India vs. Philippines: A Comparative Analysis Between the Global Leaders in Outsourcing

  • April 20, 2011
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India, the world’s current global leader in outsourcing has found a strong competitor in the Philippines. The Philippines, in turn, expressed its determination to surpass India, by outshining its Asian neighbors in a variety of outsourcing industries, from customer support to animation. With Philippines’ low cost but highly qualified, English-proficient labor pool and good telecommunications infrastructure ideal for outsourcing operations, India has to take immediate action to keep pace with its Southeast Asian rival.

As a consistent IT giant in offshore outsourcing industry, India exults in its IT-talented workforce ranking second in the world. Since India became a colony of Britain for several decades, the latter has influenced India’s education system which focuses on mathematics and science. This gives India an edge in information technology which is an essential part of outsourcing operations. In fact, studies reveal that India is the first choice of most US companies for software outsourcing. India’s reliable bandwidth system, caused by its private undersea cable, also gives the country a major advantage over its rivals.

Philippines, on the other hand, is drawing nearer and nearer to India’s crown. Recognized for its large English-speaking population with a literacy rate of 94%, the country also boasts of its large and cost-competitive workforce of IT professionals. In the Global Technology Index 2002 of the META Group, Philippines ranked third in knowledge and information-based jobs. Another major advantage of Philippines is its culture compatibility with Western countries, a result of being a former American colony. Also, unlike many Asian countries, Filipino audience patronizes American television shows and is well acquainted with American literature. Hence, they are effective communicators using English as a medium.

Additionally, Philippines has become one of the most favored offshore destinations for a vast array of outsourcing operations. Because Filipinos are customer-oriented, the country specializes in customer support services and has become a favorite among famous companies like America OnLine and Barnes and Noble. Aside from call center operations, the country takes pride in its growing medical transcription outsourcing industry, significantly because of its large pool of graduates of medical-related courses.

However, at present, India still leads the rank. As debates on which the best outsourcing industry is between India and Philippines arises, market analysts believe that if India stays calm and confident with its present status, Philippines can easily surpass today’s dominating industry. More and more studies show that many companies today prefer Philippines, despite its rationally higher labor cost compared to India. The reason for this is believed to be the higher quality of customer service Philippines offers, compared to its Asian competitors.

Unquestionably, both India and Philippines have their edge over one another. With the competition becoming stiffer, we can expect of more issues arguing which is better. In the long run, it all ends up with these words: May the best country wins.


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