The outsourcing IT services market has long been driven by cost savings. It’s hardly rocket science to say that if your salary costs are lower than those of your rivals, then you’re in a great position to boot out their bids, win deals and grow faster. You can also make a decent margin on work that high salary-based competitors cannot contemplate.
’Our business benefits from significant productivity gains vs. hiring in-country.’’ – Russell Khan, Head of People and Culture, OneStop (Yempo client)
In 2024 salary savings from outsourcing IT to the Philippines are 50-70% vs. Australia salary costs. Example: these figures relate to hiring an Application Support Analyst in Australia vs. with Yempo. The business case is compelling. Or is it?
Buyers require IT outsourcing partners to deliver more cost savings.
We asked a dozen of Yempo’s IT outsourcing, Philippines, clients to share what they’ve gained by adding offshore IT talent to their teams. Curiously, only two interviewees mentioned cost savings even though we know these drive the market. They want more. Far more. These are competitive advantages that they demand (direct quotes from Yempo’s IT outsourcing clients):
1. Fill in-country IT talent gaps that competitors also struggle to plug.
’ Better skills than we can hire locally”
“More flexible, multi-skilled talent than we can hire from India.’’
‘’ A necessary response to the shortage of quality, Australian labour.’’
‘’We wanted to find local staff but couldn’t.’’
‘’Yempo gives us the senior IT expertise that other outsourcers cannot provide.’’
2. Free business leaders’ time to focus on higher-value activities.
‘’ As a business leader, my time is short. Yempo’s end-to-end process is efficient and effective.’’
‘’As a small business, we can’t afford high churn rates. People like working for Yempo, so when they join, they stay.’’
‘’ If we need to expand, it’s no stress.’’
3. Provide the ability to offer better service to clients vs. competitors.
‘’Our Yempo team means we can provide continuity of service to our clients across public holidays.’’
‘’Incoming calls to our Perth number are answered by anyone in our team – Australia and Philippines – and customers can’t tell the difference.’’
‘’…a dedicated, reliable, consistent team with a great work ethic that’s looked after well.’’
‘’Excellent English and shared time zones make working with our Philippines-based team very easy.’’
Read: 5 Huge Financial Advantages of Outsourcing Your IT & Development Functions to the Philippines
4. Deliver 1, 2, 3, while protecting brand and company values.
‘’Yempo gives us peace of mind. Comfort that our team in the Philippines is treated well and similarly to our Australia-based teams.’’
‘‘We have a lot of experience with offshoring, and Yempo is the first company we’ve found where delivery exceeds what we expected.’’
‘’Yempo’s Australian, Philippines-based CEO Michelle Fiegehen understands the Australian way of doing business.’’
‘’Yempo’s ethics & values make them a trusted & professional partner where people are treated well.’’
“ I’ve been asked why we don’t directly hire Philippines-based talent. My answer is that the knowledge that Yempo has, ensuring compliance with local labour legislation is worth its weight in gold.”
Read: IT And Development Outsourcing Guide
New IT outsourcing models emerge and deliver bigger wins.
In 2017, Research Gate reported that IT Outsourcing models focused on cost and time savings. Larger clients also used the flexibility of outsourcing to protect their organisations from technological change risks.
Six years later (2023) KPMG’s ‘Future of Outsourcing’ found that not much has changed for 55% of the market. Cost savings and managed services continue to (just about) dominate. But, as the experience of clients and their IT outsourcing partners grows, clients seek to build bigger strategic relationships with outsourcers. They no longer look to add team members, they want to outsource full business functions.
They need IT outsourcing partners who can deliver transformational changes and keep them ahead of competitors.
Cost savings remain the outsourcing category norm. But the ability to fix big problems drives larger deals.
Do these shifts resonate with the needs of your organisation? If so, please share your plans with Michelle, our Aussie CEO. She’ll collaborate with you to explore options and evaluate if building an IT team in the Philippines is right for your business.
Thank you for visiting our blog! We hope you found our content informative and engaging. Stay connected with us for more insightful blogs, updates, and tips on outsourcing IT & outsourcing Finance in the Philippines, or shoot us an email at [email protected]. We are happy to answer your questions!
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