The Better BPO Choice: The Philippines or Nearshore Outsourcing?

If you read the blog title and thought, “Great! A quick answer to my question,” I’m sorry. It’s not that simple. 

The entire BPO industry has been turned upside down by COVID-related ramifications, and it’s a complex assessment of which regions are doing better than others.

In short, The Philippines, the long-standing leader in offshore outsourcing, is facing some real hurdles to regaining full-service continuity and scale. Meanwhile, nearshore locations across Central and South America, offering ever-improving service and pricing, are closing the gap during the pandemic.  

So which BPO option is best for organizations looking for stable outsourcing in 2020 and beyond?

The Pros and Cons of Offshoring to The Philippines 

COVID-19 is still hitting the Philippines hard, as continued coronavirus spread is keeping things locked down — and call center leaders haven’t been able to deploy at-home models as proactively as hoped, leaving a great deal of uncertainty on whether this is a temporary hiatus or the new normal for the region. 

Offshore call centers have been the gold standard for some time, and The Philippines chief among them.

PROS:

• The hard-won expertise and infrastructure of The Philippines still exists, and it remains one of the top offshore options for that reason.
• While COVID-19 has hampered the speed of the region to offer seamless remote-work models, the technical fundamentals of their personalized service remains.
• Few (if any) outsource locations can compete with The Philippines on price tag.
• The Philippines offers huge access to young, highly-skilled agents, as the result of years of governmental emphasis and investment in the call center industry.

CONS:

• There’s no way to predict when Philippine call centers can truly return to normal, as the country continues to enforce limitations to combat the spread of COVID-19.
• The Philippines, like other offshore locations, can create geographic challenges, such as working across disparate time zones and loss of visibility and control. 
• Despite plenty of English-speaking agents, offshore locations may struggle to meet the same standard of language and communication proficiency of LATAM/nearshore vendors.
• Linguistic and cultural barriers can disrupt business continuity and impact customer satisfaction if they’re glaring.

The Pros and Cons of Outsourcing to Nearshore Locations  

In light of the difficult circumstances facing offshore locales, managing remote work and coping with COVID-19 complications, many leaders are considering outsourcing with nearshore call centers closer to home. 

Nearshore outsourcing, particularly vendors in Central and South America, has been growing in popularity, as service, skills, and specialities have grown across the region. 

With burgeoning call center economies now baked into many nearshore countries, making the choice between nearshore and offshore locations is getting harder and harder every year.

PROS:

• Close proximity offers call center leaders greater visibility into their operations, with a sense of greater stability and control. Best yet, domestic U.S. organizations are never more than a quick flight away from most nearshore operations.
• Strong cultural affinity with western customs, as well as exceptionally skilled bilingual speakers, gives nearshore contact centers a huge advantage in communication over most other outsourcing locations. 
• Quicker response times are common compared to offshore counterparts, partly because time zone alignment and conversational communication is better aligned to quickly navigate processes and move projects forward.

CONS:

• Nearshoring tends to cost a little bit more than offshoring. With a main motivation to reduce costs and improve customer experience, organizations need to strike a balance between some of the nearshore advantages and the reality of a higher overall cost. It’s important to note, however, that the region is closing the pricing gap compared to its offshore counterparts.
• Variation in market maturity. While some nearshore locations, like Costa Rica, Panama and Mexico, have established thriving, stable BPO industries, others are still working to catch up. There’s no question that the entire region sees the undeniable benefits of providing outsourced services to areas like North America and is working to improve infrastructure and processes, but finding the right partner takes unique insights into the market as a whole.
• Like any region, nearshore is not immune to uncertainty. At the moment, the nearshore call center industry has managed to weather the coronavirus disruptions and minimize reductions in staffing and quality. But if 2020 has taught us anything it’s that interruptions can strike anywhere without notice. 

Offshore vs. Nearshore: The Verdict 

In our experience, the best choice for most organizations will come down to their unique needs — not the pros/cons of any specific location. 

Business leaders must work with teams to establish exactly what the company hopes to achieve. Once you can state your objectives and goals for outsourcing services, you’re ready to make a decision.

Do you need highly-fluent agents to manage customer communications? Do you need IT contact centers with a proven track record of excellence? Do you need help defining your requirements?

Well, who better than outsourcing experts with more than 25 years of experience bringing outsourcing partnerships together across the globe, across industries. Even in the face of COVID-19 uncertainty, we’re helping organizations answer their biggest questions — like “offshore or nearshore?” — and we’ll help you too.

This article originally appeared on the Outsource Consultants Blog.

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Outsource Consultants is a call center referral and advisory firm that helps companies find the perfect fit outsource call centers. Our 25+ year industry experts simplify your search by matching you with BPO options that meet your exact requirements. We save time, reduce costs, and find you the right partner, at no charge to you. To get started, request your free cost proposal.