Small to medium-sized businesses abroad that have outsource to the Philippines are now reaping the benefits of their partnership with Philippine-based outsourcing firms. Australian and United States companies who’ve already done outsourcing will more than agree that they’re able to save more than triple how much they’ll otherwise pay for a full-time local professional. Here is a beginner’s guide to anyone interested about getting it right the first time they outsource to the Philippines.

Growth of Philippine Outsourcing Industry

Cost-effective rate and English language proficiency are two main driving forces behind the success story that is the Philippine BPO sector. It was a miracle that the Philippines finally outsmart India with the latter’s huge population that outsourcing firms can tap in India. Compared to the 484 million Indians aged 25 to 54 who can work in the BPO sector, the Philippines only have 38 million in the same age range.

With all factors in, the Philippines has blazed fast in the top outsourcing ranking per country while India has shed 10 percent of its share in the global, outsourced voice-based farmed-out tasks. According tot he Information Technology and Business Process Association of the Philippines, more than 776,794 people are employed in the IT and BPO industry last 2012, which reflects 21 percent growth from 2011.

Why Outsource to the Philippines?

So comes the next inevitable question: Why Outsource to the Philippines? So, here are the most compelling benefits small businesses can get out of outsourcing.

• The call centre capital of the world and a global leader in voice-related BPO
• Second most-preferred destination for non-voice IT-BPO services
• Low infrastructure and labor costs (less than 80% than in developed nations)
• Large pool of college-educated professionals
• Large population of good English language proficient speakers and writers
• Young population and he fastest growing workforces in the world
• Large and developed Central Business Districts (Makati, Taguig, Davao and Cebu) that are ideal for BPOs
• Strong support from the academe and government
• Filipinos are generally genial, hardworking, hospitable and resilient
• Filipinos are exposed to Western and Eastern culture and these make them very conversant about Western lifestyle and culture.

How Outsourcing Helps Small Businesses?

There are plenty of reasons why outsourcing is an effective and strategic business model for small businesses. If you are understaffed and tight with budget, hiring a local consultant or professional to perform even back-office and administrative tasks is expensive.

There are also so many setups and arrangements that you need to address, drastically dividing your time for the more important businesses processes and functions like marketing and developing your products.

In other words, there are so many of these benefits that you can derive out of outsourcing your business processes, including:

• Freeing up your schedule
• Lowering your operating cost-effective
• Multiplying your productivity

When you outsource to the Philippines, you will not be overwhelmed by doing everything by yourself because a remote virtual assistant or bookkeeper can work for you on a full-time or temporary basis.

These virtual workers can do the stuff that you need to get done at a fraction of cost that you would otherwise spend for a local hires, plus you get the same or more level of productivity that you expect. Part of the reason why this is so when you outsource to an offshore firm in the Central Business Districts of Manila, Makati, Cebu or Davao in the Philippines, is the availability of highly-skilled and competitive workforce.

Given this reality, small businesses should look into this business model and start leveraging outsourcing to the Philippines for innovation, access to high-value talent and cheaper labor cost. This was unavailable in the past and small businesses should take advantage.

Getting Started to Outsourcing in the Philippines

First of all, there are no short cut or magical rules to getting it right the first time you outsource. But you can get nearer to how the successful companies have done it and how they made outsourcing to the Philippines work for them.

1. Conduct your own research.

It always start with doing a careful research of your market, your competitors, and the outsourcing industry in general. Understand the market landscape, spot the risks and threats but not being unmindful of the opportunities that outsourcing can offer your small business. It will help you get to the ideal options and to the prospective offshoring companies before you finally choose the best one.

2. Identify the business functions or processes that you would like to outsource.

Classify the tasks into your core and non-core business competencies. Are you going to outsource just your enterprise’s minor or non-core functions or you want all manufacturing aspects of your business outsourced? You have to have a clear picture and idea what you want to outsource.

3. Make a description of the business process you want outsourced.

The description should be detailed to help in deciding about which of these tasks are better off outsourced and retained internally. The description of the responsibilities will also guide your outsourcing partner to combed through prospective applicants to best meet your qualifications and requirements for the job. For budgetary reasons, your description will determine whether you will pay for a beginner or a senior web programmer or developer.

4. Identify specific tools or software you will need.

Making a list of tools, equipments and softwares that you will use for the performance of the tasks and responsibilities of your staff will save you a lot of time and money. It is true that the vendor knows exactly that your main reason for outsourcing is to save on cost so the amount you pay for your staff often include the calculation for the use of equipments and softwares. Some softwares, however, are not yet included so it is either you will be billed for this or you will send the vendor your own software.

5. Make a list of just how many staff you will need to perform a project or tasks.

Again, you should not be the last person to know that you will need another staff to perform a critical business process that will be costly at your end if you simply hire a whole team than pay for one staff each to build a team of your virtual workers.

6. Have a rough and realistic estimation of time it will take to complete a job.

Outsourcing gives you the flexibility to manage your people and their tasks. It also allows you to hire on a temporary basis or on a per project basis. By knowing these things, it will be cost-effective to come up with your estimated project completion time to allocate budget and staff properly. Then once you get to the heart of this aspect, select a start date for the outsourcing transactions, from contract signing to the sign off of the project.

7. Know right away your outsourcing budget.

As much as possible, the monthly budget must be set realistically set in order for you to track your investment, measure the return on investment of outsourcing to a Philippine firm, and more.

8. Request a Quote.

Once you are done with all these preliminary inputs, you can now start sending a request for quote to your prospective outsourcing firm in the Philippines with this information regarding your requirements.

Now it looks like you are ready to outsource to the Philippines. Just remember, outsourcing has its pros and cons. But don’t quickly jump to the conclusion about anything bad or negative you read or heard about this business model. Make your own investigation, test your prospective outsourcing providers about their ability to meet your requirements, and then seek for recommendations and testimonials about their processes and approaches to work. Now, with all insights in, we’re sure you’ll view about outsourcing will simply change and decide in favour of this strategy.