Outsourcing or Global Outsourcing ?

Outsourcing or Global Outsourcing ?

Outsourcing is a process of offshoring an organization’s non-core activities or business processes to a specialized service provider.

Global outsourcing versus outsourcing.

Is there really a difference? That depends. The answer is not a simple ‘yes’ or ‘no’. Outsourcing is defined as “a business practice in which a company hires a third-party to perform tasks, handle operations or provide services for the company” that would otherwise be performed in-house. This could mean you could outsource a task, job role or entire team to a business down the road or you could outsource to a third party on the other side of the country.

Global outsourcing is a term reserved for outsourcing to a third party based outside of your country and is often commonly referred to as offshoring.

Facts and figures concerning global outsourcing:

  • Around 300,000 jobs are outsourced by the US annually.
  • The top reason for outsourcing (70%) is cost reduction.
  • The total IT budget in 2020 grew from 12.7% in 2019 to 13.6%.
  • 58.8% of US marketers saw no covid-related changes in the outsourcing marketing activities.
  •  Larger companies are 66% more likely to outsource than small businesses.
  • 36% of workers in the US are part of the “gig economy.”
  • The global outsourcing market was worth $92.5 billion in 2019.
  • By 2025, the global IT outsourcing market will be worth $397.6 billion.
  • 24% of small businesses outsource to increase the efficiency of their business.

What is the most outsourced department Globally?

Well, it is the accounting and finance department that aces the game.

68% of US companies outsource to low-cost countries. The most outsourced services are accounting, which accounts for 37% of the outsourced services followed by IT service, digital marketing, development, human resources, and customer support.

Among these stands India with the highest numbers as the outsourced country.

Why India??

India is the leading accounting and IT outsourcing country in the world. There are many reasons why India is a hub for outsourcing, For example, India has no communication barriers since it’s one of the largest English-speaking countries. Furthermore, outsourcing is far cheaper compared to other developed countries.

In the same fashion, Indian outsourcing industry statistics imply that by 2023/2024, the country will have the highest number of software developers. India might even overtake the US in this matter.

While India leads in terms of the Accounts and IT sector, there is another country that gives tough competition in the outsourcing world and that is the Philippines.

India versus the Philippines!

India leads the race, and it’s hard to put it down easily as it has a 484 million employable population between the age of 25 and 54, as compared to 38 million in the Philippines, in the same age group. Thus it can offer better cost-effectiveness.

But In recent times, India has almost lost 10% of its global share in the BPO or voice support jobs and the Philippines has caught up with the pace.

Why? The major reason is the language. Even though the workforce in India has the primary language as English, the accent is much more precise and favourable to the Filipinos making them accent neutral. The Philippines employs 1.2 million in the KPO industry.

Moreover, the richness of the Indian culture is instilled within Indians can prove to be a challenge when dealing with clients. Unlike the Philippines where historically there is a huge American influence. This consequently makes it easier for Filipinos to engage and maintain relationships with their American clients.

Although India gives tough competition with their cost-effectiveness. Ana average customer relationship executives look at earning 3800-4500 USD in the Philippines but in India, it is 3200 USD max.

It also leads the accounts, Tech and IT sectors with a brilliant workforce.

The topic remains debatable under an nth number of factors though.

The following comparison shows how voice-based outsourcing providers weigh India and the Philippines as outsourcing destinations for voice-based services.

Philippines India
The Philippines has sure exceeded in delivering voice-based services. It is estimated that around 70% of incremental Call Center and voice business in India will also be lost to foreign competitors especially in the Philippines as per ASSOCHAM (The Associated Chambers of Commerce of India). Looking at the current day support trend, outsourcing is no longer limited to voice-based support, and other channels like chat, social media, technical support, etc., have grown immensely. This gives India a huge advantage to bounce back in the game.


Outsourcing or Global outsourcing, Whether they be budding startups or large corporations, the target goals are the same — cutting costs, working on core business functions, getting expert help, and so on on the outsourced country, it is an opportunity for millions of individuals, rest all remains subjective person to person.




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