Philippines one of top 30 countries for offshore services in 2008

by: Jerry Liao

Businesses are continously evolving and so as the nature of competition. Competition between companies is seen as an inevitable part of doing business. Competition and challenges are not confined within one’s company or one’s territory, competition can come from a lot of angles / directions especially in the area of offshore services.

Just recently, research firm Gartner has assessed the suitability of 72 countries as offshore locations, and has announced its ‘Top 30’. The analysis showed that the dynamic nature of the market has seen a number of countries position themselves as credible alternatives to the BRIC countries (Brazil, Russia, India and China).

“Countries such as Mexico, Poland and Vietnam have continued to strengthen their position against leading alternatives, while others have forced their way into the ‘Top 30’. These countries will be seeking to take advantage of the opportunity created by the increased focus that many organisations now have on cost optimisation, as a result of the current economic crisis,” said Ian Marriott, research vice president at Gartner.

In 2008, Gartner’s top 30 locations for offshore services, by region, were:

– Americas: Argentina, Brazil, Canada, Chile, Costa Rica, Mexico and Panama

– Asia/Pacific: Australia, China, India, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Thailand and Vietnam

– Europe, the Middle East and Africa (EMEA): the Czech Republic, Egypt, Hungary, Ireland, Israel, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Spain and Ukraine

Ten countries from Asia/Pacific were represented in the 30 leading countries. These included the undisputed leader in offshore services — India — and the greatest challenger in terms of potential scale — China. The rest are a mix of mature environments that offer limited cost benefits (such as Australia, New Zealand and Singapore) and emerging countries with a variety of challenges, but attractive costs (such as Malaysia, Pakistan, the Philippines, Thailand, and Vietnam).

Gartner also found that external service providers (ESPs) have started to target places outside the ‘Top 30’ to get closer to mature countries, such as the Nordic regions and France that show increased interest in offshore. “Given the current financial turmoil, cost will remain an important factor. However having the right balance between lower cost and higher risks, and lower risks and higher costs will be critical in times of recession and uncertainty,” said Mr Marriott.

The top 30 countries for offshore services were rated according to 10 criteria that will help determine which locations are right for individual organisations. The 10 criteria were: language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, and data and intellectual property security and privacy.

We as a country should act together if we want to improve or at least maintain our competitive advantage over other countries. The Gartner assessment proves that the Philippines has the potential of becoming big in this offshore services arena. Let us not waste it but rather make good what we have already.

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