Wednesday, November 09, 2005

No Easy Road for Philippine BPO Business – Study

According to a study by McKinsey Global Institute, Philippines, an emerging outsourcing destination, has to take some crucial steps to improve its competitiveness against established destinations such as India.

The institute predicts the offshore services market to create an additional 2.6 million jobs at various offshore locations including the Philippines. As per the study, the country offered around USD 1.7 billion worth of offshore services in 2003 and currently employs close to 100,000 people. The cost-reduction along with a higher density of skilled labor pool are the two most important factors in favor of region.

However, the study cautions that the country has been able to tap only a fraction of the global outsourcing market despite these credentials because of several adverse reasons. Prime among them is the poor risk profile of the country along with other reasons like frequent natural disasters, security threats, and data theft incidents. The lack of third-party vendors is also seen as a major hindering factor.
The report highlights that a supporting government and facilitating legal framework may augur well for the Philippines outsourcing sector as these will the country to successfully tap the cost conscious global outsourcing market.

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