The London School of Economics (LSE) recently conducted research among 30 global sourcing analysts using 20 factors under six major categories to assess 10 countries’ “attractiveness” as BPO locations for work outsourced from the UK. The 10 countries identified were the Philippines, India, South Africa, Poland, Morocco, Malaysia, Kenya, Sri Lanka, Egypt and Northern Ireland. The major categories and summaries of the findings for each follows (with emphasis on the Philippines’ standing in each):
Cost (including labor, infrastructure, taxes and incentives). India, the Philippines, Malaysia, and Egypt have the most attractive operating costs when using direct operating cost per full-time employee (FTE). The Philippines also has a comparatively low infrastructure cost (eg. telecommunications, internet and power), partly due to low bandwidth costs driven down by deregulation. For overall costs, India is still the most “attractive” country, followed by Kenya, Philippines, South Africa and Egypt.
Skills (including skills pool and provider landscape). The study echoes what other reports have said before: the Philippines has been the global call center destination since overtaking India in 2011. This is because over 80% of the Philippines’ outsourcing work is in voice services. The Philippines is looking to address its skills shortage, especially because it wants to capture a bigger market of the higher value non-voice BPO services. Mature locations such as India, the Philippines and Sri Linka are beset by shortages of middle management and team leadership skills. Still, in general, India and the Philippines have the highest levels of available skills.
Environment (including government, business, quality of life and accessibility). The governments of all 10 countries have various support structures to attract foreign direct investment (FDI). India and the Philippines benefit from having highly engaged intermediary agencies to further support the countries’ outsourcing industries. These are Nasscom in India and the Information Technology and Business Process Association of the Philippines (IBPAP). In terms of overall environment, South Africa scores highest, followed by Northern Ireland, Malaysia, then India and the Philippines.
Quality of infrastructure (including ICT, real estate, transport and power). In this category, the Philippines is notable for having very good telecoms and low real estate costs. However for the overall ranking, Poland and Northern Ireland gets top rank, followed by Malaysia, South Africa, India and the Philippines.
Risk (including security, disruptive events, macro-economics, regulations and intellectual property). All 10 countries are seen as meeting minimum requirements in this category. India, the Philippines and Northern Ireland get the highest ratings in macro-economic risk.
Market potential (including local markets and nearby markets). India is ranked at the top in the captive and offshoring market, followed by the Philippines. Both these countries are competitive and participate in a wider scale and broader range of services, while the other eight countries focus on niche markets.
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