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Outsourcing Guide
The Pros & Cons of Procurement Outsourcing Services
Discover procurement outsourcing, what it is, its pros and cons, some examples, and the top agencies that offer it to SMBs

In 2022, the global procurement outsourcing market was valued at USD 6.73 billion. With a 9.8% CAGR (2023-2030), the industry is expected to reach USD 14.21 billion by 2030.

More and more companies are recognizing the benefits of outsourcing. Why struggle managing supply chains while maintaining quality and compliance when you can leverage third-party expertise, cost savings, and improved efficiencies?

Procurement operations outsourcing can reduce your risk, lower your expenses, and maximize your ROI. If you’re considering outsourcing your procurement functions, learn about its pros and cons to ensure you reap the benefits and mitigate the risks for a successful outsourcing experience.

What is Procurement Outsourcing?

Procurement outsourcing is the business practice of hiring a third-party agency or person to execute the procurement functions of an organization, such as sourcing, purchasing, vendor management, contract negotiation, and management, quality control, and compliance, spend analysis, and risk management.

The typical reasons why companies outsource procurement functions are cost reduction, leveraging others' expertise in procurement, increasing efficiency, and being able to focus more time and energy on core business functions.

7 Pros of Procurement Outsourcing

Why are companies outsourcing their procurement rather than managing it in-house? Below are the benefits of procurement operations outsourcing that are converting more and more companies into using this business strategy.

Cost Savings 

Companies can reduce the cost of their procurement activities by leveraging economies of scale and the capabilities of their outsourcing partner. This includes reduced prices through bulk purchasing, reduction in administrative expenses, and reduction in errors and inefficiencies. The savings can be immense, and the company will be able to divert its resources to other strategic areas effectively.

Increased Efficiency

Agencies that provide outsourced procurement services mostly include advanced technologies and smooth processes, which can enhance the efficiency of procurement operations. These technologies include automated procurement systems, data analytics, and AI-driven insights that produce faster transaction times and reduce manual effort. Therefore, companies can benefit from faster procurement cycles and boost their productivity.

Access to Expertise

Procurement outsourcing service providers bring deep knowledge of specific markets and categories, lending a wider perspective to companies that leads to better purchasing decisions.

Their procurement experts would know more of market trends, of the capabilities of suppliers, and of leading practices in negotiating and managing contracts. Such insights can help companies base their decisions on knowledge and improved results from their outsourced procurement activities.

Enhanced Business Focus

Outsourcing non-core functions like procurement allows companies to focus more on strategic initiatives and core competencies. This means that internal teams can dedicate more time and resources to areas that directly impact the company's growth and competitive advantage. By offloading procurement tasks to experts, companies can improve their overall business performance and innovation.

Improved Supplier Management

Typically, outsourcing companies have large networks of relationships with suppliers and can manage those relationships more effectively. This means better terms from negotiation, ensuring timely deliveries, and maintaining quality standards.

By leveraging their partnership, companies can build stronger, more reliable supply chains and forge stronger relationships with key suppliers.

Stronger Risk Management

Outsourcing agencies, who are external to a company, are better positioned to identify, evaluate, and mitigate the risks in supply chain and procurement processes since they are equipped with the tools and experience to address supply disruptions, compliance issues, and market volatility. 

By outsourcing procurement, companies will not only reduce their exposure to risks but also assure a much more stable and secure supply chain.

Scalability 

Because outsourcing agencies take over the management of offshore procurement teams, companies can scale up procurement activities more flexibly in terms of business demands without having to hire or train people directly. 

This scalability is particularly useful to companies experiencing growth or seasonal fluctuations in demand. An outsourcing provider can rapidly ramp up or down its services to provide only the necessary support to meet the changing business needs in an efficient way.

5 Cons of Procurement Outsourcing

There are risks associated with any business strategy. While outsourcing procurement to agencies carries many benefits, it also brings several potential drawbacks that should be considered before outsourcing.

Loss of Control

When you hire a third party to manage your procurement, you relinquish control to them, which may affect your capability of ensuring quality and compliance to the company standards. This can be mitigated by establishing clear contracts with detailed service level agreements and regular performance reviews.

Dependence On A Third-party

Outsourcing entails dependency on a third party, which may pose a problem if expectations are not met or if there are other problems with the contract. To avoid this problem, one must diversify and outsource to several service providers while maintaining some in-house procurement capabilities as a backup.

Miscommunication

When outsourcing to an offshore service provider, there will be time zone, language, and corporate culture differences, which pose communications challenges to the effectiveness of the outsourcing partnership. This can be mitigated by establishing strong communication protocols, using collaboration tools, and setting regular meetings to get things aligned.

Security Risks

Outsourcing entails sharing sensitive information on procurement processes and suppliers, which increases the possibility of data leakage and intellectual property theft. Firms can reduce these risks by implementing top-notch data security procedures, conducting periodic audits, and ensuring that the provider is following industry-standard security protocols.

Hidden Costs

Although the cost savings of outsourcing may be projected at the beginning of outsourcing, these may be offset by hidden costs, such as transition expenses or ongoing management fees, or costs associated with contract renegotiation. A way to avoid this is by doing due diligence in the planning stage; clarify contract terms and continuously monitor all associated costs to effectively manage the total cost of procurement outsourcing services.

Inconsistent Quality

As you lose some control over your procurement process, there may be inconsistencies in the quality of services provided, especially if the outsourcing provider does not have stringent quality control measures. Such a risk could be mitigated by choosing providers with proven track records and by including quality metrics and regular audits in contracts.

Impact on In-house Staff

Outsourcing can cause morale problems within in-house staff if it results in job loss or if they feel that their jobs are being undermined by the outsourced team. This can be lessened through transparency when communicating to employees. Involve them in the transition process and provide training for new roles or offer career development opportunities within the company.

5 Procurement Outsourcing Examples

If you’re considering outsourcing procurement but aren’t quite certain how it works, below are sample scenarios showcasing outsourcing different kinds of procurement functions to help you picture what this sort of strategy can do for you.

Direct Procurement Outsourcing

involves engaging an outsourcing service provider to remotely manage the procurement of key raw materials and components critical for production processes.

Example: A consumer electronics manufacturer partners with an outsourcing company to build them a remote team of procurement specialists who can manage the sourcing of essential components like semiconductors and plastics. The outsourced team leverages global supplier networks to secure high-quality materials at competitive prices, ensuring a steady supply chain. 

Indirect Procurement Outsourcing

Involves hiring an outsourcing partner to manage the procurement of non-core goods and services such as office supplies, maintenance services, and IT equipment, which are essential for daily operations but not directly linked to production

Example: A financial services firm hires an outsourcing partner to build them a team of procurement specialists that remotely handle the acquisition of office supplies and technology equipment. These staff optimize procurement strategies to achieve cost savings and efficiency by tapping into extensive networks of suppliers and negotiating bulk purchase agreements. 

Purchasing Outsourcing

Involves hiring an outsourcing company to remotely carry out the purchase work, which includes placing of orders, negotiating with suppliers, and managing transactions

Example: A retail chain outsources their buying function to a service provider, who builds them a remote team of purchasing specialists with deep knowledge of how to achieve better prices from suppliers. In this way, the retail chain benefits from the advanced analytics and market knowledge the outsourced team brings to ensure the best inventory levels and maximize cost savings.

Vendor Management Outsourcing

Involves hiring an outsourcing service provider to manage supplier relationships, performance, and contracts

Example: A pharmaceutical company outsources the work of managing its vendors to a specialized firm to meet the regulatory compliance standards and enhance supplier performance. The outsourcing partner builds them a team of vendor management specialists with expertise in conducting regular audits and performance evaluations to ensure that all the suppliers meet the high demanding standards of the pharmaceutical industry.

Category Management Outsourcing

Involves hiring a third-party provider to manage specific spend categories through their expertise and optimize procurement and supplier performance within those categories

Example: A global food and beverage company outsources management of its packaging materials category to get better pricing and innovative solutions from suppliers. The outsourcing partner builds them a team of category management specialists who can remotely perform market analysis and leverage industry relationships to source sustainable packaging options, reducing costs for the company and improving its environmental footprint.

Top 5 Procurement Outsourcing Companies For SMBs

Looking to outsource your procurement process, but you don’t have large-scale operations? Below are some recommendations for SMB friendly procurement outsourcing companies with a track record for providing excellent outsourced procurement services.

KDCI Outsourcing

Based in Ortigas CBD, Philippines, KDCI Outsourcing caters to small to medium sized businesses of various industries, offering custom, cost-effective, and scalable procurement solutions. They specialize in building offshore procurement teams that can deliver end-to-end outsourced procurement services and deal with the reduction of costs and improvement of efficiency through strategic sourcing and vendor management.

Una

Located in Kansas City, Missouri, Una is the perfect fit for small to medium-sized organizations seeking group purchasing advantages. Their unique value proposition comes from leveraging group buying power to negotiate superior contract terms and pricing, which promises huge savings on procurement costs.

Dragon Sourcing

Headquartered in Shanghai, China, Dragon Sourcing serves small and medium businesses through sourcing from low-cost countries. They deliver in-depth market insight and access to a wide network of reliable suppliers, supplying products in a very cost-effective manner and ensuring quality.

Source One

Based in Willow Grove, Pennsylvania, Source One's differentiator among other procurement outsourcing services is that it specializes in the needs of the mid-market. By implementing strategic sourcing and category management, they are able to enhance supplier relationship management and improve clients' opportunities for cost savings and process improvement.

Proxima

Headquartered in the UK, Proxima specializes in procurement services for SMBs, driving value through strategic sourcing and procurement transformation. Their unique approach integrates market intelligence, expert negotiation, and process optimization to yield cost-effective solutions and enhanced procurement performance.

Outsource Procurement to the Philippines

Enjoy the benefits and avoid the pitfalls of procurement outsourcing by offshoring to the Philippines with KDCI.

At KDCI Outsourcing, we build dedicated procurement teams that are not only skilled in end-to-end procurement operations outsourcing, but are also a culture fit with your organization. This ensures they fulfill your requirements and can seamlessly integrate with your environment.

Learn more about offshoring your procurement to the Philippines. Contact us today!

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Outsourcing Guide
7 Reasons To Offshore Engineering Services to the Philippines
Learn about outsourced engineering and why companies offshore engineering services to the Philippines.

When companies want to scale operations that require technical expertise like engineering, they need to invest on overhead and commit long-term to building an in-house engineering team.

For most organizations, this is a high-risk investment that can be costly in the long run. As an alternative, more and more companies are considering outsourced engineering services to help improve their operational efficiency, while increasing cost effectiveness and maximizing profitability.

What Are Offshore Engineering Services?

Offshore engineering services involve a company enlisting a third-party agency or professional based in a different country to manage its engineering tasks rather than conducting them internally.

This business strategy is typically used by companies to leverage the engineering expertise of partner firms or specialists, as well as reduce costs, increase efficiency and flexibility, and manage engineering demands.

What Are Samples of Offshore Engineering Services?

Some of the most commonly outsourced engineering services include the following:

Civil Engineering

Involves designing, planning, and overseeing the construction and maintenance of building structures and infrastructure. It involves the application of tech tools like advanced simulation and project management tools to ensure projects are done sustainably, meeting regulatory requirements and aligning with business objectives.

Data Engineering

Involves developing, managing, and optimizing data pipelines to ensure data flows and storage solutions are efficient. This service also includes the implementation and maintenance of infrastructure for data generation, processing, and analytics. The goal is to help organizations leverage data for decision making and product development.

Software Engineering

Involves designing, developing, and maintaining software and apps to meet organizational requirements. This is done by using the latest programming methods and technology to create efficient, scalable, and innovative software solutions, that optimize operational efficiency and help with product development.

Tech Engineering

Involves providing tech support and involves troubleshooting, systems integration, and optimization of tech software, apps, and infrastructure. It requires a broad technical expertise, with the goal of solving complex tech problems, enhancing system performance, and enhancing tech operations.

Electrical Engineering

Involves designing, developing, and testing electronic systems and components to provide innovative solutions for electronic devices, systems integration, and power generation. The goal is to ensure reliability and efficiency, while meeting business needs.

Quality Assurance Engineering

Involves testing, auditing, and reviewing processes and workflows by developing QA protocols. Its objective is to enhance systems for ensuring reliability, efficiency, and adherence to quality standards.

Why Offshore Engineering Services To The Philippines?

With so many outsourcing destinations globally, the seven reasons below make the Philippines particularly appealing for outsourced engineering services. 

1. Cost Efficiency

Compared to its Western counterparts, the Philippines has significantly lower labor costs that companies can leverage to save up to 70% on operational costs. 

To illustrate, the average annual salary of a staff engineer in the United States is ~$99,330. Meanwhile, outsourcing a full-time engineering staff to the Philippines costs around ~$23,000 annually. This value already includes salary, benefits, equipment, infrastructure, training, and management, making it much more cost-effective.

Additionally, outsourcing engineering functions to reliable outsourcing partners with engineering expertise leads to operational efficiencies that help companies optimize their resources, and maximize cost-effectiveness for higher return on investment (ROI).

2. Engineering Expertise

The Philippines has a large pool of skilled engineering professionals. In 2022 alone, the Philippines had 123,872 civil engineers, 51,541 electrical engineers, and 78,678 mechanical engineers. And this number is growing year by year.

When companies outsource engineering processes to the Philippines, they can be certain that the offshore engineers they work with are certified, experienced, and vetted by their reliable outsourcing partner, thus, ensuring high-quality outsourced engineering services.

3. English Proficiency

The success of engineering outsourcing relies heavily on effective communication, smooth collaboration, and detailed documentation and reporting. As the Philippines is the 3rd largest English-speaking country in the world, and ranking 2nd for English proficiency across entire Asia, Filipino engineers serve as excellent extensions of in-house teams.

4. Cultural Compatibility

Effective communication and collaboration go beyond speaking the same language. There are also cultural nuances to consider. 

But because the Philippines was colonized by the United States for 48 years, Filipinos have long been exposed to American culture. This makes them more culturally aligned with Northern America, which helps Filipino engineers more easily integrate into organizations with Western cultures.

5. Government Support

A key benefit of outsourcing to the Philippines is the outstanding government support towards the business process outsourcing (BPO) industry. Some notable incentives to outsource include:

  • Tax incentives for foreign companies
  • Special economic zones (SEZs) and IT parks tailored for outsourcing companies
  • Laws and regulations on intellectual property rights, upholding of contractual obligations, and support of data privacy
  • Promoting the country as a global outsourcing destination
  • Investing in education and training programs to align with outsourcing demands, like engineering

6. Flexible Service Offerings

When outsourcing to the Philippines, companies can choose from multiple engagement models to match their engineering demands. 

The most common service offerings come in full-time equivalent (FTE) model, project-based model, and retainer model. These options accommodate the varying needs of companies, allowing them to only acquire the services they need, which helps them maximize cost-efficiency.

7. Time Zone Advantages

The Philippines is located on the other side of the world from Northern America; while it's night in the US, it’s day in the Philippines. This difference in time zone provides a significant advantage for companies that need around-the-clock or after-hours operations. 

Top 8 Companies For Outsourced Engineering Services (Philippines)

Ready to outsource engineering to the Philippines? Below are the most recommended engineering outsourcing companies you can partner with to build your offshore engineering team.

KDCI Outsourcing specializes in building offshore engineering teams in various engagement models, focusing on seamlessly integrating with your operations, while also emphasizing cost-effectiveness and innovation. They’re ideal for medium-sized companies needing flexible, integrated engineering support without the overhead of a full-time staff.

Emapta focuses on creating dedicated teams for engineering services, ensuring clients have full control and direct communication with their outsourced staff. Their ideal for businesses looking to scale rapidly while maintaining management control over outsourced engineering teams.

Microsourcing offers specialized engineering services with a focus on cutting-edge technologies and industry-specific expertise, particularly in software and IT. They suit technology startups and established firms looking to innovate and accelerate development cycles.

Outsourced provides high-quality engineering outsourcing services with emphasis on maintaining stringent quality standards and delivering high-performance results. They are recommended for companies in industries like construction and manufacturing that demand precision and reliability.

Sourcefit offers cost-efficient engineering outsourcing solutions, focusing on customizability and client-centric strategies to match specific business needs. They make a great choice for cost-conscious small to mid-sized enterprises looking to optimize their engineering processes without compromising quality.

Outsource-Philippines offers a comprehensive approach to engineering services, combining quality, efficiency, and scalable solutions. Ideal for businesses across various sectors that require flexible and efficient engineering support to complement their growth.

KamelBPO focuses on providing value-driven engineering outsourcing services with a commitment to sustainability and ethical business practices. Their ideal customers are environmentally conscious companies looking for responsible engineering solutions that align with green practices.

Satellite Office excels in providing premium, bespoke engineering services for high-stakes projects requiring exceptional precision and expertise. They cater to large corporations and high-end firms in fields like aerospace and advanced electronics, where precision and expert skills are paramount.

Offshore Engineering to the Philippines

Leverage the benefits of outsourcing to the Philippines when you outsource these offshore engineering roles.

At KDCI Outsourcing, we empower global brands by building them dedicated offshore engineering teams that can help them design, develop, and improve structures, processes, and workflows to solve their problems and meet their requirements.

Learn more about outsourced engineering services

Contact us today!

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Design & Marketing
Top Outsourcing Agencies For Filipino Multimedia Designers
Discover why companies offshore their creatives to the Philippines, and find a list of agencies for hiring a Filipino multimedia designer.

How do you find a skilled and reliable multimedia designer who meets your requirements and fits your brand? With thousands of designers to choose from, the process of sourcing, screening, and hiring can easily get overwhelming

To avoid this daunting task, many companies choose to outsource their creative work to third-party service providers, especially to agencies in the Philippines, not only to streamline the hiring and onboarding process, but also to reduce costs and ensure quality.

Why Outsource Multimedia Design To The Philippines?

There are plenty of reasons to outsource to the Philippines, making it a top outsourcing destination for multimedia. The top reasons include lower labor costs, large pool of creative talent, and high English proficiency.

Being a developing country, the cost of outsourcing to the Philippines is up to 70% lower than those in Northern America. This provides a great opportunity for companies to reduce overhead costs and increase profitability.

Also, the Philippines is a hotbed for skilled professionals, particularly in the creative industry. There are hundreds of colleges and programs specializing in design and supporting the arts. Not to mention, the government supports the arts through various initiatives and accreditation standards, ensuring high-quality education and training for all designers and artists.

Lastly, among Asian countries, the Philippines is the second most proficient country when it comes to English communication. With no language barriers with English-speaking clients, Filipino designers are very well positioned in translating client vision into beautiful designs.

Top Multimedia Outsourcing Agencies For Various Business Needs

Looking for a multimedia designer you want to work with in the Philippines can be a very long and arduous process. That’s why it’s easier to outsource to a company or agency that will do most of the heavy lifting for you. 

Below is a list of outsourcing companies and design agencies that caters to various businesses, industries, and needs to help point you in the right direction.

1. KDCI Outsourcing

A leading outsourcing company established in 2011, KDCI Outsourcing specializes in creative design outsourcing. Their mission is to empower global brands by building the best offshore teams from the Philippines, providing best-in-class multimedia services that bring results.

Each multimedia designer at KDCI Outsourcing is skilled at graphic, audio/video editing, and animation, and are proficient in tools such as Adobe Creative Cloud, Autodesk Maya, and CoreIDRAW Graphic Suite. These allow them to create diverse and engaging multimedia content that enhance the digital presence and improve user engagement for clients.

For companies with varied or changing design requirements, who are looking to scale their operations, but are looking for a tailored solution where everything is done for you, KDCI Outsourcing is a great choice. They tailor outsourcing solutions to each client to ensure a great fit, and the biggest benefit of working with them is they do everything for you.

2. 7th Media Digital

A full-service digital development and production company in the Philippines, 7th Media Digital specializes in creating high-impact designs using cutting-edge IT solutions to support digital campaigns. They offer a diverse range of multimedia services ranging from explainer videos all the way to e-learning.

They have an in-house team of multimedia artists who are skilled at various aspects of design, including graphic design, audio/video editing, and animation. They are also proficient in industry-standard multimedia tools and use their technical skills to provide diverse multimedia solutions to meet their clients’ requirements.

For those looking to hire offshore multimedia artists, especially for specific web-related projects, 7th Media Digital is a good choice. Their extensive experience with IT solutions and web design allows them to tailor their multimedia content, enhancing the overall web experience.

3. Creative Pool

Creative Pool is an outsourcing company that connects companies with creative professionals. They link you with creative agencies, freelancers, and employees so you can find the best designer for your needs. 

With thousands of creative professionals in its database, you can use their website’s search function, you may select multimedia designers based on skill level, type of employment, and other filters. 

The benefit of working with Creative Pool is you can find both agencies and individuals in their database. This flexibility is great for those who are not yet certain about their design requirements and would like to explore both options. And with their large pool of profiles to choose from, it’s easy to find very specific skills and background that you’re looking for.

4. Online Jobs

Online Jobs is a virtual marketplace that helps you find creative talent through their website. Companies can find skilled Filipino freelancers, including multimedia designers, based on their preferences. 

Among the many creative roles they have available, they have a large variety of multimedia artists’ profiles you can choose from. You can also select the specific multimedia skills you require when searching for the designer you want to hire.

Because of this wide selection, you can find a freelancer who can perform multimedia tasks for you at different rates and work arrangements. A great benefit to working with Online Jobs is they allow you to create posts on their job board, which simplifies the search process.5

5. Remote Staff

Remote Staff is a Philippine-Australian outsourcing agency that connects you with professionals, including multimedia designers. Their website displays various profiles, with their specific set of skills, level of proficiency, and even a short audio introduction.

The multimedia designers in Remote Staff cover a wide range of skills and expertise. Moreover, with their profiles and CVs clearly accessible online, it’s easy to screen candidates before committing to work with them.

As an Australian-owned agency that caters to entrepreneurs, Remote Staff is a great option for individual entities or SMBs in Australia looking for a handful of remote multimedia designers. You can pore through their wide range of profiles till you find the ones you want to hire, and they provide after-hire support to help make sure your remote hires smoothly integrate with your environment.

6. August 99

August 99 is a full-service digital agency that is known for its comprehensive multimedia design services. They cater to IT, BPO, and fintech companies, and offer various creative solutions, and can support various digital initiatives.

Their multimedia designers are excellent at both illustration and visualization skills. They can create designs for both online media and print. Moreover, they’ve worked with a variety of industries, making them well-prepared to support any client in their creative endeavors.

For companies in the IT, BPO, and Fintech industries looking for multimedia designers to augment their digital marketing teams or efforts, August 99 is a great choice. As they specifically cater to these industries, they have excellent experience and skills that in-house teams may lack.

Choosing Your Multimedia Outsourcing Agency

It would be great if there’s fixed criteria you can use to select the best outsourcing agency for you. However, there is no one-size-fits-all answer. Sometimes, you need to sit down and discuss your requirements with each outsourcing vendor to discover whether you’re a great fit with them. To help simplify this process, below is a list of factors you should consider in your search

Design Expertise

When choosing an outsourcing agency to work with, it’s important to look for their expertise in multimedia. Does the company have a portfolio for past multimedia projects? How about case studies to showcase the success of said projects?

Target Market

Another thing to consider is the clientele of the agency. Some agencies specialize in multinational organizations, while others cater to SMBs or professionals. Some cater to clients from various industries, while some specialize in a handful of industries like IT and business services. These factors influence the types of contracts offered by the agency, and is also an indication of their capacity, letting you know whether they can easily meet your demands or not.

Target Industry

You should also look at the industry they specialize in. Are they a generalist agency, offering all kinds of services so you can outsource multimedia along with other services? Or are they an agency that specializes only on multimedia design and creative services? Depending on your need, whether you plan to outsource other functions or not, this can be an important consideration.

Level of Control

Lastly, how much control do you wish to have when outsourcing? Some agencies do all the work for you, offering end-to-end service. This means you only tell them your requirements, and they’ll handle everything from sourcing to onboarding, and even management. Meanwhile, there are agencies that let you have greater control. You can look at profiles and shortlist candidates yourself, and once onboarded, they are virtually your employees whom you manage.

Outsource Your Multimedia With Ease

Why spend days and weeks finding the multimedia designer that fits your requirements when you can partner with KDCI and we’ll do it all for you?

KDCI Outsourcing knows that you want to simplify your outsourcing process. That’s why when you build your team with KDCI, we handle everything from finding the right person to onboarding them so you can start working with them as soon as possible. We’ll source and vet candidates based on your requirements, train them on your brand, and onboard them so they can seamlessly integrate with your organization. 

Interested in outsourcing your creative work to KDCI? 

Check out our creative portfolio or contact us to learn more!

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Outsourcing Guide
Philippine Outsourcing Statistics You Should Know in 2024
Learn about the state of Philippines BPO with the latest outsourcing statistics and emerging trends for 2024.

The Philippine Outsourcing industry has grown steadily and gained international recognition in recent years. As we step into 2024, it's clear that the industry is thriving due to technological advancements, government incentives, and a diverse workforce. 

From offering traditional call center services, Philippine BPO has come a long way, now offering services in IT, finance, healthcare, and creative services. It has also since grown in market share, and is one of the fastest-growing BPO markets available today.

A Quick View of Philippine BPO in 2023

The best way to understand the state of Philippine outsourcing is by looking at the latest data. Below is an industry report containing the latest Philippine outsourcing statistics that will shape the BPO industry in the Philippines in the coming years.

Continuous Rise in Market Value

The Philippine BPO industry is a rapidly growing market. With APAC as the fastest-growing market in global outsourcing, and the Philippines as one of the countries leading this development, the latest outsourcing statistics project that the Philippine BPO market, which was worth $35.4 billion in 2023 will grow to $37.87 billion in 2024 with a 7% CAGR.

With this steady growth, Philippine BPO, which contributed to the 6-7% growth in the Philippines services sector, is likely to continue driving economic growth for the country in the coming years.

English Proficiency & Skilled Labor

There are approximately 350,000 Filipino college graduates each year. This makes the Philippines a competitive outsourcing destination, with a larger pool of suitable labor for multinational companies compared to other developing countries.

Bar graph of English Proficiency Scores (Top 5 in Asia for 2023)

The Philippines is the 3rd largest English-speaking country in the world. Also, based on the 2023 Global Ranking of Countries and Regions on English Proficiency, the Philippines ranked 20th globally for English Proficiency with a score of 578, indicating high English proficiency. In Asia, the Philippines ranked 2nd for English Proficiency, coming after Singapore who has a score of 678.

Cost of Labor

Bar Graph of average Monthly Salary in USD of the top 5 outsourcing destinations in Asia

The average cost of labor in the Philippines is lower than most other outsourcing destinations in APAC. According to this report by Numbeo, the average monthly salary in the Philippines in USD is $373.83, while it’s $621.74 in India, $853.47 in Malaysia, $923.21 in China, and $4,401.5 in Singapore.

Philippine Outsourcing Rankings by Industry-Sector

Philippine Outsourcing Rankings by Industry

Based on the 2023 data gathered by KDCI Outsourcing, the largest industry that outsources their business processes to the Philippines is Design & Marketing with a 30% market share. This is followed by Retail & E-commerce with 14% market share, Consulting & Business services at 11%, tech & IT at 9%, health services at 8%, and finance & accounting at 6%.

Most Outsourced Business Processes in the Philippines (2023)

Pie Chart of the most outsourced business processes in the Philippines (2023)

In a 2023 survey of 143 companies interested in outsourcing to the Philippines, KDCI Outsourcing found that 39.2% were looking to outsource customer service, making it the most in-demand outsourced business process. Among customer service processes, the most in-demand are voice-related services such as phone support.

Next is design & marketing services, at 37%, followed by E-commerce services at 16.1%, finance & accounting services at 3.5%, and lastly, back office functions at 1.4%.

Philippine BPO By Geo-location

Pie Chart of Philippine BPO by geo-location

The largest BPO population in the Philippines is in Metro Manila, the capital of the Philippines. Meanwhile, 30% of BPO workers are based outside of Metro Manila. Within Metro Manila, majority of BPOs are based in central business districts like Ortigas Center in Pasig, Eastwood City in Quezon City, Bonifacio Global City (BGC) in Taguig, and Makati.

After Metro Manila, the city with the largest BPO population is Cebu City, followed by Clark Freeport Zone, Davao City, Bacolod City, and Iloilo City, respectively.

Philippines: A Leading Global Outsourcing Destination

The Philippines holds 10-15% of the global BPO Market. Also, over 1.3 million Filipinos are employed in over 1000 BPO companies. This makes the Philippines the 2nd leading outsourcing destination globally, with driving factors such as high English proficiency, excellent customer service, BPO-friendly infrastructure, and cultural affinity to North-American culture.

Globally, the Philippines ranks 4th as the most financially attractive outsourcing destination.

In Asia, the Philippines is 1 of the 3 most prominent contributors to the growth of APAC for IT Outsourcing. 

Biggest Philippine Outsourcing Trends In 2024

While outsourcing statistics give a snapshot of the state of Philippine BPO, it doesn’t paint a picture of its future. To help with this, KDCI Outsourcing industry experts with decades of BPO experience provide input on the likely developments for BPO in the Philippines.

Technological Integration

2023 saw the boom of automation. Tools like robotic processing automation (RPA), AI, and cloud computing are transforming the way we work, with many companies now utilizing some form of AI to optimize their workforce, and many more are looking into streamlining their business services using AI. 

For BPO companies in the Philippines, this means embracing technological advancements and adapting quickly to the evolving digital landscape in order to meet the changing needs of their clients.

Upskilling

As BPO in the Philippines adopts technologies that would streamline business processes, roles in BPO that engage in repetitive work like data entry, customer service, and other back-office functions will be displaced in the coming years.

However, this transformation also brings new opportunities, as businesses will need employees skilled in managing and overseeing automation technologies like RPA and AI, handling more complex problem-solving tasks, and providing higher-level strategic analysis. 

Consequently, BPOs will invest in upskilling their workforce to fill these new roles, ensuring staff can navigate tech integrations effectively and maintain competitiveness in an evolving market​

New Business Models

WIth the evolving nature of business services comes new business models. Traditional FTE-based business models that have dominated the Philippine BPO industry for decades will soon be replaced by more flexible volume-based models.

For organizations that outsource, this means greater flexibility, more control over cost, and higher scalability. These will help future-proof businesses to adapt to rapidly changing business demands.

Flexible Work Setups

After Covid-19, 70% of Philippine BPOs have already implemented some form of remote work arrangement, while 50% considered hybrid setups. Such flexibility brought forth benefits such as cost savings, enhanced productivity, and ability hire from a larger talent pool.

Given the volatility of the current economy, companies are looking for low-cost options that would help them remain competitive. As such, this trend is likely to continue moving forward, with BPO companies becoming increasingly more flexible in their work arrangements. 

Outsource to the Philippines

As seen in the 2023 Philippine outsourcing statistics and outsourcing trends, 2024 will likely see continuing growth for the Philippine BPO industry, with rapid developments in technology shaping the way outsourcing companies operate their businesses and stay competitive in a large BPO market.

Cost reduction, English proficiency, and a large skilled workforce will continue to drive business into Philippine BPO and more Filipino talent will be joining the outsourcing industry to meet the growing demand in the industry.

In order to remain competitive, more and more companies are turning to outsourcing for low-cost and low-risk solutions. Here are the top BPO companies in the Philippines with excellent track record of providing high quality outsourcing services.

Do you want to learn more about outsourcing to the Philippines? Contact us today!

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Outsourcing Guide
Why The Philippines Is A Top Choice For IT Outsourcing
April 29, 2024
Discovery what makes the Philippines an ideal destiination for IT Outsourcing: sustained growth of IT industry, data privacy & security measures, and more!

IT Outsourcing is one of the most lucrative industries in the Philippines, with many investors around the globe building their offshore IT operations in the country in recent years. 

And with the global IT Outsourcing industry estimated to grow 5.48% annually from 2019 to 2029, the Philippines, with its large pool of IT professionals and government incentives, is strategically positioned to grow in the next decade.  

Top Reasons Why You Should Outsource IT Services to the Philippines

The growth of IT Outsourcing in the Philippines can be attributed to many things, the most relevant of which are discussed below. 

Sustained Growth of the IT Industry

The Philippines is considered one of the providers of high quality information technology services since the early 1990s. While the Philippine Outsourcing industry initially started with voice BPO services, it quickly expanded its offerings to IT services, which now include software development, web design, tech support, and more. 

In fact, the Information Technology-Business Process Management Association of the Philippines (IBPAP) predicted a 7% growth in the Philippine IT BPO industry in 2024. 

Large Pool of IT Professionals

The Philippine workforce has a large pool of IT professionals ready to meet the rising demand of IT Outsourcing. As a matter of fact, there were 77,747 IT graduates from state universities and colleges in the school year of 2017-2018 alone. 

With such a large number of tech-savvy graduates, global companies will not have a hard time filling IT roles of varying levels of complexity. As such, even Fortune 500 companies like Google, IBM, Amazon, and Microsoft have offshore IT operations in the Philippines. 

Data Privacy & Cybersecurity Measures

The most pressing concern in IT Outsourcing today is security and privacy. 

In 2023, the FBI reported an all-time high loss of $12.5 Billion due to internet crime. Meanwhile, Deloitte’s 2024 cybersecurity trends report shows that 66% of organizations were affected by ransomware in 2023, misuse of valid credentials led to 44.7% of data breaches, and IoT malware attacks have increased 400% across industries.

To equip Philippine outsourcing companies against these cyber threats, the Philippine government passed the Data Privacy Act of 2012 , a law that aims to protect individual privacy while ensuring the free flow of information to promote innovation and economic growth. In the first quarter of 2024, they also approved the National Cybersecurity Plan 2024-2029, which outlines policy direction and operational guidelines to enhance cybersecurity measures. 

With these safety measures in place, companies can safely rely on Philippine IT Outsourcing companies to handle their sensitive and confidential data.

High Proficiency in the English Language

While there are many IT Outsourcing destinations like India, Poland, and Malaysia, the Philippines remains competitive due to its high English proficiency, a great asset for smooth communication. 

Filipinos are exposed to the English language at a young age and next to Singapore, the Philippines has the highest English proficiency among Asian countries, making it the top choice for sourcing English-speaking IT professionals.

Lower Cost of Labor

A huge driving force behind the rise of IT Outsourcing in the Philippines is due to its lower cost of labor. Due to the country's comparatively low cost of living, operational costs tend to be much cheaper than those in Western countries. 

For example, 2024 data shows that the average junior IT professional in the Philippines costs approx. $555/month, whereas it costs $7,009/month in the United States. 

Though there are added costs to outsourcing, such as government mandated benefits, hiring costs, and other operational costs, the total cost to outsource is still significantly lower, allowing companies to save up to 70%.

24/7 Service Availability

Another factor that urges Western companies to outsource their IT service to the Philippines is due to their flexibility in terms of work hours and timezone differences.

Because companies require coverage for multiple shifts, it’s become a standard practice for outsourcing companies to have various shift schedules to accommodate the client’s preferred time zone. This benefits the client as they can work with offshore teams as if they were just next door.

The opposite can also be true. While some organizations favor real-time collaboration, some require off-hours work. In these situations, companies choose to outsource functions that require round-the-clock work to countries on the other side of the globe, like the Philippines.

Cultural Compatibility

Colonized by the United States for 48 years, the Philippines has grown accustomed to Western culture, and has adapted it in various areas of their everyday life. Such similarities in culture make it easier for Filipinos to acclimate to Western organizations and culture, making the Philippines an ideal location for building offshore teams for international enterprises. 

Outsource Your IT To The Philippines

There are numerous reasons why global companies want to outsource IT services to developing countries like the Philippines. Whether you’re looking to cut costs, find hard-to-source IT expertise, or optimize your IT operations with an offshore team, KDCI Outsourcing can help you achieve your business objectives.

At KDCI, we build excellent outsourced IT teams with more than the specialized IT roles you’re looking for; we find you people with the right skills and attitude to seamlessly integrate with your organization, ensuring smooth onboarding, minimal disruptions, and maximum productivity.

Learn more about how you can build your offshore IT team in the Philippines.

Contact us to learn more!

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Design & Marketing
Why Work With An Offshore Graphic Artist From the Philippines
Explore the advantages of outsourcing graphic design to the Philippines: cost effectiveness, flexibility, design expertise, and more.

The first thing you see on this web page is probably the image above. This is because people are more drawn to pictures than words. This may also be why visual ads are found to be 43% more effective in making audiences do a certain action.

No wonder brands are investing so much in visual content in 2024. Captivating graphics and engaging videos dominate content creation today, and companies need to keep up to remain competitive. This is also why more and more companies are hiring graphic artists to handle their creative work.

Why Outsource Graphic Design To The Philippines?

Not everyone can build their own design team or hire an in-house designer. Luckily, nowadays, most brands don’t have to! Many of them choose to outsource graphic artists rather than maintain their own creative team. Below are some of the reasons why.

Cost Effectiveness

A common reason why brands choose to outsource processes like graphic design is because of costs. 

Labor costs in developing countries are a fraction of those in countries like the United States, UK, and Australia. For reference, hiring a full-time graphic designer in the USA costs about $4,250/month while hiring the same in the Philippines starts at less than $500/month (as of April 2024). 

This significant difference in costs allows outsourcing companies to offer offshore talent, inclusive of management fees, benefits, and other hidden charges, at a competitive rate. Given the additional services that come with it, outsourcing becomes an appealing option for most businesses.

Flexibility

Another reason to choose outsourcing over in-house hiring is flexibility. When you hire in-house, you’re likely hiring someone full-time, which is great if you have a steady volume of designs that need to be created. Otherwise, hiring a full-time designer is not the best financial decision.

On the other hand, outsourcing gives you the option to select from or combine multiple outsourcing service models depending on your business needs.

If your only reason for outsourcing is to reduce labor costs, you can go ahead and hire an FTE or full-time equivalent/employee. But if you have low volume of regular design work needed, you can opt for a retainer-based model where the scope of work, number of hours, and deliverables are flexible. Lastly, if you only need a designer to do one project, then you can choose project-based outsourcing and pay for the design services for the fixed project duration.

By offshoring creative design, a company can save thousands of dollars a month, which can be reallocated either to more projects or to other functions like marketing or product development, which can generate more sales. 

Design Skills

The Philippines is renowned for its pool of skilled and professional graphic designers with vast experience in design and design software. This is why brands like Nike, Apple, Canon, and many more would hire Filipino graphic artists.

Ultimately, brands trust the quality of the creative work Filipino designers produce, and the best way to gauge their skills is by looking at their work!

Less Pressure

41% of companies outsource because of a lack of skill or specialization. Why risk expensive and time-consuming trial and error with your own graphic designer or in-house graphic design team when you can outsource and leave it to the professionals?

By outsourcing to the top graphic design firms in the Philippines, you take the pressure off your team to produce high-quality and on-brand art works, while enjoying world-class graphic design.

New Perspective

When it comes to creative work, perspective can make a world of difference. That’s why it’s good to have a set of fresh eyes looking at your design projects. 

When you work with an offshore graphic artist, you are exposed to different kinds of designers with different styles, philosophies, and perspectives. They can share new techniques, skills, and even assets that would help enrich your portfolio as a brand.  

How to Outsource Your Next Graphic Designer?

If you think outsourcing graphic design is for you, learn more about the steps you should take to ensure you find the right graphic designers who fit your needs.

1. Determine Your Requirements.

Before you reach out to outsourcing companies and graphic design firms, prepare a detailed plan with clear scope of work, deadlines, and deliverables. What kind of design work do you need – graphic, web, UX/UI, or multimedia? How much work do you need to get done? When will you need the final output? 

2. Look For A Graphic Design Outsourcing Company.

Once you’re clear on what you need, shortlist top graphic design outsourcing firms whose portfolios appeal to you. Besides the portfolio, look at the company’s credibility – who were their past clients? What scale were their past projects? Do they have case studies from brands similar to yours? These are great questions to ask when choosing which companies you want to work with.

3. Align Expectations.

Meet with outsourcing agencies and look into graphic design roles you can outsource with the agency to see if they can meet your needs. Discuss expectations, service level agreements (SLAs), and key performance indicators (KPIs), as well as your preferred service model, contract duration, and costs. 

4. Try Working Together.

Like any good relationship, it’s good to have a trial period where you test out whether you work well together or not. A graphic artist can be incredibly talented, but if you don’t mesh well or if they can’t integrate well into your organization, you’re unlikely to be very productive.

Working with an agency with contingency plans in case a particular designer doesn’t work out is a good sign that they care more about finding you a designer that fits you, rather than just being out to get your money.

5. Provide Constructive Feedback.

Whenever you work with designers, it’s vital to give as clear a feedback as you can, so the design process will go smoothly. Communicating your vision, and providing constructive criticism rather than vague opinions can help your designer better understand what you want, and bring your ideas to life beautifully. 

The same goes for your outsourcing partner. Talk to your agency and make sure you’re always aligned with your objectives so that you can work seamlessly as a team, regardless of location.

Hire A Graphic Artist From The Philippines

If you are looking to hire an outsourced graphic artist that fits your needs, only work with reputable outsourcing companies like KDCI, with an outstanding design portfolio.

At KDCI, we believe that the right people with the right qualifications and attitude, make all the difference when it comes to outsourcing success. When you build your offshore team with us, you can rest assured that your offshore graphic artists will integrate with your in-house organization seamlessly, for smooth collaboration.

Interested to outsource graphic design in the Philippines?

Contact us to learn more!

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Offshore Staffing
Remote Work Advantage: Achieving Flexibility with Accountability thru Outsourcing
Work from anywhere & crush your goals! This blog unlocks the secrets of remote work: flexibility without sacrificing results. Learn how to thrive in a remote work environment.

Remote work has fundamentally transformed how we collaborate. Gone are the days of rigid schedules and office cubicles. Today's workforce enjoys unprecedented flexibility, crafting routines and work styles that empower them to thrive in their work from home jobs.  For employers, remote work unlocks a global talent pool, attracting world-class individuals regardless of location.

However, this newfound freedom comes with challenges. To ensure a win-win scenario, both employees and managers need to strike a delicate balance between flexibility and accountability. This article explores the 5 Cs – a framework for achieving this harmony in your remote team.

The 5 Cs: Building Trust and Productivity

The first three Cs focus on fostering flexibility, while the last two address accountability.

1. Common Vision - United We Stand

A shared vision eliminates the need for micromanagement. When everyone rallies behind the same goals, detailed instructions become unnecessary.  Imagine a team focused on developing a revolutionary product. They understand the company's vision and the impact they're striving for. This shared purpose empowers them to navigate independently, constantly moving the project forward.

Building this common vision starts with instilling company values at the outset. Transparency about the organization's core beliefs allows employees to integrate them into their work.  Is your brand synonymous with exceptional customer service, or are you known for pioneering innovation? Is environmental sustainability a core value, or is a relentless focus on the bottom line your driving force?

By clearly communicating your company's identity, you empower employees to make independent decisions aligned with the organization's goals.  Take Patagonia, for example. This outdoor apparel company is renowned for its commitment to environmental responsibility.  Remote employees at Patagonia understand this core value and can actively seek out sustainable materials or advocate for eco-friendly packaging solutions, even while working from their home offices.

2. Clear Policies and Outcomes - Setting the Ground Rules

Before launching your remote workforce, establish clear policies that define the "rules of the game."  A comprehensive handbook serves as a reference point, outlining expected behavior and performance standards.

Crucially, the handbook should detail how performance will be measured. This includes defining output quotas and productivity levels for each role.

For example:

  • A Sales Representative might be expected to conduct 30 customer interactions daily and secure 5 new accounts per month.
  • A Content Writer's target could be 4 high-quality articles per week, each exceeding 1,000 words and adhering to specific SEO best practices.

By establishing clear quotas, you can move away from micromanaging and empower employees to manage their work hours. Remember, quotas should be realistic, measurable, and aligned with the company's overarching goals.  Additionally, consider incorporating quality metrics alongside output quotas.  In the content writer example, this could involve tracking reader engagement metrics or factoring in positive client feedback on the articles' clarity and effectiveness.

3. Clear Communication - Bridging the Distance

Remote work eliminates the daily office routine, creating a communication challenge for teams accustomed to face-to-face interaction.  To ensure smooth information flow,  develop a communication playbook outlining best practices for interaction.

This playbook should address questions like:

  • Appropriate communication etiquette (e.g., email formality vs. instant messaging for quick questions).
  • Preferred communication tools for different tasks (e.g., project management software for larger initiatives, video conferencing for brainstorming sessions).
  • Reporting mechanisms for remote employees.
  • Progress updates for managers – how often, and through which channels?
  • Team meeting frequency and platforms – consider incorporating a mix of synchronous (live) and asynchronous (recorded) meetings to cater to diverse time zones.
  • Team check-in schedules – establish regular touchpoints to maintain momentum and address any concerns.
  • Procedures for technical issues, outages, or emergencies – clear guidelines ensure everyone knows how to respond effectively in case of unexpected disruptions.
  • Communication protocols when unforeseen circumstances prevent work – establish a system for notifying managers and delegating tasks, if necessary.

By proactively addressing these questions, you foster a positive work environment. Establishing clear boundaries allows everyone to operate effectively within the defined framework. Additionally, consider fostering a culture of open communication. Encourage employees to ask questions, share ideas, and raise concerns. This not only promotes transparency but also fosters a sense of psychological safety, where team members feel comfortable taking risks and learning from mistakes.

The Cs of Accountability: Maintaining Momentum 

The next two Cs focus on maintaining accountability within the established framework of flexibility to ensure work life balance.

4. Comment & Commend - Feedback is Key

You’ve equipped your team with the game plan, the rules, and the boundaries. Ideally, they'll run smoothly on autopilot. But the reality is, bumps in the road are inevitable.  Quotas might be missed, work quality may occasionally fall short, and deadlines might slip. When these issues arise, address them promptly and consistently.

Here's how to deliver effective feedback in a remote setting:

  • Focus on Specifics: Avoid vague statements like "That report needs work." Instead, pinpoint specific areas for improvement. For instance, "The data analysis in the Q3 report seems incomplete. Can you revisit section 2.1 and ensure all relevant data points are included?"
  • Timeliness is Key: Address performance issues as soon as they arise. Don't let them fester and create confusion.
  • Strike the Right Tone: Maintain a professional and constructive tone. Focus on solutions, not blame. Frame the discussion as a collaborative effort to improve future performance.
  • Positive Reinforcement is Powerful: Don't just point out shortcomings. Celebrate achievements as well! A simple "Great job exceeding your sales target this month!" or "That client presentation was exceptional!" goes a long way in motivating employees and fostering a culture of recognition.
  • Consider Asynchronous Feedback: In a remote environment, consider offering written feedback alongside verbal conversations. This allows employees to revisit the feedback at their convenience and take concrete steps towards improvement.

#5: Capitalize on Technology - Tools for Transparency

Trusting your team doesn't mean relinquishing all control. Technology empowers managers to tailor their level of engagement based on factors like project type, seasonality, and individual team members.

There's a vast array of tools that allow you to monitor progress and maintain a level of oversight – from tracking screen activity and keystroke monitoring to project management software and time tracking applications.

The key is to leverage technology strategically. Don't fall into the trap of constant monitoring. Instead, use these tools to gain insights into workflow, identify potential roadblocks, and provide targeted support when needed. Remember, the goal is to empower your remote team, not micromanage them.

By embracing the 5 Cs – Common Vision, Clear Policies & Outcomes, Clear Communication, Comment & Commend, and Capitalize on Technology – you can foster a thriving remote work environment. This approach fosters trust, empowers employees, and lays the foundation for a successful and productive remote team.

At KDCI Outsourcing, we don't just connect you with remote professionals – we help you build cohesive, high-performing teams that seamlessly extend your existing workforce. Imagine having a global pool of talented individuals at your fingertips. We leverage this vast network to find the perfect fit for each role, from virtual assistants and graphic designers to social media managers, web developers, accountants, customer service, and sales.

But here's the real difference: We go beyond skills matching. We focus on building a team culture that integrates seamlessly with yours. Through in-depth consultations and cultural assessments, we ensure your remote team members become an extension of your in-house team, fostering collaboration and clear communication from day one.

Partner with KDCI Outsourcing and experience the power of a truly unified remote team. Let's discuss how we can help you build your dream team – a team that feels like an extension of your own. Contact us today!

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Design & Marketing
7 Product Photo Background Picks of 2024 for Captivating Images
Learn how the right product photo background boosts appeal and brand identity with 2024's top seven picks for various photography needs.

Selecting the ideal product photo background is critical for enhancing product appeal and reinforcing brand messaging. This guide spotlights seven effective backgrounds that cater to assorted photography styles and needs in 2024. Navigate through options like seamless paper, vinyl, natural settings, and digital backdrops, and empower your product imagery with choices that speak directly to your target audience.

Key Takeaways

  • Backgrounds in product photography can make or break your shots, with color, texture, and pattern playing critical roles in influencing customer perception and sales.
  • Different backdrop materials like seamless paper, vinyl, and natural elements offer distinct advantages depending on the shoot requirements—paper for uniformity, vinyl for durability, and natural elements for authenticity.
  • DIY backdrop solutions offer a budget-friendly alternative for photographers, allowing for creativity and resourcefulness with household items to achieve professional-looking results.

Choosing the Right Background for Your Product Photos

Product photography background with color theory

Selecting the right background isn’t merely a matter of aesthetics. It plays a paramount role in product photography as it can significantly influence customer perception and ultimately drive sales. From seamless paper to vinyl backdrops, natural elements to digital backgrounds, the choices are diverse, each serving different purposes in product photography, from creating uniform e-commerce listings to enhancing creative ads and branding.

To make an informed choice, we will dissect the intricacies of color, textures, and patterns, and the contrast between solid and gradient backgrounds, using relevant data in our next discussion on styles.

The Role of Color in Product Photography

Color wields immense power in product photography. Each hue carries psychological impacts that affect consumer emotions and behaviors. For instance, red is often associated with excitement, while blue instills a sense of trust. Leveraging color theory can enhance a product’s attributes, creating visuals that are either harmonious or dynamic, depending on the use of analogous, complementary, or triadic color schemes.

The choice of background color is critical, as it can either enhance or distract from the product features, thereby influencing customer perception and sales. Thus, choosing colors that prevent the transmission of unintended messages or emotions is of paramount importance. Colors can be strategically utilized as backgrounds to serve as either a vibrant contrast or a complementary backdrop that ties in with the product or brand’s color palette.

Textures and Patterns: Adding Depth to Your Images

Textures and patterns for product photography

While colors play a pivotal role in product photography, textures and patterns are equally significant. Using textures can emphasize product details and create a tactile sensation that enhances visual storytelling. Textured backgrounds evoke emotions and feelings - soft textures might convey warmth, while rough surfaces could suggest ruggedness.

Different textures can convey various atmospheres or moods, like cozy knit patterns or sleek metallic surfaces. Natural light can create gentle gradients on textures, while diffused artificial light can highlight the details of a textured background. Moreover, patterns and shapes can add playfulness and character to photos while maintaining focus on the product.

Solid vs. Gradient Backgrounds: Which to Choose?

The choice between solid and gradient backgrounds often depends on the specific requirements of your photography. A gradient background features a color transition, potentially creating a dynamic or elegant visual effect. These backgrounds can be obtained from backdrop suppliers or crafted in post-production to match specific aesthetic requirements.

On the other hand, a simple gradient background effect can be achieved in-camera by using studio lights to create a subtle halo around the product.

Creating a Professional Look with Seamless Paper Backdrops

Professional look with seamless paper backdrop

Seamless paper is a favorite among professional photographers, lending itself to various genres, including:

  • fashion
  • beauty
  • children’s portraits
  • product photography

Its wide adoption is due to its versatility, as using studio lighting with seamless paper allows for consistent results and accommodates any photoshoot schedule, independent of natural lighting conditions.

Moving ahead, our discussion will cover how to set up your paper backdrop and preserve its immaculate surface.

Setting Up Your Paper Backdrop

Setting up a seamless paper backdrop requires:

  1. A sturdy backdrop support system with a crossbar to ensure stability.
  2. Unrolling the paper from the roll and clamping it to the crossbar to control unwinding.
  3. Pulling the paper down onto your shooting surface for a clean curve.
  4. Affixing the end of the paper to the floor with gaffer tape.

Choosing the appropriate size of the seamless paper roll for your photography needs, catering to tabletop setups or full-scale commercial studios, is also essential.

Most importantly, ensure the backdrop transitions gently onto the shooting surface to form an infinity curve or sweep, which eliminates visible angles in the background.

Tips for Maintaining a Pristine Paper Surface

Once your backdrop is set up, maintaining a pristine paper surface is crucial for achieving professional-quality photos. Store your paper backdrops upright, in protective polyurethane holders or 4-inch PVC pipes with end caps, to shield them from dust and moisture. Avoid laying paper rolls horizontally for prolonged periods to prevent warping and wrinkles caused by gravity.

If you need to transport seamless paper, especially to on-location shoots, utilize the original shipping tube or a sturdy PVC drain pipe with end caps for safe transportation. Paper backgrounds should be placed on smooth, flat surfaces rather than carpet or rough textures to ensure even support and reduce the risk of damage.

Care for your backdrops by keeping them dry and away from direct sunlight to maximize their useful life. Lastly, when wrinkles or stains appear, trim the affected edges with a sharp pair of scissors to maintain a pristine surface for photography.

The Versatility of Vinyl Backdrops in Product Photography

Vinyl backdrops offer a distinct advantage in product photography due to their high durability, waterproof nature, and the availability of over 100 colors and textures, providing long-lasting options for photographers. They can be tailored to fit existing props and stands, offering flexibility for various photography setups.

Our forthcoming discussions will focus on the use of vinyl for splash shots and the realistic textures vinyl can impart to your products.

Waterproof Wonders: Using Vinyl for Splash Shots

The waterproof nature of vinyl backdrops opens the door for some exciting photographic opportunities. They are ideal for shoots involving liquids, be it messy food photography or shoots where spills can occur. The smooth surface of vinyl ensures water droplets remain concise, aiding in the creation of sharp splash photography effects.

This attribute is crucial for photographers specializing in dynamic splash scenes.

Realistic Textures That Bring Products to Life

Realistic textures on vinyl backdrop

Beyond being waterproof, vinyl backdrops can replicate realistic textures like marble, concrete, and wood through high-resolution prints, which add to the visual appeal and authenticity in product photography. These realistic textures produce a more professional and true-to-life setting, making products appear more attractive and authentic to potential consumers.

Incorporating Natural Elements for Authenticity

Incorporating natural elements in product photography

Incorporating natural elements in product photography can create authentic environments that resonate with customers. From wood, dirt, to leaves, natural elements can be employed as backdrops to convey authenticity.

The forthcoming segments will elaborate on selecting the appropriate natural background for your business brand and techniques for photographing food with natural backdrops.

Choosing the Right Natural Background for Your Brand

When it comes to natural backgrounds, the right choice can evoke specific emotions or themes relevant to the brand, such as freshness, organic quality, or luxury. Wood backgrounds, for instance, can create a rustic and warm environment for products, while materials like dirt, sand, or stone can add a nature-inspired look to the image.

Natural light can also be used to achieve a bright and airy aesthetic, which may be suitable for lifestyle-type images that tell a story with the product.

How to Photograph Food with Natural Backdrops

Food photography with natural backdrops calls for particular attention to detail. Positioning food in relation to the natural light source is crucial to create the desired mood and highlight textures in culinary shots. Softening light with diffusers when using natural lighting can prevent overexposure and maintain the authenticity of food photographs.

Experimenting with angles and perspectives is key to finding the best natural lighting, which significantly enhances the visual appeal of food. Seasonal elements such as autumn leaves or fresh spring flowers can be used in food photography to create timely and contextually relevant settings. Incorporating elements like leaves or flowers in the backdrop of food photos invokes freshness and can reinforce the natural aspect of culinary products.

Lastly, utilizing depth of field to blur the background draws focus to the food, giving the photographs a professional look while using natural settings.

Digital Backgrounds: Revolutionizing Product Photography

Digital backgrounds are revolutionizing product photography. They provide photographers with unlimited creative options, enabling the insertion of subjects into any scene during post-production. Adopting digital backdrops can lead to significant savings in time and resources by reducing the need for complex physical set-ups.

Our next discussions will revolve around editing techniques for seamless digital integration and situations where digital backgrounds hold preference over physical ones.

Editing Techniques for Seamless Digital Integration

Once you’ve chosen a digital backdrop that complements the photograph’s subject, theme, and mood, the process of integration begins. Position the digital backdrop behind the subject using the software’s layering capabilities, placing the backdrop on a separate layer. Use masking and blending tools to refine the edges of the backdrop to create a natural-looking composite with the subject.

Adjust the lighting and shadows to match the subject’s conditions and apply color correction for a cohesive composite image. Enhance product photos with post-production techniques to:

  • adjust saturation
  • correct hues
  • fine-tune brightness
  • accentuate textures

For added realism in the composite, apply subtle texture overlays to the digital backdrop to match the subject’s environment.

Lastly, save the completed composite in a high-quality format such as TIFF or JPEG to retain detail and resolution.

When to Use Digital Backgrounds Over Physical Ones

There are instances when digital backgrounds are more beneficial than physical ones. The use of digital backgrounds and templates can save photographers time, enabling them to serve more clients and move on to other profit-making opportunities. Digital backgrounds can generate more profits by allowing photographers to offer unique enhancements that competitors may not provide, with a variety of digital background packages offering clients more choices. They meet the demands of clients who desire specific backgrounds to match their personality or lifestyle, which may not be available during the actual shoot.

Additionally, digital backgrounds can transform mediocre photo compositions into artistic expressions that clients are eager to share and purchase, and are ideal for creating theme-specific photo books and albums.

Accessories to Enhance Your Product Photo Backdrops

While the backdrop forms the foundation of a good product photograph, the right accessories can take your images to the next level. Reflectors, lights, and props can significantly enhance your product photo backdrops, adding depth and dimension to your photos.

Next, we will discuss how these jewelry accessories can be utilized to control shadows, highlights, and weave a story around your product.

Reflectors and Lights: Controlling Shadows and Highlights

In the realm of product photography, lighting plays a crucial role. Combining natural light from windows with white foam boards as reflectors can enhance product lighting economically. Reflectors are essential in outdoor photography for brightening photos and avoiding overexposed areas, creating more natural-looking product images.

Using reflectors can fill in shadows on the product, which brings out details and avoids harsh contrasts in the final image. Consistent lighting and accurate white balance adjustment are necessary for preserving color correctness in product photographs. DIY diffusers created from materials like white bed sheets or shower curtains help soften direct light, enhancing product photography results.

When shooting product photos in the shade, this can prevent harsh shadows and overexposed spots, resulting in an even and flattering light.

Props and Scenes: Telling a Story with Your Product

Beyond lighting, props and scenes play an integral role in product photography. Using props and scenes strategically can help potential customers visualize the product within their lifestyle, potentially increasing sales through effective advertising. Props should be carefully chosen to align with the brand’s image and the message it wishes to convey to its audience, ensuring a consistent brand representation.

The selection of props needs to be thoughtful in terms of color, height, and shape to logically fit with the product and maintain aesthetic coherence. The scale of the props in product photographs is crucial; they should be large enough to be noticeable but not so large as to overshadow the product itself. Props must enhance the product’s presentation without becoming the main focus of the image, ensuring the product remains central to the viewer’s attention.

DIY Backdrop Solutions for Budget-Conscious Photographers

For budget-conscious photographers, there are plenty of DIY backdrop solutions that can give professional results without breaking the bank. Common items such as:

  • fabrics
  • larger white sheets of paper
  • cardboard
  • canvas
  • wood planks
  • tiles
  • other leftover materials

This method can be used to create cost-effective photography backdrops, taking into account the budget constraints while browsing for affordable service options.

The following discussion will guide you on how to create your own backdrops with commonplace items and establish a home studio within a constrained budget.

Crafting Your Own Backdrops with Household Items

Creating your own backdrops with common household items is an economical and creative solution. Here are some ideas:

  • Drape fabrics such as burlap, linen, or cotton over a support structure to create textured backdrops, ensuring a smooth and clean look for your photos.
  • Use wood putty and a spatula to apply acrylic paint for unique textures.
  • Create a custom marble look with a touch of feathered calligraphy ink.

Repurpose everyday household items like corrugated metal, wooden planks, tile decals, and bookshelves to build distinctive and versatile backdrops. You can also craft colorful and playful backdrops with paper cutouts, create a personal mural, or use shimmering tinsel for dynamic effects.

Building a Home Studio on a Shoestring Budget

Building a home studio might seem like a daunting task, but it doesn’t have to be. Materials for DIY backdrops should be selected for their strength, ease of attachment, and resistance to dust or dirt while being cost-effective. Base boards like cheap wooden plywood or fibreboard (MDF) from hardware stores are recommended for backdrops due to their lightweight and ease of storage.

A collapsible clothes rack can serve as an affordable alternative to a professional backdrop stand when draped with fabric or paper. Having multiple color options of affordable background materials like fabric or paper increases the versatility of the home studio. Common household items such as furniture, mirrors, and appliances can be repurposed creatively for use as backdrops in product photography.

Finally, designate a specific area or corner in the home that can be adapted quickly for photo shoots to ensure a consistent setup and efficient space use.

Summary

The backdrop of a product photograph is not just a background, it’s a powerful tool that can transform your product images, enhance the overall composition, and ultimately, drive sales.

Whether you opt for seamless paper, vinyl, natural elements, or digital backdrops, each comes with unique benefits and offers a myriad of creative possibilities. The right choice of color, texture, and accessories can add depth to your images, and help tell a compelling story with your product.

Remember, the key is in understanding your product, knowing your audience, and choosing a backdrop that complements both. With the right backdrop, a simple product photograph can become a captivating image that grabs customer attention and boosts sales.

Hire Professional Product Photo Editors

Producing eye-catching images that highlight your products capture your audience's attention requires more than just understanding color theory and being an expert in your product. It requires design expertise and branding knowledge, not to mention, time and effort.

If you have large scale product photos that need product photo backgrounds, outsource such design work to KDCI, where we'll provide not only skilled product photo editors, but designers who can easily integrate into your team and provide you creative solutions for your brand.

Learn more about outsourcing your graphic design team in the Philippines!

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Offshore Staffing
Pros & Cons to Outsourced Finance & Accounting Services
Learn about outsourced finance & accounting services, key trends of 2024, and pros & cons, to determine if it's the right strategy for your business.

Finding the right talent while being cost-efficient is becoming a huge challenge when it comes to finance & accounting processes. This led to a steady increase in the outsourcing of finance & accounting services.

In 2020, the global market for F&A outsourcing was estimated at $37.9 billion and it's projected to reach $53.4 billion by 2026. With a booming market, staying informed about the latest trends is crucial for businesses outsourcing finance and accounting services. Understanding the benefits and recognizing potential challenges are key to leveraging outsourcing effectively for financial operations.

Finance and Accounting Outsourcing 2024 Trends

In a saturated market like finance and accounting outsourcing, it's important to stay on top of trends in order to remain relevant and competitive. Below are some trends that are expected of the F&A outsourcing industry this 2024.

AI & Automation

A huge selling point of outsourcing is cost savings. In 2024, AI and automation are taking this to the next level. This is part of the shift within the F&A industry towards leveraging technological systems to improve operational efficiency.

Outsourcing companies who can automate basic accounting processes like data entry as well as leverage AI-driven management systems will be at an advantage. Process automation will increase operational efficiency and reduce costs, while AI integration enables more sophisticated, intelligent processing and analysis. Both allow outsourcing companies to provide higher value F&A services.

Cybersecurity

While AI offers significant advantages, it also introduces risks, especially regarding data security. As technology becomes increasingly sophisticated, cyber threats will also become more aggressive.

This is a huge concern in F&A outsourcing which deals with highly confidential data. Malicious actors will be testing cybersecurity measures and finance and accounting outsourcing companies are expected to defend against these cyber threats.

Gartner forecasts a significant increase in investments for data security and risk management, projecting a 14% growth in spending for the year 2024. Outsourcing companies should be able to demonstrate the security of their remote accounting infrastructure, and provide F&A professionals who are cyber-literate.

Environmental Sustainability

With the world facing an environmental crises, all industries, including finance and accounting outsourcing, are expected to go green. This gives outsourcing companies a huge push towards adapting eco-friendly processes.

Just as consumers are more likely to purchase products that are environmentally sustainable, companies are more likely to partner with outsourcing service that demonstrate a commitment to environmental stewardship.

New Pricing Models

Companies are now expecting more from outsourcing agencies. Gone are the days when simple FTE-based models are the norm. In fact, 60% of companies are expected to not renew their outsourcing contracts in 2025 because old pricing models fall short when it comes to digitization and process optimization.

This pushes outsourcing companies that provide F&A services to not only provide alternative pricing models but also go beyond mere service delivery. Companies are looking for outsourcing partners who can help them reduce risks, improve their processes, and provide strategic recommendations that will help them achieve their business goals.

Major Benefits of Outsourced Finance and Accounting Functions

In lieu with the abovementioned F&A outsourcing trends, below will be a breakdown of the key benefits companies are likely to enjoy when they choose to outsource their finance and accounting functions in 2024.

Access to Expertise & Advanced Technology

Outsourcing companies have a large pool of existing resources as well as state of the art technology, which clients can leverage in their pursuit towards digitization and process improvement.

Outsourced talent who combine expertise in artificial intelligence (AI) and finance can help companies revolutionize their finance and accounting processes. Meanwhile, working with a tech-enabled outsourcing partner can save companies from making a hefty investment.

Learn more about how KDCI can help streamline your operations with AI.

Efficiency & Sustainability

Outsourcing finance and accounting services empowers businesses to embrace digital processes, leading to enhanced operational efficiency, reduced production times, and cost savings.

Digitization minimizes the need for paper, contributing positively to environmental sustainability. Furthermore, by leveraging external expertise, companies can access advanced analytics and reporting tools without significant capital investment, optimizing financial decision-making and strategic planning.

This not only streamlines financial operations but also fosters a culture of continuous improvement and innovation, as outsourcing partners introduce new technologies and processes. Hence, outsourcing F&A services not only drives efficiency and cost-effectiveness but also promotes sustainability by reducing the environmental footprint and encouraging the adoption of greener practices.

Enhanced Data Security

Some outsourcing providers invest heavily in state-of-the-art cybersecurity technologies and practices, including encryption, secure access controls, and regular security audits, ensuring that sensitive financial data is protected against unauthorized access, breaches, and other cyber threats.

At the same time, these outsourcing agencies typically have risk management protocols which allow early detection and resolution of potential security threats.

By partnering with these firms, companies can safeguard their confidential information and meet stringent compliance standards and regulations, such as the ISO 27001.

Scalability & Flexibility

Outsourcing processes like finance and accounting provides scalability, allowing businesses to adjust the level of service based on their needs. This is particularly beneficial for growing businesses or those with seasonal fluctuations.

And as more outsourcing companies provide tech integrations and automation as part of their finance and accounting services, businesses can enjoy improved scalability, with seamless adjustments and minimal disruptions.

Potential Drawbacks to Outsourced Finance & Accounting

Like any business strategy, there are risks to outsourcing your F&A processes, mainly caused by having your outsourcing provider offshore, of another culture, and operating on a different time zone.

Data Security Issues

When outsourcing finance and accounting (F&A) services, there will be transfer of sensitive information to third-party providers. Sharing of financial data, employee information, and potentially confidential business insights, presents a risk if the service provider does not have stringent data protection measures.

The challenge is ensuring that your outsourcing partner adheres to robust privacy standards and comply with relevant data protection regulations, to prevent unauthorized access, data breaches, and misuse of information.

Ineffective Communication

Due to physical and organizational distance between the company and the outsourcing company, there many be delays in information exchange, misunderstandings regarding financial reports or strategies, and challenges in aligning the outsourced team with the company's culture and objectives.

Effective communication is crucial for timely and accurate financial management, making its potential compromise a significant concern when outsourcing these critical functions.

Cultural & Language Mismatch

Outsourcing finance and accounting tasks may mean working across cultural and linguistic borders, which can lead to challenges in mutual understanding and interpretation of business practices, expectations, and legal standards. This mismatch can affect the quality of work, adherence to deadlines, and overall effectiveness of the outsourced services.

Ensuring alignment in these areas is crucial for the smooth operation of finance and accounting functions and requires careful selection of outsourcing partners who are adept at navigating these cultural and linguistic differences.

Lack of Control

Outsourcing F&A processes often leads to a perceived loss of control that comes from entrusting external partners with sensitive financial operations and decision-making capabilities. Without direct management, companies may feel they lack the ability to monitor and influence day-to-day activities closely, potentially impacting strategic financial planning and compliance with internal policies and external regulations.

Establishing clear communication channels and setting detailed performance metrics can help mitigate these concerns and ensure outsourced functions align with company objectives.

How to Choose a F&A Outsourcing Provider?

Deciding who to work with may be one of the biggest decisions you make after you decide to outsource. As discussed in the outsourced finance and accounting trends earlier, some outsourcing companies are better positioned to help your organization's finance and accounting department advance in today's competitive market.

Below are the key steps you should take to choosing the right F&A outsourcing partner for you.

Step 1: Identify Your Needs

Clearly define what finance and accounting function/s your business requires. This could range from basic bookkeeping to complex financial analysis or strategic financial planning only. Understanding your specific needs will guide you to a provider capable of meeting those requirements.

Step 2: Evaluate Their Expertise and Experience

Research potential providers to assess their track record, expertise, and experience in your industry. Look for testimonials, case studies, or client reviews to gauge their performance and reliability. Providers should have a solid background and the necessary qualifications to handle your company and financial operations.

Step 3: Assess Their Commitment to Data Security & Compliance

Verify the provider's commitment to data security and compliance with financial regulations. They should have robust security measures in place to protect sensitive information and be up-to-date with the latest compliance standards in your industry. This ensures your financial data is safe and regulatory requirements are met.

Outsource Your Finance and Accounting

Do you need help finding the right finance and accounting partner who can meet your finance and accounting needs?

When you book a no-commitment call with KDCI, we can help you identify your needs, determine whether outsourcing to the Philippines is a good strategy for your business objectives, and customize an outsourcing solution just for you at no cost.

Whether you're looking for hire outsourced accounting and finance staff or you're looking to build a full fledged finance and accounting outsourced team, KDCI can help you.

Contact us today to book a call!

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