outsourcing to Asia Pacific? It’s not the same anymore

Did someone say their job was ‘Bangalored’ once? Well, now you may not be able to say that as offshoring has taken a new meaning with unexpected countries across Asia Pacific supporting the world. Traditional heavyweights such as India have evolved from making voice calls to the US and UK, to matured IT processes and managing complex consulting projects. On the other hand, South Africa and Malaysia have surprised the world as the dark horse of offshoring.  With choices comes evaluation and one needs to now understand the Asia Pacific market better than before to know which countries are best suited to support their outsourced business?

the evolving landscape

While we have read reports of certain companies pulling processes back to home countries, let’s face the reality – outsourcing offers a strong value proposition around people, processes and tools, helping businesses to reduce their costs while taking advantage of skilled-labor to enhance their product or service offerings. And now, adaptation to cultural sensitivities is taking place which is the precise reason multiple countries are part of this new movement.  Asia-Pacific remains at the heart of this phenomenon, with eight of the world’s top ten outsourcing countries located here.

new outsourcing jewels in Asia Pacific

Let’s take a look at some of the top countries and what are they well positioned to deliver.

• China has committed itself to becoming an outsourcing heavyweight, investing $1 billion into its own outsourcing sector, with a focus on providing Business Process Outsourcing (BPO) services for both domestic companies and multinational corporations (Chinese and foreign). This investment has helped drive Chinese destinations forward, with Shanghai, Beijing, Shenzhen and Dalian all now sitting between 10^th and 15^th in the 2013 outsourcing rankings.

While many may be surprised, China invests in extensive training of languages to make the country more a more attractive option to western multinationals.

• The Philippines retains two destinations in the world top ten, but continues to be at the relatively ‘low end’ of the BPO value chain. Its core strengths of spoken English and a cultural affinity to the US help to keep its BPO business in good health.  

• Malaysia is pleasant surprise in the growing outsourcing economy of Asia Pacific.  With its rich blend of different cultures and languages, fluency in Arabic, high level of skills, relatively low attrition rate, Malaysia is already targeting the high end of the outsourcing value chain.

work in progress

As with any country, the infrastructure maturity of each of these countries is a work in progress. For example,  Malaysia is still setting up its telecoms infrastructure which will help the country propel further on the global BPO stage. The country has recently invested in its ICT infrastructure, though operators such as Telekom Malaysia are enhancing cloud infrastructure throughout the country. Connecting tier 2 -3  locations remains a priority for most BPO destinations, for obvious cost considerations. In the Philippines, telecom operator PLDT continues to expand its fiber network to help support the ongoing expansion of its contact center and outsourcing business. In the age of high bandwidth applications, the availability of robust, reliable data networks in Asia-Pacific nations will give BPO and contact center companies a big boost.

what's next?

So, for western multinationals looking to establish BPO operations in Asia Pacific, where ultimately do you turn? It is really about your priorities. The usual pre-requisites apply, with labor costs, telecoms infrastructure, political stability of the host country, attrition rates and so on – but now many ‘rest of the world’ nations are also considering cultural affinity with other countries while targeting outsourcing business. After all, it makes good business sense to have contact center staff with similar values, culture and ideally language.

Haytham

This post was is also available in French here.

image © Jakub Jirsák - Fotolia.com