Dubbed as one of the leading outsourcing hubs in Asia and the most ideal outsourcing destinations for most foreign companies, the Philippine Business Process Outsourcing (BPO) industry shows no sign of slowing down any time soon. Instead, it keeps on growing bigger and sturdier.
The IT-BPO industry has opened a lot of opportunities for the Philippines. It has helped secure and strengthen the country’s growth and development ever since it was introduced. Remarkably, it is one of the fastest growing sectors that played an important part in lessening the unemployment rate in the country.
However, a lot of people remains unfamiliar with BPO and its nature of business.
What is a BPO and Call Centre?
Business Process Outsourcing (BPO) is a business practice that requires hiring a third-party to perform your services or specific roles. It means delegating your non-core functions to another private company that specialises on the task. The other company could be in the same area or country.
Call centre is one of the most popular outsourced services in the Philippines. They are categorised into two: non-voice, and voice services. The non-voice services include – live chat support, email support, and others that do not require talking to clients. Meanwhile, voice services include – customer support, telesales, claims and collections officer, and many more.
The Front Office and the Back-Office Services
In a traditional BPO setting, the services are usually divided into two: the front office and the back office.
The front office services represent the customer-facing function of a company. They directly deal with clients every day and are good at communicating with people.
Some front office services include – customer support, contact centre agent, HR manager, and more.
Meanwhile, the back-office services are comprised of – digital marketing, content marketing, email marketing, social media marketing, SEO services, web designing, graphic designing, virtual assistant, accounting, data processing, and other services.
Early Years of the Philippine BPO Industry
The early 90s witnessed how the BPO industry started small and struggled to become one of the biggest sectors in the business world. It was in 1992 when Frank Holz set up the first contact centre in the Philippines. Five years after, the first multinational account was established, and over-the-phone customer services was seen advancing.
In 1995, the Special Economic Zone Act was established by the Philippine Congress. This act provided lower area requirements and tax incentives for developments which attracted foreign investors. Not long after, the Philippine Economic Zone Authority (PEZA), an agency under the Department of Trade and Industry (DTI) was created to assist investors locate PEZA-registered service facilities inside the country to build their businesses.
During the early 2000s, a huge US-based outsourcing centre decided to fully move their operations to the Philippines and open at least 84,000 new jobs. After that, a great number of start-up outsourcing companies was constructed all over Manila.
Proving its peak, the industry’s revenue rose up to billions of dollars within just a few years. It boasts a whopping annual growth of 46% which fully contributed to the rise of the country’s gross domestic product (GDP), as well as help lessen the country’s unemployment rate by opening thousands of jobs for the Filipino people.
Continuous Growth of the Philippine BPO Industry
It was more than two decades ago since the Philippine BPO industry has started. However, its growth is stabilised by the fast-changing innovation despite the constant political changes that the country is experiencing.
The country currently boasts a steady growth in revenue and covers about 10-15% market share of the global market. With these figures, outsourcing in the Philippines has steadily maintain its place in the global ranking for the best BPO destination.
Economists predicted that the call centre services of the Philippines will continue to robust until 2022.
Pros and Cons of Outsourcing
There have been numerous write-ups and articles that question if it is good to outsource your services. Respectably, outsourcing has its fair share of pros and cons that a business owner should evaluate before coming up with a decision.
Pros of Outsourcing
1. Cost efficient
Keeping your services in-house will cost a lot, especially for start-up businesses. On the other hand, there is no doubt that outsourcing, especially in the Philippines could help you save a lot of money. Naturally, the living expenses in the Philippines is way cheaper than in other countries. So, labour costs are relatively lower including the equipment, infrastructure, and other fees needed to open a business.
2. Access to premium talents
The Philippines produce thousands of university graduates every year. These graduates specialise in various fields and are considered as highly educated individuals. In addition to that, these graduates can fluently communicate in English as it is mostly utilised on all schools in the country.
3. Improved quality and increase in productivity
As you outsource your non-core services, you we will be able to focus more on your company’s growth and development. The same goes to your outsourced services. As you delegate your services to experts and specialists, the quality and productivity will increase.
Cons of Outsourcing
1. Lack of control
Whether you accept it or not, when you choose to outsource, you’re already giving up some control. Although you can easily give direction and check their output via email and other communication sites, your presence on-site would make a difference.
2. Communication technology issues
Some outsourcing companies still experience this up until today, especially when the client and the team is living on different time zones. Some other countries also experience fluctuating internet connection which could interrupt an important meeting.
Just like how every business has its own pros and cons, outsourcing has it too. In the
end, it will all boil down on how business owners will handle things based on their decision making.
Choosing the Right Outsourcing Partner
Decisions involving the future of your hard-earned business is not something to rush over. A smart decision rather than an unsure one is your best chance at making it big for your business. So, a lot of market research, professional advising, and strategising is needed to make sure that your business is going to the right direction.
To get other tips on how to choose the right outsourcing partner, read this.
Outsourcing is a proven effective way to develop your company. Now, all you need is to find the right outsourcing partner in the Philippines.
