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March 6, 2011 | 
Global consulting firm A.T. Kearney placed the Philippines further down, rank #9, in terms of BPO (Business Process Outsourcing) attractiveness in its Global Locations Index 2011, citing that the fallout from the financial crisis shook up the rankings, as once-expensive countries moved up.
An industry insider in the outsourcing sector of the Philippines would like to disagree.
According to A.T. Kearney, a sluggish recovery creates economic pressure that drives business outsourcing, an increasingly complex global economic environment has led to major changes in the ranking of the most attractive offshoring destinations.
The Philippines was at 7th place in the firm’s 2009 ranking, now held by Thailand, which also dropped three rungs from its previous rank of #4.
India, China and Malaysia remained in the top three spots—positions these countries occupied since the inaugural Global Services Location Index in 2003. The firm cited a combination of human resources and low cost as reasons for this consistent ranking.
Vietnam rose two notches at 8th place, it has overtaken the Philippines. Vietnam was given strong scores in terms of financial attractiveness, people skills and availability, and business environment.
A.T. Kearney gave more weight to financial attractiveness, because cost advantage is typically the primary driver behind location decisions.
Outsourcing2Philippines CEO and TeamAsia managing director Michael Hamlin disagrees with the A.T Kearney’s rankings. If attractiveness was based on cost-advantage on value-for-cost people skills and availability, the Philippines deserve a much higher ranking. Citing other studies- like the IBM Global Location Trends Report and the IT-BPO Road Map 2011-2015 developed by Everest Group– the Philippines ranked much higher in the attractiveness of its people skills.
Everest group announced that the Philippines took the lead in BPO from India in 2010, with more workers directly engaged in the industry. In terms of supply, among recognized offshore outsourcing centers, the Philippines is number three in the world in annual tertiary graduates after India and China.
It is also number three in the number of finance & accounting and business degrees – and only slightly behind China – graduated annually. The Philippines is the number three producer of IT and technical talent. It produces more certified public accountants than India.
Everest ranks the Philippines number two after India in cumulative talent competitiveness (scalability, experience, quality of English, and size of graduate pool).
India and the Philippines are at par on Everest’s risk index for English BPO. The Philippines has also become an important center for knowledge-based services in a wide range of sectors for both BPO services providers and shared services facilities. More than one third of total industry employment is engaged in delivering complex services.
India and China understand the overall attractiveness of the Philippines, which ranks number three for investment from these countries after the United States and the United Kingdom. Every major India BPO services provider operates a facility in the Philippines, some more than one.
With an estimated 530,000 people employed in the industry at the end of 2010, the Philippines far outranks all the Southeast Asian countries ranked above it by AT Kearney in employment. terms.
Outsourcing in the Philippines – Full-time Professionals to hire!
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Sources:
- Dagooc, Ehda. “Slide in BPO ranking a wakeup call.” 9 February 2011. Cebu’s the Freeman. Accessed 3 March 2011. Link Here.
- Hamlin, Michael. “AT Kearney misses the mark.” 2 March 2011. The Manila Bulletin. Accessed 3 march 2011. Link Here.
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