When It's OK To Be Second

Despite the challenge of a tight labor market, the Philippines came out second only to India, this according to a Global Services and Tholons’ study of the Top 5 Offshore Nations for 2009. That’s nothing to sneeze at. India had a head start of ten years. The size of their labor force is boosted as well by their 1 billion-strong population compared to the Philippines’ 92.2 million. That’s a staggering difference and a challenge that the Philippines can overcome only through partnering with other outsourcing nations, such as India.

To be top five means you’re one among those having “the strongest value propositions to clients” and that you’re considered as a prime location for specific outsourced processes. To be ranked second among those that have met such criteria is big honor. India does acknowledge that the Philippines is a major player in the outsourcing game. India has also been setting up presence in the Philippines as a matter of fact, having the Philippines handle contact services for India’s offshore clients. The two countries have actually become friendly with each other. India’s NASSCOM (National Association of Software Services Companies) and the Philippines’ BPAP (Business Processing Association of Philippines) have in fact signed an MoU over Telepresence forging an alliance not only to combat protectionism but also to explore ways and mean how they can benefit and grow through the partnership.

Outsourcing experts in the country and global observers warn and advise that for the Philippines to continue on this path of growth even with the partnership, we actually have to up our game by going up the value chain through more cutthroat technology (India’s other edge) and development and upgrading of skills set as what we’re known for–our English language contact-center services– can only take us so far.

A lot of outsourcing companies have heeded the advice by taking on tasks that are more complicated than back-office, more knowledge-based offerings. Open Access Marketing now has web building, web content support, graphic design and even writing. The Philippines also has online graphic studios. Accenture Philippines has been doing knowledge process outsourcing for some time now. That is not only the right tack to take but a very necessary strategy because on the heels of the Top 2 are the very rapidly growing China (third), Ireland (fourth) and Brazil (fifth). It doesn’t end there. On the heels of the Top 5 Offshore Nations are the Next 5 Offshore Nations– the emerged and the emerging, respectively.

Being second, first, fourth may not be the whole point and one might argue that it doesn’t matter as much as hitting goals. The eagle-eyed Business Processing Association of the Philippines says our goal is a revenue of between $11billion and $13billion end of year 2011. In terms of jobholders, that’s between 600,000 and 900,000 positions filled. If by the end of 2009, we do hit the 23% revenue growth we’re aiming for, then there is a very good chance we’re hitting 2011’s target as well. Too early to say but the Philippines does have a record of constant growth.

Is the Philippines aiming for first place? Why not but realistically it’s not going to happen very soon with all the inhibiting factors. But we sure should hold on tight to second place. Top ranking gives one a brand, a position. It’s not merely icing on the cake. Let’s face it, more often than not, it pays to be first. Or at least second.