UN Calls for “Decent Work” in BPO Firms

Posted on December 21, 2011 by admin

The BPO industry has been, over the past years, consistent in creating good jobs for workers in developing countries. With salaries and work conditions that stand above average local standards, Business Process Outsourcing has, indeed, hoisted an economic craze in struggling economies. As such, the United Nations heralds offshore BPO activities as the “new wave of globalization”—the economic equivalent of today’s stronger global linkages fostered by technology.

However, while applauding the impressive economic achievements of this trending economic activity, the International Labour Organization (ILO), UN’s specialized agency that oversees International Labour Standards, calls for further improvements in the employment and working conditions of local workers in BPO firms.

In a study that highlighted the remote work conditions of workers from the four major outsourcing destinations, namely, Argentina, Brazil, India, and the Philippines, the agency construed that Business Process Outsourcing firms provide good jobs by local standards. In India, for example, BPO workers earn twice more than the average wage offered in other local industries; while in the Philippines, Filipino BPO workers earn 53% more compared to Filipino workers outside the industry.

However, the agency observed that while BPO firms are favorable since they offer good paying jobs amidst precarious employment opportunities, the lack of government policies that measure and sanction appropriate accountabilities and protection for the rights of local workers has resulted into an alarming 100% staff turnover rate in the industry. Added with the generally stressful and health-risky nightshift work schedules, local workers tend to burn out easily and loss enthusiasm as days go by.

To this regard, existing Business Process Outsourcing firms must work for better policy-based improvements so as to augment productivity in the face of this looming attrition rate. After all, taming a hired employee is less costly and more productive than hiring anew.

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BPO: Changing for the Better

Posted on September 15, 2011 by admin

BPO is one of the most misunderstood acronyms in the history of global commerce. Those who don’t know what it stands for will continue to be prejudiced against it. Why is this so? Well for one, business process outsourcing (BPO) requires transformation. In other words: change.

Organizations cringe at the mention of ‘change.’ Change is uncertain. You never know what lies ahead of it. Whether it is a change for the better or a change for the worse, no one can actually tell. Even carefully planned events can go awry at a blink of an eye. There are uncontrollable forces lurking around the corners to strike us unaware. Given these and more, organizations fear change and the failures that deliberate changes might bring about.

But as the old cliché goes, change is the only constant thing in the world. If you understand that, then there’s no need to fear outsourcing. Every business, every human or organizational activity, every relationship you intend to foster is a risk. There is no point in doing something without willing to take risks. You never know what’s worth protecting or worth improving if you always play safe.

Process outsourcing goes beyond competition. It is basically the product of widespread social changes such as the invention of the Internet and the phenomenon regarded by many as ‘technology transfer.’ Economists for their part have a high regard for technology transfer because it levels the playing field between rich and poor countries. For instance, people in India are spared from the effort of inventing a form of technology to aid computing and research activities. America and Europe had already taken care of inventing and developing technology. What India needs to do is just maximize the potential of Western technology so that it will work for the benefit of its people.

Process outsourcing is about technology and the intelligent use thereof. If you are not computer-savvy or if you do not have sufficient resources to hire a competent IT staff, then you sure will be endangered. One of the best ways to reduce the risks of process outsourcing is to have proper knowledge of VOIP technology and IT. For people sincerely interested in outsourcing, such knowledge will be useful in building an efficient call center or in selecting the right vendor to outsource with. It also spares you from wasting time with the wrong outsourcing firm. Ergo, an outsourcing firm with crappy or outdated technology that will only give your business a bad name.

Process outsourcing is also about having the right people at the right positions. Paying attention to this one contributes greatly to risk mitigation. Both the service provider and the client company should agree with each other on how to properly distribute and utilize labor for the upcoming process outsourcing project. If you want to go for a 90% chance of success, put people where their strengths are. Do not hire for the sake of quantity. Hire with the end goal of quality process outsourcing. For instance, if there is an introverted yet very detail-oriented employee, do not put her in a telemarketing campaign. She might be intimated by too much aggressiveness and under perform as a result. It’s better to put her in a customer service campaign where her attention to details and passivity can be put to good use. On one hand, if there is an outgoing, outspoken and aggressive personality in your midst, do not deploy her to a passive account. Better put her in sales. She will surely reach and sometimes surpass the quota before shift ends. As for backend services, make sure you hire people who have gained enough experience or are specialists of that field. For example, hire a certified public accountant rather than just settle for a management accounting graduate.

If you sum up everything, the benefits of process outsourcing basically overshadow the risks. Risks are a given. The whole world is filled with risks. But if you know what services you want to outsource, if you have exhausted and filtered all your choices before finally selecting a service provider, if you know how to unleash the potentials of your labor force, and if you know the right technology to use, then change is nothing to be afraid of. Outsourcing will help your business change for the better instead. As Nobel Laureate Marie Curie once said, “Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.” Fear not outsourcing. Fear that you may end up losing more by not outsourcing at all.

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$6 Billion Worth of Surplus in Philippine Economy: Process Outsourcing One of the Key Boosters

Posted on August 22, 2011 by admin

The process outsourcing industry has proven its prowess as the one of the Philippines’ prime drivers of economic growth. The Manila Standard Today recently reported that “strong foreign exchange inflows pushed the country’s balance of payments of position to a record surplus of $6.286 billion” from January to July this year. This has effectively paved an increase in the country’s gross international reserves and the depreciation of the US dollar against the appreciation of the Philippine peso.

Along strong exports, increasing remittances from overseas Filipino workers (OFWs) and high tourism returns, business process outsourcing revenues have greatly boost up the Philippine economic performance. The booming process outsourcing environment is also one of those magnetic forces that bring in more foreign direct and portfolio investments.

For awareness’ sake, the term ‘balance of payments’ refers to the total liquidated transactions a country has with other countries in the world. When you speak of surplus, this ultimately means that more foreign investments are coming in than the amount of money spent in paying other countries. This surplus is responsible for the appreciation of the Philippine peso.

So many reasons to rejoice – albeit with precaution. Balance of payments surplus was incredibly 80.4 percent higher than $3.284 billion surplus recorded every year for the last few years. As one of those that made such a performance possible, process outsourcing is prophesied to grow further in future as opposed to predictions about its downfall. Bangko Sentral Deputy Governor Diwa Guinigundo believes that the Philippines is “almost there” and it will not be long before the country achieves the kind of development it needs.

So long as the process outsourcing industry and its fellow economic boosters remain active and ever growing amidst various commercial challenges in both international and domestic spheres, balance of payments surplus may effectively continue to rise. The market is still a mysterious subject, filled with uncertainties as much as hidden gold mines. Steadfastly and without having to rush it all out, the Philippines may well gain a spot as one of the world’s fastest growing developing countries, capable of shifting with the shifting market.

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Process Outsourcing: Key Outsourced Jobs

Posted on July 21, 2011 by admin

The new generation esteems offshore process outsourcing. Large quantities of financial investments have all went to the industry’s coffers, giving it a status far more valuable than other business sectors. Companies from various areas around the globe have one way or another engaged in this undertaking as process outsourcing becomes one of the most viable means of saving costs and maximizing the potentials of untapped resources. Offshore outsourcing also involves task specialization so as to ascertain that services delivered always maintain quality standards. Before jumping aboard the process outsourcing ship, it is very much necessary to get to know how the global industry divides process outsourcing tasks and which individuals in offshore industries specialize in these key outsourced jobs:

Call Center Agents

Although in the history of process outsourcing it has never been explicitly and officially recorded, call center agents are usually divided into three categories: Telemarketers, Customer Service Representatives (CSRs) and Technical Support Representatives (TSRs).

Telemarketers are the ones entrusted with direct sales. Telemarketing metrics induce, if not oblige, agents to reach a sales threshold. In the past this was not necessary, but the emergence of the fast-paced process outsourcing industry has changed the phase of telemarketing, making it at present a highly standardized, performance-based job. Since the nature of telemarketing requires a certain degree of aggressiveness, tact and persuasiveness, reaching sales quota on a regular basis speaks a lot of an agent’s capabilities and his suitability to telemarketing campaigns. The most skilled telemarketer can have as much

Customer Service Representatives assume a combination of functions which are entirely different from Telemarketers. They may collectively serve as a remote information center, a help desk, or an order processing and verification department. This depends entirely on the client’s preferred set-up. Process outsourcing vendors usually cater to any and all needs of the clients. CSRs on board may specialize in just one aspect of customer service, but A CSR job, however, is generally multidimensional.

Technical Support Representatives are in some way higher level CSRs. They exercise the same functions as CSRs, only more specialized and more complicated. They also receive calls and attend to customer’s needs but usually in the form of technical assistance. In the process outsourcing lingo, their main job function is akin to that of a help desk since they address concerns involving “how’s” through answering the customer’s “why’s” and “what’s.” For instance, how should one connect this cordless phone to the internet, because according to the customer, she unsuccessfully installed it despite following the manual religiously? So the TSR comes to the rescue and guides the customer step by step into the installation process until the problem is solved.

Process outsourcing also classifies call center agents according to the industries they serve and according to whether they receive or make calls. Call center agents that engage in receiving calls from or making calls to companies, rather than individual customers, are called Business-to-Business (B2B) agents. They are hired by one business to close or maintain partnership deals with another business. As for Business-to-Consumer (B2C) agents, it is easily understandable that their goal is to directly sell to private individuals or, in the case of CSRs and TSRs, maintain the relationship between client company and its existing and potential pool of customers. The process outsourcing industry also recognizes agents as either outbound or inbound. Telemarketers, because they call out to customers rather than receive calls from them, are more appropriately classified as outbound agents. Since CSRs and TSRs receive calls, they are effectively inbound due to the inward flow of calls.

Virtual Assistants

Like call center agents, there are also different kinds of Virtual Assistants (VA). They come in all forms and their main goal is basically the same: to provide assistance. Any individual with whom you can entrust your duties as well as the quirks involved in operating your business. It does not matter if her designation is personal assistant (PA) or a marketing assistant (MA), so long as you interact through voice-enabled software over the internet, then consider yourself a VA contractor. The process outsourcing world is replete with virtual assistants that cater to the personal necessities of top executives or business owners. VAs are dispersed in various areas of responsibilities. They can be in marketing; they can work as an executive assistant. If client wants someone who can assist him in other tasks besides those related to his work, then he can have a VA custom-made as a personal assistant.

Having a VA is practical and convenient for business owners who do not have the inclination to spend sums of money or do not necessarily require someone physically present as long as his work is made easy. VAs’ functions ultimately depend on the instructions of their boss. Employing them should therefore be built on mutual trust. It is already a custom in the process outsourcing industry that you must trust your vendor and its workforce, especially when you outsource jobs that require exposing personal information and documents.

Back Office Staff

Back office process outsourcing extends to several areas of commerce such as accounting, human resource and other outsourceable administrative positions. Back office outsourcing is mostly characterized by the delegation of non-core jobs and functions from within the firm to a third party service provider. Of course, it may be a misnomer. Just because such jobs are non-core, they are nevertheless still important to the operations of the firm. They are the unnoticed forces, which push companies from behind. And although back office jobs may not be classified as frontline, owing to the fact that there is less to zero interaction with clients or consumers, they are still essential ingredients to success and, in fact, are paid more than most frontline jobs, which are mostly easy and less technical in nature.

Because of the bigger payment, many business owners tend to forego hiring a proper back office staff. At times, they limit their staff to one or two. However, by outsourcing processes, businesses can get a whole team of back office employees and, as such, still gain more than he bargained for. Quality-wise, particularly if your preferred outsourcing provider is based offshore, you get the same output for less. A lot of back office employees in developing countries are just as competitive as those who earned their degrees and worked in Western countries. In terms of cost, hands down, on-shore providers cannot beat the inexpensive costs of offshore process outsourcing services.

 

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The Challenges of Process Outsourcing

Posted on July 12, 2011 by admin

Over the years since the process outsourcing boom, a new set of challenges have emerged. These challenges require a lot of skill in order to be solved. Thankfully, highly industrialized countries have a penchant for outsourcing, thus giving developing countries like China, India, Malaysia and the Philippines the opportunity to sustain and increase growth in newfound offshore process outsourcing industries of which they are a part of.

In spite of what seem to be a positive outlook on process outsourcing, there are intrinsic issues that have been overlooked though they would have needed thorough consideration at the outset. One of the most compelling challenges in the realm of outsourcing is the erosion of managerial control. This is especially true in the case of large-scale, long-term projects. Controlling a service provider or vendor’s daily routines, functions, and methods of delivering the project can be quite difficult and not to mention taxing. Such lack of control may eventually lead to unexpected surges in cost and delays in delivery.

The occurrence of such incidences tends to upset collaborative activities in the process outsourcing industry. What companies usually do to address this concern is to employ a team for quality assurance purposes who are then deployed to the service vendor’s offshore facility. Of course, provided that the vendor will also lend his cooperation. Another alternative is to appoint someone from the in-house workforce, if not an independent consultant, to keep an eye on the progress within the premises of the offshore outsourcing site.

Other means to handle the issue of control erosion include exercising proper discernment before selecting a service provider. To ensure that you have the kind of vendor who will give you more stakes in the activities attached to process outsourcing, select a vendor that is not just accommodating but also willing to work synergistically with your company. In other words, the vendor must prioritize your concerns before anything else and are open to your suggestions and decisions. When a vendor tells you not to worry anymore and just let them take care of the project for you, this is quite alarming. Although on the surface it sounds soothing, you never really know. This is not to say that vendors who act like that are not to be trusted. However, it would be better to have a vendor that allows you to take part in process outsourcing activities and treats you like a partner rather than an outsider.

Confidentiality threats and issues on non-disclosure of company information also pose a challenge to process outsourcing. For instance, the vendor and the client have signed a non-disclosure agreement (NDA) beforehand and either of the two is involved in some event, say a research or a media feature, where disclosure is probable. Both parties must therefore exercise caution when it comes to giving out information. Otherwise, the data may leak to competitors and disrupt the momentum clients or vendors have gained as a result of process outsourcing. Client companies can therefore adopt a partial outsourcing strategy as a viable alternative. Only non-core functions will be outsourced while frontline functions will all be handled in-house. Such a strategy has the ability to camouflage delicate information and data that may have leaked outside the borders ultimately would mean its truth value is dubious.

Finally, one of the most challenging things with regard to outsourcing is the inability to change with the changing times. It is necessary that both parties adapt to changes in the external environment. Otherwise, they will be left behind or their relationship will experience strains. Like if a new technological innovation has arrived, clients and vendors should assess its possible contributions to the partnership. They cannot use the same strategies forever or for as long as the partnership still stands.

Offshore process outsourcing is beset with various challenges that require a great deal of interaction skills, as well as technical know-how. Vendors and their clients must work hand in hand to overcome these challenges. Process outsourcing works best if a collaborative partnership is at the heart of client-vendor relationship as this creates a win-win situation for both parties. There must also be effective communication between them, whereby clients and vendors regularly interact with each other in order to prevent potential problems or address existing ones. Regular interaction will also give birth to ideas that can benefit the partnership and encourage mutual growth.

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Philippine Process Outsourcing Has Sunk to 9th Place!

Posted on March 31, 2011 by admin

What is really the score with the Philippine business process outsourcing (BPO) industry in comparison with other players in the world? Are we or are we not number 1? Are we or are we not on top? Different surveys seem to have different results. Different writers seem to have different moods – they either exaggerate the merits of the process outsourcing industry or criticize it to the point that it looks so incompetent to the rest of the world.

So which is it?

The latest news as of last month speaks of how much Philippine process outsourcing has sunk! From earlier claims of exceeding the Indian BPO market and tickling America’s entrepreneurial bones, the Filipino – just all of a sudden – tumbled down to 9th place. This is according to A.T. Kearney, a global management consulting firm. The latest hush-hush strikes a cord among those who have always been impressed by the overall performance of Philippine process outsourcing firms and by industry members themselves.

There have been reasons given. But as a personal speculation, perhaps one of the reasons for this sudden downgrading is simply because our competitors have found a way to outsmart us. India and China’s dominance when it comes to labor capacity and technological-savviness are far beyond the means of a start-up country like the Philippines. In Chennai, India’s Information Technology capital, there are about 77 I.T Parks and growing. Dalian in China is also a host to numerous business parks, some of which can hold as much as 100 I.T companies under one roof!

There is little basis for comparison, however. India and China have been part of world history, whereas the Philippines did not get to experience real freedom until after July 4, 1946. The two countries are home of the world’s oldest civilizations and they are basically more experienced. In addition to this, both India and China have the biggest population in the world, giving them a large reservoir of labor which they can tap on regardless of the workload and whenever the need arises.

Yes, all these may have contributed to the advantage of China and India, but how do we explain the excessive income of the Philippine process outsourcing industry, which has overtaken India’s total revenue at the end of last year? Could the 9th place ranking be a misnomer?

A.T. Kearney may be a global management consulting firm, but it does not by all means have the omnipotent access to all information about outsourcing. Moreover, the company does not have a base in the Philippines and thus blinds the A.T. management from the merits of the local process outsourcing industry. There is a world of difference between an onlooker’s point of view and the point of view of an insider. The firm says its bases for putting the Philippines in 9th place include financial attractiveness, people and skills, and business environment. Although the country’s local process outsourcing industry has more skillful people and a better business environment, its financial attractiveness is significantly lower than the top 8.

A.T. Kearney apparently gives more weight to financial attractiveness. Determining such a quality, however, is merely predictive and subjective. Though the international consulting firm did acknowledge the Philippines as a powerhouse house for process outsourcing, financial attractiveness is not an appropriate way to measure the BPO industry’s performance. It is more like an outcome of external factors which renders it difficult for foreign investors to bet their money on – maybe political corruption issues, Moro insurgency, or other bad habits they may have heard about the Filipinos. Whatever their reasons are, they have nothing to do with quality service and the quantity of outsourcing investments in the Philippine process outsourcing industry. Had A.T. Kearney been immersed in the Philippines, they would have known that its process outsourcing industry is not dependent on foreign BPOs or foreign companies relocating their operations. There are many homegrown call centers that also engage in process outsourcing. They have enough tools and knowledge on their sleeves that allow them to amass wealth from foreign clients, without the need of external consultants or middlemen.

That’s certainly right. Financial attractiveness alone is not what makes a country the world’s leading BPO destination. We know our own figures and our own statistics, just as much as the rest of the world does. THE PHILIPPINE PROCESS OUTSOURCING INDUSTRY IS STILL NUMBER 1!

Case closed.

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