Software Outsource to the Philippines vs. Australia: Which One to Choose? (2023)

Not every day do we get to choose between two equally attractive outsourcing destinations like the Philippines and Australia. It really depends on your company’s specific needs and preferences when it comes to who you outsource software development work to, but we’re here to make that decision a little easier.

In this blog post, we will explore the challenges and factors to consider when outsourcing software development to either the Philippines or Australia. We will also throw in a few of our own top offshore companies from each country to get you started.

Table of Contents

Challenges in the Outsourcing Industry

The digital age has opened the door to a whole new world of opportunities when it comes to outsourcing software development. However, there are still certain challenges that need to be addressed.

Here are some of the most common challenges faced by companies when considering offshore outsourcing their software development:

Language Barriers

It is essential that everyone involved in the project is able to communicate clearly. Even with advancements in translation technology, it’s still important that both parties can understand each other, especially when it comes to developing software.

Time Zone Difficulties

Due to distance, working hours can vary from country to country. If you’re from a different time zone, you will have to make sure that the outsourced team is available during your working hours or make allowances for any delays.

Software Outsource to the Philippines vs. Australia: Which One to Choose? (1)

Productivity

Since both parties are apart, it’s difficult to ensure that the work is being completed to the highest standard. Whether it’s for a mobile or website development project, it’s important to establish a timeline that outlines the progress of the project and milestones along the way.

Legal Issues

With all the legal aspects of the venture in business processing outsourcing, any organization should be aware of all aware of the legal risks that come with it. It is important to have a comprehensive understanding of all relevant laws in order to ensure that everyone involved is properly protected.

(Video) The Philippines Business Outsourcing Problem, Explained

Costs

Outsourcing solutions doesn’t always mean saving money. The key to success is finding the perfect balance between yourself and your wallet. It may require some effort, but with a little time and patience, you’ll be able to discover what works best for both of you!

Now that we have a better understanding of the challenges associated with outsourcing companies let’s dive into the two countries we are considering.

Philippines or Australia: Which One to Choose When Outsourcing Your Software Solutions?

It’s a tough decision, and many factors come into play. As a business owner, you need to consider the cost, quality of services, language barriers, time zone, and cultural differences.

Here are some of the major points to consider when deciding between the Philippines and Australia as an outsourcing partner:

Outsourcing Industry

The Philippines has been a popular outsourcing destination for many years, and it continues to be a top choice among companies from all over the world. Their robust Business Process Outsourcing (BPO) industry is proof of that.

In the early 2000s, the Philippine government began to take steps toward welcoming foreign investors. They encouraged growth with tax breaks and streamlined business registration proceedings, as well as making improvements in infrastructure. As a result of these policies, the industry quickly took off on an upward trajectory.

On the other hand, Australia is also making moves in this direction and gaining traction as an outsourcing market. There are Australian companies that specialize in software and IT solutions, providing sophisticated technologies and services.

However, they cannot keep up with the business needs of the global market in terms of cost and speed, which is why they are seeking collaborators from other countries.

Cultural Considerations

The cultural gap between the Philippines and Australia is an important factor to consider. Filipino workers are well-adjusted to Western culture because of the colonization of the country by Spain and the United States.

Additionally, people in the Philippines are known for their hard work ethic and friendly attitudes toward foreigners. This makes it easier for employers to build strong relationships with offshore staffing and receive quality results.

On the other hand, Australia is a unique cultural melting pot with a variety of Asian and European influences. This creates a vibrant working environment where ideas can be exchanged without much difficulty.

Competence and Skill Level

When it comes to having a highly skilled workforce, you cannot go wrong with either the Philippines or Australia.

(Video) Why Outsource to the Philippines?

Many businesses in the Philippines have access to world-class talent, as the country is home to many universities offering high-level education. Filipinos are also known for their strong technical aptitude and are able to adapt quickly to the changing demands of the market.

In Australia, there is a wide range of qualifications and certifications that are recognized around the world. To give you an idea, graduates from Australia’s universities often get job offers even before they’ve finished their studies.

What comes down is that both the Philippines and Australia have their pros and cons when it comes to outsourcing an offshore team for your software project. However, with a clear understanding of your needs and goals, it is possible to find the perfect match for you!

Language Capabilities

English is the primary language used for communication in both countries, making it easier for employers to communicate with their outsourced staff.

Software Outsource to the Philippines vs. Australia: Which One to Choose? (3)

Filipino workers are also fairly proficient in other languages, such as Spanish. This makes it easier for Filipino workers to collaborate with companies from Europe or Latin America.

Australians, on the other hand, are well-versed in both English and Chinese, making it easier for them to collaborate with teams from China or other Asian countries.

Pricing

Cost reduction is often the aim of outsourcing. In this regard, the Philippines is often seen as a more cost-effective option as compared to Australia. This is especially true when it comes to tasks that require basic technical knowledge and repetitive processes.

According to Clutch, you can expect an average cost of $25-49 per hour when you outsource to the Philippines, while the cost savings may be slightly lower when outsourcing to Australia. Of course, this will still depend on the complexity of your software project.

Australian outsourcing companies, however, are the more expensive option among the two countries when it comes to complex tasks and more specialized services, such as building software.

With its high-quality life standards and stable economy, Australia has become a preferred destination for companies seeking quality service and assurance for their projects. The average rates can be as high as $100-190. This still depends on when hiring junior to senior developers.

Time Zone

Compared to having an in-house team, having a developers team means you’ll need to adjust your communication and working hours.

The Philippines is in the GMT+8 time zone, while Australia is in GMT+10. This means you’ll have to work more hours if your remote staff is based in the Philippines, and it will take some getting used to.

(Video) Outsourcing: Philippines Vs. India

On the other hand, an Australian team may be more convenient for companies based in Europe as it provides a more favorable time zone for business communication.

But if you choose to outsource to the Philippines, project management tools are your best friend. The right ones will help you manage time and communication efficiently, regardless of where your team is located.

Now that you have the facts and figures, it’s up to you to decide which country is best suited for your software project! To give you a headstart, we will provide you with the top outsourcing companies in both the Philippines and Australia. Check them out below!

Software Outsource to the Philippines vs. Australia: Which One to Choose? (4)

Top Outsourcing Companies in the Philippines

Here are the top Philippines outsourcing companies we recommend:

1. StarTechUP

StarTechUP is a Cebu-based company that offers tailored software solutions for big or small businesses and any type of organization. From web development to business analytics, they have a team of experts that can help you achieve your project goals.

Started in 2013, the company has years of experience providing software development services in the competitive European market. Trust that their services are tailored to meet the highest standards of quality.

Contact them here!

2. Accenture Philippines

Accenture is a multinational company that has a large presence in the Philippines, with several delivery centers across the country. The company offers a range of services, including developing software, application maintenance, and testing.

Their pricing, however, may be on the higher side compared to most companies that offer outsourcing in the country. But their years of experience in software engineering make it an ideal choice for complex projects.

3. Exist Software Labs

Exist is a homegrown IT company that provides software development, maintenance, and testing services. It has a strong focus on open-source technologies and has expertise in areas such as cloud computing, big data, and mobile app development.

So, if you need a global technology innovator and leading Java Developer in the Philippines with over two decades of experience providing enterprise solutions, they’re the one to call.

4. Pointwest Technologies Corporation

Pointwest is another homegrown IT company that provides a range of services, including software development, application management, and data management. It also offers specialized services in areas such as analytics, cybersecurity, and cloud computing.

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This Filipino-owned IT and BPO company was established in 2003. Its founders are pioneers of the Philippine outsourcing industry who aimed to create a global brand name for Filipino professionals.

5. Arcanys

Arcanys is a software development company that provides custom software development, mobile app development, and cloud computing services. It has a strong focus on agile development methodologies and has expertise in areas such as blockchain, artificial intelligence, and machine learning.

Arcanys is located in Cebu, Philippines. It has a team of professionals with over years of experience providing software solutions to clients in the US, Europe, and Asia.

Software Outsource to the Philippines vs. Australia: Which One to Choose? (5)

Top Outsourcing Companies in Australia

Here are the top Australian companies where you can outsource your software project:

1. DWS

DWS is an Australian IT Consulting Services Group and a subsidiary of HCLTech that was founded in 1991. The company offers a wide variety of services, such as IT Consulting Services, Digital Transformation, Business Analytics and Data, and Program and Project Management.

With over 700 employees, DWS has offices in multiple locations across Australia and New Zealand, catering to a diverse clientele ranging from blue-chip corporate clients to various government agencies.

2. DiUS

Founded in 2004, DiUS aimed to become the best Australian product development company, engineering software and hardware devices using advanced technologies. The company’s vision is to positively impact clients, their customers, the industry, and communities.

Over the past 18 years, DiUS has delivered over 1,000 projects and created a community of client partnerships, leading the industry in new technology applications. DiUS values reflect their passion, purpose, and beliefs, and they strive to create a better world.

3. Intergy Consulting

Located in Sydney, Intergy Consulting is a software development company established in 2004. With extensive experience in enterprise software application development projects, they specialize in delivering customized services for Australian businesses and government organizations looking to grow.

Whether you need high-quality custom web development, digital transformation, staff augmentation, or mobile app development services, Intergy’s team of skilled software developers is here to help provide top-notch user experiences.

4. Vrinsoft Technology

Vrinsoft Technology is one of the Australian businesses in Melbourne that provides application and software development services and digital marketing services. The company has over years of experience in delivering tailor-made solutions to organizations across the region.

With a team of experts in development, design, and marketing, Vrinsoft Technology strives to deliver the highest quality solutions for a wide range of industries.

(Video) Index lists best outsourcing firms worldwide | The Final Word

5. Alliance Software

Alliance Software is an Australian IT company located in Nunawading. This company specializes in custom comparison software, CRM solutions, and other UI/UX web design services.

With years of experience in providing software solutions, Alliance Software has worked with several big clients in the finance and insurance industry. They strive to create innovative software that helps organizations increase revenue and reduce costs.

FAQs

Software Outsource to the Philippines vs. Australia: Which One to Choose? ›

Cost reduction is often the aim of outsourcing. In this regard, the Philippines is often seen as a more cost-effective option as compared to Australia. This is especially true when it comes to tasks that require basic technical knowledge and repetitive processes.

Why is it best to outsource in the Philippines? ›

Reduce legal liability. Outsourcing to the Philippines means that your offshore workers are employees of Outsourced so we take care of all the local compliance and provide all the resources and infrastructure the staff need to fulfil their role with your company.

Why outsourcing to the Philippines is better that any other countries in Asia? ›

Cost efficiency

By outsourcing to the Philippines, businesses can save 60% to 80% of operational costs. This is because of the low cost of living in the country. The salary of fresh graduates in the Philippines is a small fraction of their counterparts in the West.

What are the disadvantages of outsourcing in the Philippines? ›

Outsource Philippines Disadvantages:

Loss of control in outsourcing can mean very high costs with a sub-par product or service. Threat to Privacy - You may have to let your outsourcing provider in on trade secrets, or proprietary software or processes.

Why do BPO companies choose to operate in the Philippines? ›

Outstanding Value. Most businesses choose to outsource because of the lower costs associated with doing so, and the Philippines offers some of the most competitive rates in the industry. As a company owner, you save on office space, legal and HR fees, the newest equipment, taxes, and more in the Philippines.

What is Philippines famous outsourcing? ›

The Philippines has a large pool of highly skilled IT professionals, making it a popular destination for outsourcing technical support services such as helpdesk and troubleshooting. The country is a common location for companies to outsource back office functions such as data entry, data processing, and accounting.

What is the top outsourcing industry in the Philippines? ›

Call Center Services

This is the most sought-after outsourcing service from BPO companies in the Philippines. Various firms handle different accounts from other countries. It is also the most popular service which creates misconceptions about the BPO industry.

What is the top 1 outsourcing country? ›

The US has the most percentage of outsourced jobs in the world, with almost 68% of companies delegating their services.

Which country is the most preferred destination for outsourcing in present time? ›

Thus, India should be the first country that pops into your head when considering where to outsource your software development project. India, the country with the second highest population in the world and an abundance of software developers, is far more cost-effective than other developed countries.

What is the competitive advantage of the Philippines over other countries? ›

English-speaking High-skilled Manpower

The main competitive advantage of the Philippine workforce is the widespread proficiency in English. English is taught in all schools, making the Philippines the third largest English-speaking country in the world.

Why do foreign companies outsource in the Philippines? ›

COST EFFICIENCY. BPO professionals in the Philippines are relatively affordable compared to those in other countries. There are other countries that have lower rates compared to the Philippines, but they do not offer the same value as Filipinos. Take for example the largest outsourced country in the world, India.

What are 3 disadvantages of outsourcing? ›

Disadvantages of outsourcing
  • service delivery - which may fall behind time or below expectation.
  • confidentiality and security - which may be at risk.
  • lack of flexibility - contract could prove too rigid to accommodate change.
  • management difficulties - changes at the outsourcing company could lead to friction.

What are the challenges faced by the Philippine BPO industry? ›

BPO Companies Face the Challenges

As for customer attrition and the threat of automation, BPO companies intend to provide upskilling and reskilling trainings to the workforce. This will enable workers to handle more complex jobs and problem-solving responsibilities outside of repetitive tasks.

What would be the future of business process outsourcing in the Philippines? ›

Experts predict that the country's outsourcing industry will continue to expand and thrive. To stay competitive, many BPO companies in the Philippines have expanded their services to meet the needs of different industries.

Why do you choose BPO instead of IT? ›

i want to learn and explore things in this sector bpo give me experience about social as well as technical field i want to grow in this sector and it help me lot in learning things and technology. i want to grow in this sector and it help me lot in learning things and technology.

Does US outsource in Philippines? ›

It is a well-known fact that Philippine business process outsourcing (BPO) companies have been catering to US firms of different sizes and industries for over 40 years. A significant number of top US companies outsource their operations to the Philippines.

Who is the Philippines biggest BPO outsourcing client? ›

Top BPO Service provider in the Philippines
  • Sitel Philippines Corporation. ...
  • CloudStaff Philippines Inc. ...
  • Six Eleven Global Teleservices. ...
  • Infinit-O. ...
  • Outsourced. ...
  • DOXA7. ...
  • StaffWiz. ...
  • Sutherland Global Services Philippines Inc.
Feb 10, 2023

What is the Philippines the world's largest supplier of? ›

The Philippines is one of the world's largest producers of coconuts. Mangosteens, papayas and bananas can also be found there.

Is BPO the fastest growing industry in the Philippines? ›

The Philippine BPO industry contributes nearly $30 billion to the economy each year. It is estimated that 1.3 million Filipinos were employed in over 1000 BPO companies in 2019, and that figure is showing 8-10% growth every year. It is estimated that the country holds 10-15% of the global BPO market.

Is the Philippines the BPO capital of the world? ›

For the next few years, the Philippines continually gained a huge percentage of the global BPO market. As a result, the country was declared the world's BPO and call center capital.

Which BPO company pays more in the Philippines? ›

CompanyYearly Average Salary Range
TeleperformancePHP 122,554 – PHP 1,880,407
Convergys CorporationPHP 194,589 – PHP 1,813,590
AccenturePHP 182,801 – PHP 946,873
Concentrix CorporationPHP 181,714 – PHP 814,447
3 more rows
Sep 9, 2017

Which country is the best to outsource for manufacturing? ›

The best country for outsourcing manufacturing is China

It was followed by India, Turkey, and Thailand. Manufacturing accounted for 30% of the country's GDP in 2019, and despite the pandemic and supply chain delays, it remains a key manufacturer. Manufacturing and labor costs in China are unbeatable.

Where is IT best to outsource from? ›

Here are the Best Countries for Outsourcing
  • India. India is now the most populous country in the world and arguably the most popular location for outsourcing software development. ...
  • Philippines. ...
  • Poland. ...
  • Brazil.
Feb 15, 2023

Who does the US outsource the most to? ›

The U.S. outsources to China more than any other country. In addition, China's outsourcing market grows by 30% every year. Behind China, The Philippines, Taiwan, Ukraine, and Vietnam are among the top 5 countries U.S. businesses outsource to.

Which is a better place for BPO India or Philippines? ›

While outsourcing to India may guarantee lower labor costs, many western companies find that the quality of the labor provided by the BPO sector in the Philippines is much higher, and offers companies a better cost-to-skill ratio.

Which countries are currently benefiting the most from offshoring? ›

Offshoring manufacturing to the right country is a great option if your business needs to reduce operating costs while maintaining quality standards. It offers advantages like easier access to resources and specialized suppliers.
...
4 best countries for offshore manufacturing
  1. Mexico. ...
  2. China. ...
  3. India. ...
  4. The Philippines.
May 11, 2022

What is the most common type of IT outsourcing? ›

Business process outsourcing is the most common type of outsourcing. It refers to contracting any business process to a third-party service provider.

What is Philippines known for in other countries? ›

The Philippines is also home to world-renowned natural wonders like an underground river and rice terraces, incredible diving spots rich in biodiversity, colorful public transportation in the Philippines, unique cuisine, vibrant festivals that showcase its colorful culture, and friendly locals regarded as some of the ...

What are our problems with resources in Philippines? ›

The Philippines' rich biodiversity is under threat, mostly from human activities, including deforestation and forest degradation, illegal fishing and illicit wildlife trade.

What makes the Philippines unique from other countries? ›

Its 7,107 islands

The Philippines is made up of more than 7,107 islands. And on every island there is a paradise to be found, unique food to eat, a singular culture to experience and new people to meet. The sheer amount of beaches to enjoy is almost uncountable.

Why is Philippines ideal for international business? ›

The ASEAN Free Trade Agreement (AFTA) has integrated Asia's economies into one giant market, making the Philippines an ideal location for businesses that want access to this market.

Why do companies go to Philippines? ›

Companies outsource to the Philippines because the country offers a favorable cost structure, with competitive wages and lower operating costs compared to other outsourcing destinations such as India and China.

Does outsourcing in the Philippines contributes on its economic development? ›

The Business Process Outsourcing (BPO) industry is one of the Philippine economy's two primary 'legs', contributing $26 billion to the Philippine economy in 2019.

What is the biggest problem with outsourcing? ›

Language and Cultural Differences

The biggest challenges most businesses experience when outsourcing are cultural and language barriers. When companies outsource, cultural and linguistic hurdles may cause them to lose focus on essential aspects like innovation and attention to detail.

Who benefits from outsourcing? ›

Is Outsourcing Beneficial? As mentioned above, outsourcing helps businesses control their cost. It's also beneficial for companies or overwhelmed business owners who want to free up more time and focus on the core of their business activities.

Which of the following is a disadvantage of software outsourcing? ›

Security risks and confidentiality issues

Involving strangers in your development project is one of the disadvantages of outsourcing software, even if they say that they are the best team in the industry. There is always the potential for security risks when outsourcing.

What are the risks of outsourcing in 2023? ›

5 Potential Disadvantages of Outsourcing
  • Security and Confidentiality Risks. ...
  • Loss of Control. ...
  • Delayed Delivery. ...
  • Hidden Costs. ...
  • Quality Concerns.

Is outsourcing good or bad? ›

While the practice of outsourcing is loaded with benefits for the business, it can negatively impact the work culture within a company. Employees are crucial to business success. Outsourcing of tasks can create a fear that they may be replaced or the company no longer needs them.

What is the advantage of BPO in the Philippines? ›

BPO offers several benefits, such as lower costs, global expansion, and higher efficiency, while some of the drawbacks include security issues, hidden costs, and overdependence.

Why is BPO popular in the Philippines? ›

The BPO industry in the Philippines has some key advantages over other outsourcing destinations. Low cost of labor, an English-proficient and highly educated workforce, as well as cutting-edge technology and infrastructure, are strengths that will continue to give the country an edge in the future.

How much do companies save outsourcing to Philippines? ›

All in all, companies outsourcing to the Philippines can save up to 60% on labour and 40-50% on operating costs, savings that can go towards resources that will contribute to healthy and substantial growth. In the Philippines, outsourcing is one of the legs of the economy.

Why should we hire you in BPO without experience? ›

Why should we hire you? Make your lack of experience work in your favour. Use this as a strength and tell the panel you are fresh, enthusiastic, hungry and ready to get started! You want the panel to hire you because of your passion for this job and how much you are attracted to their company.

Why BPO is the fastest growing industry in India? ›

The growth is largely driven by the increasing need for companies to outsource most parts of their process in a bid to cut costs, yet operate efficiently. If the term is new to you, BPO involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider.

How do you introduce yourself in a BPO interview? ›

Here's what to include when asked this question according to a former BPO HR:
  1. Your educational/professional background is.
  2. Achievements during the course of your education/previous work.
  3. How your experience has taught you to handle client concerns well.
  4. What skills you can offer as a customer service representative.

Why are foreign investors attracted to outsource in the Philippines? ›

But it is worth noting that the key reasons why a lot of foreign investors and entrepreneurs find the Philippines so attractive when looking for an outsourcing location are the cost-efficient labor costs and the deeply-rooted values they uphold in their personal and professional lives – there is an unmistakable, ...

Why offshore to the Philippines? ›

Cost-effectiveness

One of the biggest reasons foreign businesses choose to offshore in the Philippines is the overall cost benefits. The low cost of living in the Philippines means that average salaries are also less than in countries like the United States, Australia, United Kingdom, Hong Kong, and Singapore.

What are the benefits of outsourcing to a country? ›

The availability of cheap overseas labor is one of the biggest advantages of outsourcing. Lower tariffs and duties, and local market access, can be added incentives to move production offshore. Services can be outsourced as well to take advantage of lower costs.

Why is customer service outsourced to the Philippines? ›

Cultural compatibility

Filipinos are familiar with Western culture, values, and customs, which makes it easier for them to relate to customers from these countries. This cultural compatibility also contributes to the high level of customer satisfaction that businesses can achieve by outsourcing to the Philippines.

What country is the largest foreign investor of the Philippines? ›

Singapore

Why is the Philippines one of the richest countries in the world in terms of resources? ›

The Philippines has a bounty of minerals, cropland, timber, and coastal and marine resources. These natural resources make up an estimated 19% of the nation's wealth, contributing to the country's consistent GDP growth.

What are the advantages of offshoring in the Philippines? ›

Lowers Labor Costs

An advantage of offshoring is that businesses can save money when hiring overseas employees to perform the same tasks with a much lower labor cost than wages in Northern America.

Why did the US want the Philippine Islands? ›

Americans who advocated annexation evinced a variety of motivations: desire for commercial opportunities in Asia, concern that the Filipinos were incapable of self-rule, and fear that if the United States did not take control of the islands, another power (such as Germany or Japan) might do so.

What are the negative effects of outsourcing? ›

But as with most things, outsourcing isn't all good; it does cause some unintended negative consequences.
  • Outsourcing Lowers Barriers to Entry and Increases Competition.
  • Outsourcing Erodes Company Loyalty.
  • Outsourcing Can Eliminate Jobs From the Domestic Workforce.
  • Outsourcing Affects Insourced Countries.
  • The Bottom Line.

Who benefits the most from outsourcing? ›

businesses

What negative effects can come from outsourcing? ›

So, what are the disadvantages of outsourcing?
  • Loss of control.
  • Negative impact on staff.
  • Data protection and confidentiality risks.
  • Lack of consistency.
  • Financial and reputation risks.
  • Less flexibility.
Feb 3, 2022

What makes Filipino the best in customer service? ›

They listen to what is not being said in the context of what has already been talked about. This doesn't mean, however, that Filipinos will be vague and cryptic when speaking with customers. They'll follow the script and even go off-script until they can end the conversation calmly.

What business processes are usually outsourced in the Philippines? ›

What are the business processes outsourced from the Philippines?
  • Customer Service. ...
  • Back-office transactions. ...
  • IT and Software operations. ...
  • Finance and Accounting. ...
  • Human resource services. ...
  • Knowledge Services.
Nov 2, 2022

Why do many companies in the US put up call centers in the Philippines? ›

The Philippines is also considered a location of choice due to its less expensive operational and labor costs, and a constant stream of college-educated graduates entering the already mostly young workforce.

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