Bangalore and Mumbai on the list, replacing Delhi and breaking India’s monopoly of the top three spots. Furthermore, another Philippine municipality, Cebu City climbed one place to number eight on the list while five of the country’s other centres made it into the top 100.

One of the advantages the Philippine ITO sector enjoys over its rivals, according to the global economy and investment consultancy firm Oxford Business Group, is its easy access to United States market reinforced by shared historical and cultural ties and an ample supply of skilled workers with a good command of the English language.

The country’s current IT and IT-enabled services market is estimated at $14 billion, but a few years ago the total market accounted for only half of that. The number accounts for more than four per cent of the nation’s gross domestic product. The sector, called Business Process Outsourcing (BPO) in the Philippines, is expected to earn no less than $25 billion by 2016. No less than 640,000 Filipinos are employed in the industry.


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Large businesses, mainly from the U.S., Europe and Australia have BPO operations in the Philippines. Among the few Canadian companies outsourcing to the country is Telus Corp. which employs more than 3,000 workers in a massive call centre in mall located in a former military installation converted into a commercial and industrial centre.

Telus initially considered India but chose the Philippines instead because the Indian market was already heated at that time. The successful operation, which began in 2005, now has some 40 clients which includes several North American telecom and cable firms and one line video game companies.

Canada is facing a shortfall of about 160,000 ICT workers over the next three years, according to a research done by the Ryerson University’s Ted Rogers School of IT Management.

“Outsourcing or off shoring can solve some of this demand and close the gap,” according to Mark Schrutt, director of the analyst firm IDC.

About 20 per cent of major Canadian firms are now offshoring and the number is expected to grow in the near future, he said.

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Jim Love, Chief Content Officer, IT World Canada

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