Philippines voted Top 10 Locations for Offshore Services

Here’s one great news for all of us. For the report ‘10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010’, the Philippines was recently included as one of the top locations for offshore services in Asia Pacific in 2010. Gartner analyzed the capabilities and potential of various countries as offshore services locations in the region. A separate report identifies the top 30 globally.

Offshore simply means “any country other than your own.” Offshore services means to place services outside of one’s home country.

The 10 leading countries in Asia Pacific included the undisputed leader in offshore services India, with China remaining the greatest challenger in terms of potential scale. The other countries include a mix of mature environments that offer limited cost benefits (Australia, New Zealand and Singapore) and emerging countries with a variety of challenges, but attractive costs (Malaysia, Indonesia, the Philippines, Thailand and Vietnam).

“Countries such as Malaysia, the Philippines and Vietnam have continued to strengthen their position against leading alternatives, while Indonesia has entered the top 10 for the first time,” said Jim Longwood, research vice president at Gartner. “Some of these countries have invested considerably and leveraged increased demand for lower-cost services. The global financial crisis forced many organizations to place a greater emphasis on cost optimization.”

Although included on the list, Philippines with Thailand, Vietnam, and Indonesia all rated less favourably for political and economic environment. While low cost is an important factor, the political and economic environment remains a concern for many companies when moving business to offshore locations. This is something the Philippine government should work and improve if we want to be competitive in this field.

Infrastructure is the only area where most countries ranged from good to excellent, with Vietnam and Indonesia the only exceptions. Most locations were considered good to very good for language and cultural compatibility whilst China, Indonesia, Thailand and Vietnam weren’t rated as strongly.

In addition to the top 10, four other countries were also strongly considered: Pakistan, Sri Lanka, Bangladesh and North Korea. All of these countries have started to establish attractive environments for companies looking for low-cost countries or that have external service providers located in these countries that are beginning to sell services beyond the domestic market.

The top 10 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, globalalisation and legal maturity, and data and intellectual property security and privacy.

What can I say about this recent report? Congratulation of course and I really want to see the Philippines as part of this list for a longer time, if possible on the top 3. Do not let this opportunity go to waste. It’s already here, keep it and improve on it.

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