What really is outsourcing?
The legal definition of outsourcing has yet to be standardized. It may
be defined as contracting or subcontracting a process to an outside
service provider to do commercial functions. This normally involves
long-term contracts. Virtually any long-term service contract is
outsourcing, to some degree. Typically, the jobs being outsourced are
considered non-core to the business.
The
Philippines as an Outsourcing Destination
According to a recent study, the Philippines is one of the top ten
outsourcing locations in the world. The Philippines is one of the two
most preferred outsourcing destinations due to its skilled, educated
and highly trainable manpower.
The Philippines boasts of 35 million skilled workers with
English language skills, 3,80,000 graduates annually and a literacy
rate as high as 94 per cent.
The Philippines has the largest population of US
GAAP-certified professionals outside of the US, therefore offering
tremendous potential for outsourcing of financial services.
Outsourcing is considered as one of the bright spots in the Philippine
economy. It will be a major driver of growth in the 21st century.
Low cost
of doing business
Wages in the Philippines are typically less than a fifth of that in the
U.S. Philippine infrastructure and facility costs are also
50% lower compared to their U.S. counterparts. U.S. companies that are
now outsourcing back office and knowledge processes to the Philippines
estimate 30% to 50% business cost savings.
Business-friendly
policies
The Philippine Government recognizes the huge economic benefits of
foreign investment in the outsourcing industry. It has cooperated with
the private sector in setting up an investor-friendly regulatory
climate, offering fiscal, tax, and other incentives to boost the
Philippine outsourcing industry and to ensure the country's place in
the outsourcing map.
