Andrew
Burak
CEO at Relevant

How 2021 looks for Software Development Outsourcing to the Philippines

Outsourcing

The Philippines is one of the fastest-growing economies in Asia. And one of the key drivers behind this growth is the vibrant Business Processing Outsourcing (BPO) sector. 

The software development industry in the Philippines contributes 10% of the country’s GDP among tens of other sectors. And that’s a whopping $26billion! 

Software Development Outsourcing to the Philippines revenue record

At present, there are currently 700 Information Technology BPO-IT companies in the country, providing 1.32 million jobs.

While it’s a fact that the Philippines has a remarkable history in software development outsourcing, is this still true in 2021? 

Should you entrust your software development outsourcing to the Philippines today? Or consider other tech giants like India, Argentina, Poland, or Ukraine?

With this, we will look at why businesses should consider outsourcing software development to the Philippines versus four other leading outsourcing destinations. 

This insightful article takes a detailed approach to explain the Philippines’ current outsourcing landscape. Be sure to check it out before outsourcing web development, or your app development elsewhere. 

Five countries to consider when outsourcing software development projects

Before we dive into the intricacies of outsourcing software development to the Philippines, we’ll start by taking a detour to four countries with some of the best and especially cost-effective developers on the planet.

1. Argentina

Argentina is one of the fast-growing IT hubs on the globe. Credit goes to the country’s strong focus on promoting compulsory computer education into its school system. 

That means all the upcoming generations are groomed in the affairs of IT from a very young age and at every educational level. This inevitably fine-tunes their skill set over the years. 

Besides, the stats shows that 70% of Argentinian students in the university tend to balance work and studies. And most of their part-time jobs are IT-related. 

The upside to offshore outsourcing to Argentina is that the country is still in its early stages, thus, you are rest assured dedicated software development teams with not only vast tech skill sets but also highly reliable and stable.

2. Ukraine

For several factual reasons, Ukraine is one of the best countries to outsource software development in 2021. 

Every institution within this country takes a step or two to further the nation’s software development industry. 

According to GSA, the country is the leading outsourcing destination in Europe. Each year, Ukraine churns out 16000 IT graduates, and currently has over 210 000 workers in the IT industry.

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Even more, software companies offer free educational courses to employees. Thus, if you lack expertise in a particular IT field or language, you can still master the craft in the work environment. 

The goal is to keep up with global trends in the technological industry and keep Ukraine on the world outsourcing map. 

While outsourcing to Ukraine comes with many perks, you will need a reliable partner to help you find the perfect software developers for your project. 

This is where Relevant Software comes into the picture. Our team will certainly smooth your development processes and get you up and running in no time. 

3. India

With a population north of one billion, you certainly can’t find an outsourcing countries’ list without this giant. 

Despite having an overall quite low literacy level, India is an affordable option for companies considering building a team of software engineers offshore without breaking the bank. 

India’s western educational structure gives their IT specialists quite an edge and makes it easier for them to resonate with most European and American businesses. 

While the country might have earned a bad rap over the past few years, now more than ever it’s taking considerable steps to improve this sector and regain its title as one of the best countries to outsource software development.

4. Poland

The benefits of outsourcing to Poland are endless, however, top of the list are Polish IT specialists’ outstanding work ethic and soft skills. These traits are quite rare and make Poland a very attractive outsourcing destination. 

Furthermore, the country also boasts having a remarkable English proficiency which makes it easier to collaborate with western countries. 

There is no doubt that the country is quickly cementing its authority in the software development industry.

5. Philippines

Of course, the list wouldn’t be complete without the Philippines. Outstaffing or outsourcing software development to the Philippines goes beyond the country’s long positive history in IT outsourcing. 

Until today, the Philippines continues to dominate the outsourcing landscape despite its recent troubles with the pandemic. At present, the BPO Outsourcing companies in the Philippines employ more than 2 million people.

According to Deloitte, Philippines has the potential to increase its share of the BPO market up to 20% of the entire global market. This will enable the country to a whopping $50 billion+ in revenue! 

But why do companies prefer to hire developers in the Philippines? What are the benefits? It does take more than impressive statistics. 

Read on to learn how the software development industry in the Philippines manages to maintain its reputable position.

The current state of the Philippines’ IT Ecosystem 

The year 2020 was both unique and challenging for the Philippines BPO industry. 

Not only did the global health crisis test the resilience of Filipino outsourcing firms, it also disrupted plans and forecasts for the country’s BPO industry’s projected exponential growth.

The misery of COVID-19 left most small and medium-sized enterprises in need of cash flow. While some have battled to survive, others seized the challenge of riding on the pandemic’s wave and make the most of it. 

On the other hand, larger enterprises with larger financial buffers also saw a dramatic decrease in sales. This is particularly true for travel, hospitality, and tourism businesses. 

The decrease in demand directly impacts the Philippine BPO business, and notably, some customers have taken out their accounts, leaving staff adrift.

Despite the challenges related to the pandemic, the prospects of the IT-BPM sector are still optimistic. The recent IBPAP survey has shown that 87% of IT-BPM firms in the Philippines are expecting to see between 5 and 15% growth in 2021.

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So, why outsource to the Philippines? 

We will break these down in a bit.

First and foremost, the IT outsourcing companies in the Philippines offer state-of-the-art facilities, highly qualified personnel, strong links to western culture, almost 100% English usage, and affordable labor costs without compromising on quality. 

8 Reasons to outsource your next development project to the Philippines

The Philippines is a popular destination for BPO due to its outstanding ability to not only maintain a positive reputation over the years but get better each year. 

Here are 8 reasons why international businesses would want to build dedicated software development teams in the Philippines.

  • Cost-effectiveness
    Hiring a Filipino data specialist isn’t just affordable but also cost-effective. What this means is that despite reasonable prices, companies also get quality services. 
    This translates into a higher return on investment when compared to outsourcing to expensive specialists from other countries with similar quality. 
  • English-speaking country
    Considering one-third of the world’s population converses in the English language, the lack of the English language has always posed a barrier to some great outsourcing destinations like China. 
    Fortunately, this is not the case with Filipinos. They have a good understanding of the English language and a neutral accent. The latter makes it easier for western companies to train them in a particular accent. 
    That means, in the Philippines, you won’t only find cost-effective talents to work with but individuals with good communication and soft skills to easily blend with your in-house team.
  • International compatibility 
    Not only their communication skills are the reason to consider outsourcing to the Philippines. 
    Having a historic multicultural foundation puts Filipinos in a position where they resonate with diverse cultures. 
    At one time or the other, Portugal, Spain, the United States, and Japan colonizes this country. 
    Hence, Filipinos are pretty open-minded and open to multiple values and perceptions. This is a plus for international business in terms of adaptability.
  • Large talent pool 
    With over 200,000 software specialists, the Philippines has a vast pool of IT talent for enterprises to pick from. This is one of the major software outsourcing challenges western companies often face when hiring programmers or any other IT talent. 
    More than that, the nation’s wide pool of talents consisting of varying age ranges makes IT outsourcing to the Philippines quite simple. All the same, keep in mind that 
    Working with a computer programming company in the Philippines is generally better compared to hiring individual developers.
  • Easy accessibility
    With a long list of outsourcing companies in the Philippines, finding Filipino talent is no rocket science. These companies serve as the middlemen, connecting business organizations to the right data experts. 
    Since they extensively understand the talent market as well as IT projects, they can effectively use this knowledge to help you find the perfect match for your vacancy. 
  • Dedicated talents
    Besides easy accessibility, developers in major cities such as Manila, Cebu, and Davao have a significantly strong work ethic and outstanding soft skills. 
    These individuals understand the need for dedication in the global labor market, are loyal, and uphold professionalism. 
    Also, they strive to be accountable, knowing how competitive design outsourcing or software outsourcing to the Philippines and other parts of the world can be.
  • Supportive government 
    As we have previously established, the BPO industry in the Philippines is a strong economic pillar. 
    This means that the Philippines government greatly values the outsourcing landscape and provides several friendly initiatives to make collaboration with IT talent much easier. 
    This includes partnerships with universities to create specific BPO-IT curricula. Furthermore, the government recently established a TESDA (Technical Education and Competencies Development Authority) that helps fund call center training. 
    Most importantly, the Philippines government offers tax incentives, SOPs to support foreign investment, a unique voucher system, and has a dedicated National ICT Council.
  • Time zones adaptability
    What about time zones? Time zones can make outsourcing or outstaffing a problem for most enterprises. 
    But here comes the sweetener, Filipinos are highly flexible individuals open to working night and morning shifts. That means companies looking to outsource in the country should by no means worry about the time difference. 
Top reasons for software development Outsourcing to the Philippines

The Philippines vs. Ukraine: Which one is best for your outsourcing development project?

Yes, software outsourcing to the Philippines comes with a plethora of benefits. However, there is a rising strong contender — Ukraine. 

For decades, a wide range of US and UK companies have viewed Asia as attractive IT outsourcing destinations, but lately Eastern Europe has been gaining the spotlight. 

Ukraine is one of Eastern Europe’s most popular IT outsourcing countries with more than 210 000 specialists as of today. 

On the same note, the Philippines is one of Asia’s most attractive offshoring destinations, with 200,000 IT specialists as well.

We analyzed the IT services in Ukraine and the Philippines to help you make the ultimate and informed choice.

IT Industry in Ukraine

Ukraine boasts more than 1,600 IT outsourcing companies and over 200 100 IT experts. Currently, outsourcing web development to Ukraine is at the highest peak. 

This is owed to the county’s strong educational background and a solid technical heritage. The country is the leading Central and Eastern European country by the number of graduates who join the labor market. 

Each year, more than 16,000 ICT students graduate from higher educational institutions in Ukraine. More than 23,000 experts graduate with STEM-based degrees annually. 

Overall, about 80% of Ukrainian developers have an English level for conversation and an excellent technological vocabulary. 

To further improve English proficiency, most companies in Ukraine provide their employees with English language courses. 

As a result of the rapid development of the outsourcing industry, Ukraine was named by Offshoring Destination of the Year by the Global Sourcing Association (GSA). 

Furthermore, Ukraine was included in the recent Gartner’s Top 30 offshoring and outsourcing destinations

IT Outsourcing in the Philippines

The Philippines is one of Asia’s most pivotal IT outsourcing destinations and software development in the Philippines comes with many benefits for international companies.

According to the data supplied by PSIA (Philippine Software Industry Association), about 190,000 developers live in the country, and by 2022 the number is expected to rise to 210,000. 

Currently, the value of the Philippine software industry is $3.2B and is expected to grow to $5B by 2021. All of these are more signs that confirm the dominance of IT outsourcing in the Philippines. 

And besides technical proficiency, we know that the majority of the Philippine population is fluent in English. 

This is undeniably one of the distinguishing advantages of software development outsourcing to the Philippines.

According to 7N Executive Brief Outsourcing, the Philippines is one of the top 3 locations for offshoring due to a number of reasons. 

An excellent cultural match, a high English literacy rate, and a steady pool of candidates are the factors that make the country a very attractive outsourcing destination, the report states.

software development outsourcing to the Philippines facts
Source: 7N Executive Brief Outsourcing 2020

Over to you

We have reviewed several quality destinations for IT outsourcing in 2021. However, keep in mind that knowledge of these destinations could mean nothing if not applied wisely. 

Just as there are advantages, we also have several disadvantages of outsourcing in the Philippines. But how can foreign businesses tell these apart with little or no knowledge of the country? 

The best approach is working with the right technology partner. These ventures have complete knowledge of the talents within the country compared to a foreigner – in this context, the hiring enterprises. 

Using outsourcing vendors is an excellent way to handpick a firm that perfectly matches your project objectives. 

The entities have expert knowledge on how to outsource software development to the Philippines or Ukraine and are well-equipped with the right resources and connections to simplify the process. 

Relevant Software is one such entity with extensive experience in implementing the most challenging outsourcing tasks. 

And this is factual, check out some of their recent outstanding projects. If you need experienced IT specialists or a skilled, dedicated team within a short space of time, contact us!

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Tags: outsourcing
Written by
Andrew Burak
CEO at Relevant
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