Introduction
 
Mainstream adoption of offshore call center outsourcing beckons. India continues to dominate the landscape but the Philippines threatens to poach some activity as its own market grows in strength. Almost quarter of a million new agent positions will be added in India & Philippines through 2009. The report explains why and provides strategic recommendations on how to succeed in the two markets.
 

 
Scope
 
Comprehensive forecasts for offshore outsourced, offshore in-house (captive) and domestic agent positions in India & the Philippines through 2009.
 
Breakdown of markets being served, processes being outsourced and vertical splits compared across both countries.
 
Analysis of the business drivers that will affect demand for outsourcing in each market, along with discussion of any obstacles to future success.
 
Actionable strategic recommendations for service providers to help grow revenues in these expanding markets and ride a new wave of outsourcing.
 
Highlights
 
Datamonitor forecasts that mainstream adoption of offshoring from the USA and UK lies just around the corner, which means the call center markets of India and the Philippines are set to see further expansion through 2009.
 

 
Datamonitor believes the balance between offshore in-house (captive) operations and offshore outsourced operations will tend to move in favor of the outsourcers over the next few years as firms that have locked in the value for their shareholders by moving offshore seek to further leverage the labor arbitrage argument.
 

 
As business process outsourcing becomes ever-more prolific, so the complexity of the work being undertaken by third parties evolves. Outsourcing providers are competing to run entire customer processes for their clients, rather than merely the voice-based call center part. There is a move towards transformational outsourcing amongst leading firms.
 

 
Reasons to Purchase
 
Understand why the number of offshore outsourced agent positions (APs) threaten to surpass offshore in-house (captive) seats in the next few years.
 
Learn how offshore call center markets in third world countries tend to mature and understand how to prepare your business for success.
 
Obtain Datamonitor's latest and most comprehensive market studies on the world's two most important offshore markets.
 

TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 2
 
Introduction 2
 
Indian market update 2
 
Philippines market update 3
 
Offshore is maturing 4
 
Action points 5
 
CHAPTER 2 INTRODUCTION 12
 
Mainstream adoption of offshore beckons 12
 
CHAPTER 3 INDIAN MARKET UPDATE 15
 
Background 15
 
Drivers for offshoring to India 16
 
Labor arbitrage 16
 
Established call center market 18
 
Quality assurance and security 18
 
The labor pool 20
 
Obstacles to offshoring to India 20
 
Staff attrition 20
 
Public backlash in target markets 22
 
Distance from target markets 23
 
Middle management capabilities still an issue 24
 
Indian call center market forecasts 24
 
Definitions 24
 
Comprehensive market view 25
 
Offshore outsourcing in depth 26
 
Competitive landscape – the OSPs’ view 30
 
Outlook 31
 
CHAPTER 4 PHILIPPINES MARKET UPDATE 33
 
Background 33
 
Drivers for offshoring to the Philippines 35
 
Diversifying offshore portfolios 35
 
Large number of OSPs and MNCs already there 36
 
US military legacy and cultural affinity 36
 
Superior literacy rate 37
 
In-region language capabilities 38
 
Governmental support for the industry 38
 
Obstacles to offshoring to the Philippines 39
 
Limited real-estate and suitable locations 39
 
Political tension and environmental risks 40
 
Higher labor costs than in India 41
 
Long way away – again 42
 
Competitor to India? 42
 
The Philippines call center market forecasts 44
 
Comprehensive market view 44
 
Offshore outsourcing in depth 46
 
Competitive landscape – the OSPs’ view 51
 
Outlook 52
 
CHAPTER 5 OFFSHORE IS MATURING 53
 
Introduction 53
 
The offshore call center maturity model 54
 
Market consolidation in India 55
 
Moving beyond Tier 1 locations 57
 
Introduction 57
 
Definitions 57
 
Location Lists 58
 
Increasing seat utilization 59
 
Moving up the value chain 61
 
Vertical market developments 62
 
Quality control 63
 
Multisourcing and global delivery frameworks 65
 
Moving to new markets 65
 
Global delivery 65
 
Diversifying risk profiles 66
 
Final thought 66
 
CHAPTER 6 ACTION POINTS 67
 
Address agent attrition and the customer experience 67
 
Increase utilization of offshore resources 67
 
Establish a global delivery framework 68
 
Move towards transformational outsourcing 69
 
CHAPTER 7 APPENDIX 70
 
Research methodology 70
 
Further reading 70
 
SPP writing team 71
 
Report author 71
 
Report manager 71
 
How to contact experts in your industry 71
 

 

 
LIST OF TABLES
 
Table 1: Price per hour of Indian outsourced agents, 2004 17
 
Table 2: Distance from US & UK to Mumbai (Bombay), India 23
 
Table 3: Agent positions in India, 2004 – 2009 25
 
Table 4: Offshore outsourced APs and growth rates – India, 2004 – 2009 27
 
Table 5: Offshore outsourced call centers and growth rates – India, 2004 – 2009 28
 
Table 6: Population literacy rates in the Philippines and India 37
 
Table 7: Distance from US & UK to Manila, the Philippines 42
 
Table 8: Agent positions in the Philippines, 2004 – 2009 46
 
Table 9: Offshore outsourced APs and growth rates – the Philippines, 2004 – 2009 47
 
Table 10: Offshore outsourced call centers and growth rates – the Philippines, 2004 – 2009 48
 
Table 11: Offshore call center maturity model in 3rd world markets 55
 
Table 12: Tier 1 call center and BPO locations in India 58
 
Table 13: Tier 2 call center and BPO locations in India 58
 
Table 14: Tier 1 call center and BPO locations in the Philippines 59
 
Table 15: Tier 2 call center and BPO locations in the Philippines 59
 

 

 
LIST OF FIGURES
 
Figure 1: Comparison of offshore outsourcing process work in India and the Philippines 3
 
Figure 2: Map of India 15
 
Figure 3: Agent positions in India, 2004 – 2009 26
 
Figure 4: Offshore outsourced APs and growth rates – India, 2004 – 2009 27
 
Figure 5: Demand for offshore outsourcing in India, 2004 29
 
Figure 6: Split of India’s offshore outsourced APs by activity, 2004 30
 
Figure 7: Respondents’ most frequent competitors, India 2004 31
 
Figure 8: Map of the Philippines 34
 
Figure 9: Cities in the Metro Manila area 40
 
Figure 10: Comparison of offshore outsourcing process work in India and the Philippines 43
 
Figure 11: Agent positions in the Philippines, 2004 – 2009 45
 
Figure 12: Offshore outsourced APs and growth rates – the Philippines, 2004 – 2009 47
 
Figure 13: Demand for offshore outsourcing in the Philippines, 2004 49
 
Figure 14: Split of the Philippines’ offshore outsourced APs by activity, 2004 50
 
Figure 15: Respondents’ most frequent competitors, the Philippines, 2004 51
 
Figure 16: Most cited obstacles to offshore outsourcing 53
 
Figure 17: Indian and Filipino outsourced APs by vertical, 2004 63