21 Jun Around 40% of IT Outsourcing providers are failing within 2 years
So why are 40% of IT outsourcing providers failing in the first 2 years? The Philippines is a booming place for the ‘outsourcing’ industry. Every man and his dog comes here with a dream to set up a lifestyle business and make Filipino labour available to their network back home.
However, most of the time what happens is that they fall headlong into the quagmire of operating a business in Philippines, and they often badly burn their clients.
Back in 2004 Scott published an article called “How to avoid Bob Ruining Your Offshore Team”.
The article is about poorly prepared facilities run by poorly skilled management teams that don’t understand the Filipino culture or the complexity of running a stable business in the Philippines.
Unfortunately, most of them are Australian. They mostly have good intentions, but terrible execution.
There’s no useful official statistics on how many BPOs fail each year through incompetence, but anecdotal evidence collected around Clark and Manila show an enormous failure rate. It is likely as high as 40% of these startups are not surviving two years.
Take this into consideration when a friend of a friend or someone who is clearly NOT an expert on Philippines facilities tries to convince you to use their facility. The chance of it going badly are very high. The fellow “Bob” mentioned in the article has damaged many client’s businesses in his trial-and-error approach.
At Tech Elite we have candidates coming to us literally every single week looking for a new job because they are worried about the stability or viability of the startup they have been working for. Job security is extremely important for Filipinos, and if a facility doesn’t have a great reputation you will struggle to attract staff and struggle to retain staff.
We’ve got over 28,000 likes on Facebook, almost all from IT-industry Filipinos who live within 100kms of our facility. Filipinos use Facebook a lot, so that’s another good sign that our jobs are sought after.