The business process outsourcing industry in the Philippines is not just the latest fad, but is genuinely the most lucrative field at present. Employing more than 2 million Filipinos, it is considered as one of the major movers of the country’s economy. Call center expansions are currently being made outside established commercial districts like Makati and Ortigas. Pampanga, Baguio, and Davao are some of the few places that have been added to the growing business outsourcing network.
As different markets are growing at various rates around the world, the concept and scope of outsourcing is still evolving. This could only mean that there is plenty of space for growth. From formerly outsourced services such as financial assistance, online helpdesks, mailroom services, manufacturing, telemarketing and business consulting, top companies and executives are now investing as well into the prospects of outsourcing record management, advertising, administrative information systems, supply/ inventory, recruitment, and reprographics. This only shows that the pressure for the industry to expand their services – vertically and function-wise – and improve their services in order to accommodate clients’ demands is high. In embracing outsourcing, the impetus to execute strategic and careful planning of their workflows is recommended.
Below are the drivers behind today’s outsourcing decisions:
Accelerated reengineering benefits
Reengineering aims for dramatic improvements in critical measures of performance such as cost, quality, service, and speed. By outsourcing a non-core function to a world class provider, the organization can begin to see the benefits of reengineering.
Access to world class capabilities
World class providers make extensive investments in technology, methodologies, and people.
Cash Infusions
Outsourcing involves the transfer of assets from the customer to the provider.
Resources for other purposes
Outsourcing permits an organization to redirect its resources, most often people resources, from non-core activities toward activities which serve the customer.
Less out-of-control functions
Outsourcing is certainly one option for addressing this problem.
Improved company focus
It allows company focus on its core businesses by having operational functions assumed by an outside expert.
More available capital funds
There is tremendous competition within most organizations for capital funds. Outsourcing can reduce the need to invest capital funds in non-core business functions.
Reduced operating costs
An outside provider’s lower cost structure, which may be the result of a greater economy of scale or other advantage based on specialization, reduces a company’s operating costs and increases its competitive advantage.
Reduced risks
Shared investments spread risk and significantly reduce corporate jeopardy born by a single company.
More available internal resources
Companies outsource because they do not have access to the required resources within the company.
To conclude, Oracin and Boyd (2008) gives essential guidance on how BPO companies should evaluate how they might execute strategies given current state of the constrained economic climate:
1. Evaluate your “operational” delivery infrastructure and determine how it can scale both up for large international opportunities and down to meet the requirements of mid-size businesses. Significant opportunities await those that can demonstrate their ability to support both large and mid-size businesses.
2. Determine which model, build-buy-partner, best suits your strategic vision. If you are a new entrant in this market, adopt the partner model to not only gain quick transaction but also to learn what works best.
3. Pay close attention to existing contracts especially in these economic times, to ensure that your clients believe you are bringing true value with your outsourced services.
4. Focus on the growth markets, especially managed print services and imaging and document archival opportunities. The former will provide you with a beachhead with your clients and the latter will provide insights into the client’s document-intensive processes and the opportunities that reside there.
5. Solicit and engage large BPO companies that are aiming to take complete control over entire business functions for their clients. The numbers in this market are very large and there are significant opportunities for partnerships to subcontract specific functions within the processes.
BPOs are faring well despite the economic crisis. Resorting to this option for companies still appear to be the cheaper way to go. Trends show that outsourcing is a profitable industry based on general industry reports and individual financial statements of several companies.
Tags: Baguio, BPO, business process outsourcing, call center, contact center, Davao, Makati, Oracin and Boyd, Ortigas, Pampanga, Philippines
