Philippines trumps India for BPO business, TCS opens center

Earlier this week I came across a story that TCS was opening a BPO center in Philippines, I read through it and didn’t pay much attention. Later today I saw a story which claimed that Philippines was fast becoming a outsourcing hub. US customers calling for help would soon have their calls directed to Philippines. This explained the decision by TCS to start operations there.

IBM named Philippines as the most sought after destination, beating India. The rapid BPO industry growth in India has seen an increase in cost which is being cited as one of the reasons when compared to Philippines. The IBM report claims, Philippines offers a similar environment. These observations come from the Global Locations Trend report from IBM who have opened three facilities in Philippines.

IBM’s centers will be offering HR, customer relations, finance and administration for sectors like entertainment, consumer technology and telecommunications. TCS’s move seems to be a strategic decision realizing the growing potential in the country. A TCS spokeswoman said that their facility will be used for non-voice BPO services.

India’s current outsourcing revenue is pegged at $70 Billion while Philippines is at $9 Billion. A roadmap from the Business Processing Association expects this number could be $25 Billion by 2016. Three years ago, Wipro setup a center in Philippines which now has close to 2,000 employees. Clearly there is momentum for the country that has English language part of their school curriculum.

It disappoints me that India hasn’t been able expand BPO facilities deeper into the country. If the government goons would give up on their regional agenda for votes and work with NGOs to improve spoken English skills, we might be able to improvise on our dominance and uplift other sections of society.

The IBM Global Location Trends 2010 report (PDF link)