SMBs Competing in the Face of Offshore Outsourcing

Another day, another article about the growing trend to outsource offshore. Expect many more.

The Wall Street Journal recently ran an article in its center front page column about outsourcing of call centers to the Phillipines. Due to the U.S.’s longtime presence in the Phillipines, finding call center employees who can sound American seems to be less of a problem than in some other popular offshore destinations, such as India. Call center reps in the Phillipines apparently are faster to adapt to American accents and colloquialisms. That’s making the Phillipines a rapidly-growing outsourcing destination.

There are 30,000 people answering phones and emails in Manila. They perform work for such American icons as American Express and Dell Computer. Call centers have become very important to the Phillipines economy.

This trend is not going away. Companies in the call center business and the increasing number of service businesses that are moving offshore have no choice but to adapt and adjust. Small and midsize providers have a lot at risk.

How will they meet this challenge? The same way companies always compete–by differentiating, partnering or diversifying, among other things:

    Finding underserved niches that the offshore providers are not good at or are not interested in.

    Partnering with offshore providers. For instance, the U.S. company could become the sales and marketing arm, and the offshore company could focus on delivering the services, given the lower cost structure.

    Diversifying to add complementary services. For instance, a call center business could add offerings such as direct marketing, web design and development, to develop a more comprehensive customer-focused offering and thereby create competitive advantage.


Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.