In the global Information Technology market, the Philippines are hard to ignore. The top IT school in the country, AMA University, can claim credit for this as it has been producing top quality IT professionals for years who have been filling thousands of jobs, not only in the Philippines itself, but around the world. According to Export, the number of IT jobs in the Philippines in 2014 was 1,712,635. This year, that number is expected to grow to 2,170,739. These jobs include web developers, programmers, project managers, service delivery experts, CCNA and much more. In 2016, the number of companies with open IT vacancies was over 20K. In the previous year, it was 10K. This shows that the need for IT professionals in the Philippines continues to grow yearly. IT events and conferences also continue to increase yearly. These events include educational courses, IT training, startup launches and technology conferences. In 2015 there was an average of 150 monthly events, by 2016 this had increased to over 300.The IT industry is a major contributor to the country’s economy, largely through the popularity of services offshored from other countries.
So how does offshoring work within the IT industry in the Philippines?
Start with a Dedicated Team Model
What is a dedicated team model? A dedicated team model is where an offshoring provider and their client have a mutual agreement with regards to a project’s workload, key performance indicators, metrics and any other requirements for a certain program specified within their contract. The offshoring provider must provide IT professionals who suit their client’s needs and demands and concentrate only on the projects assigned to them. With this dedicated team model the client has full management control over their project while the offshoring provider handles functions such as recruitment, hiring, HR, training and development, technology, operations and support. A dedicated team will have a monthly pricing scheme paid to the offshoring provider as a lump sum. This cost will be calculated based on the number of team members, monthly salaries, provider’s fee, technology, and any other fees which comprise the project’s expenses.
A model such as this is perfect for long-term projects or when the client’s team does not have the experience, skills or expertise needed to complete a project. The goal of having a dedicated team is to work seamlessly with the client whilst providing high-quality service and project-specific solutions.
- Client outlines project and specifies number of employees along with required skill sets.
- Offshoring provider finds potential employees with required skills and experience.
- Upon hiring, employees are trained and assembled into a team to start work during specified work hours.
The main advantage of this system is that the team is dedicated to a specific task and until this task is completed they are not distracted by any other work commitments. In this way, goals are achieved faster and with better results than if a team has several projects to finish at once. Team members are considered to be the client’s employees and so accordingly they adhere to the policies, methodologies, culture and management style set by the client. They share the company’s vision and mission.
When should a company consider an offshored team?
Due to stiff global competition and in an attempt to level the playing field, many companies are considering offshoring to the Philippines.
Below are some of the top reasons why:
- It’s hard to find strong technical resources that are also tech and strategic savvy elsewhere (India, China, Ukraine, etc.)
- The salary of employees is lower than in the EU, Australia, New Zealand or USA
- High level of education and English proficiency
When not to consider offshoring:
There are occasions when this business model is not appropriate, such as:
- Short-term projects
- Time-sensitive projects. Hiring and training employees can take weeks or even months
- Team management can also be a hassle unless the client chooses to hire the offshoring service provider’s project manager
While there are many other countries known for offshored IT services, such as Ukraine, Brazil, China, India, Bulgaria Mexico, South Africa, Morocco, Egypt, and many more, many companies are still choosing to offshore to the Philippines. Why? The Philippines offers hardworking, qualified professionals with excellent communication skills and a high level of English proficiency. The country is 1 hour ahead of most Asian countries and 7 hours ahead of most European countries. This offers more opportunities for shared working hours than other countries. The Philippines is also a convenient location for nearshoring, allowing smooth communication and business workflow between remote teams. Compared to the Ukraine, Poland and the Czech Republic, the Philippines offers better offshoring rates paired with a much bigger pool of IT experts. Considering all of this, it really is no wonder that the country has gained enough traction and attention from clients across the globe to become one of the top IT offshored service providers in the world.