BPO Companies

Nobody who follows such things can deny that the growth of the BPO companies in the Philippines has been nothing short of astounding.  Today in Manila, where the lion’s share of BPO (Business Process Outsourcing) companies in the Philippines chose to locate, you can find whole areas of the city that only a few years ago were barely more than fields yet today resemble the most upscale area of any major Western city.

The Philippines is best known as the ‘call center capital of the world.’  Call centers of course are one of the services encompasses by BPO companies in the Philippines but certainly not the only service.  The point is, at present, the Philippines is in the process of capturing the title of leading BPO (Business Process Outsourcing) services provider for the world too.

The evolution of the BPO services industry started in the Philippines with the IT industry (i.e. information technology).  IT technology services of course focus more on behind-the-scenes, back office service.  While such services are of course essential and valuable, they don’t normally include the proactive services that gives the BPO services industry most of it’s ‘buzz’…things like human resources outsourcing, inbound and outbound telemarketing, outsourced engineering services, etc.

The simple fact of the matter is that the critical ingredient in the grown of the BPO Philippines industry has been the almost boundless energy, enthusiasm and natural skills of the average BPO Philippines worker.  They simply have a natural attitude of service unmatched by any other ethnic group in the industry.

The Philippines is one of the most populous countries in the world and Filipinos are very keen for good employment opportunities.  BPO companies in the Philippines are able to attract the large numbers of new recruits that they do because they generally speaking treat their employees better than any other major employer in the country.

Wages paid by BPO companies in the Philippines enable their company employees to enjoy a very good standard of living.  In fact, their wages rival or exceed those of white collar professionals like engineers or accountants.  This means that BPO companies in the Philippines are able to get good employees and keep them.  The end result is better service, excellent value for clients and strong contributions to nations GDP.

Many people who know what a call center is don’t realize that a call center is actually a sub-service of an even larger business services entity called a BPO company (Business Process Outsourcing).  Most of the largest and most reputable BPO companies that exist today presently have major operations in the Philippines.

BPO services are big business in the Philippines even though the idea of the modern BPO didn’t actually start in the Philippines.  It actually started in India.  Although the Philippines has become the number one destination of choice for call center services India still does slightly more BPO services revenue.  But the Philippines is soon to become the number BPO services provider worldwide too.  They’re that good!

Some BPO companies in the Philippines are Indian owned but others are either locally owned or owned at least partially by corporations headquartered in other Western countries.  All of these companies have discovered that the Philippines is the perfect place for such businesses because of the excellent infrastructure in the Manila area and also because of the excellent labor pool.

Most BPO services companies in the Philippines are based in the Manila area for the simple reason that it’s the biggest city in the Philippines therefore the labor pool is the biggest and best.  There is however a lower, smaller tier of BPO services providers and call centers in certain areas outside of metro Manila.

BPO companies in the Philippines give young Filipinos an outstanding career opportunity.  Those employees who want a good job in good working conditions with good benefits and a chance for rapid promotion are highly attracted to jobs in the new BPO services industry.  The BPO industry in the Philippines has taken advantage of a remarkable historical coincidence and turned it into a remarkable opportunity that benefits hundreds of thousands of people.

BPO companies in the Philippines give their employees and managers excellent training.  This training is absolutely imperative because they have to be fully qualified to work for the world-class companies they have as clients.  Although their clients don’t generally like to publicize the fact, the majority of name brand companies that Westerners are familiar with use some sort of BPO services from the Philippines or elsewhere.

Imagine a scenario where your entire business is outsourced to BPO (AKA: Business Process Outsourcing) companies.  Your back office employees are all outsourced from a BPO company in Mumbai, India.  Your Human Resources Management is all outsourced from a BPO company in the Philippines and your Director of HR lives in Manila.  Your CMO (Chief Marketing Officer) also lives in Manila, Philippines and all your sales and lead generation is done from a Call Center in Manila.  Your CFO (Chief Financial Officer) is outsourced and actually lives in New Delhi, India.  But you live in a nice, two bedroom condo-tel in Brandon, Missouri.

That sounds farfetched for sure but it’s very possible and we’re fast approaching that situation now.  BPO companies have discovered that there’s almost nothing that can’t be outsourced if they put the right technology and planning on it and they’re going after as much business as they can get.  Offshore outsourcing from BPO companies is growing dramatically in the US and other English speaking countries and it’s all being done by the big-name BPO companies of India and the Philippines.

Why is this growth of offshore outsourcing happening and how can you do it for your business if you want to?

The driving force behind the rapid growth of BPO companies is economic necessity.  It all started in the early 90’s when companies discovered that many back office tasks could be done in foreign countries where wages were very low and a large percentage of the population spoke English (i.e. India and The Philippines).  After starting with simple tasks like customer service email support, they tried other things.  No matter what they tried to outsource, it seemed to work as long as the right technology was used and the business processes themselves were properly analyzed and planned.

As economic and fiscal situations began to be more uncertain in the US and other English speaking countries, outsourcing from these BPO services companies because increasingly lucrative because of the lower costs of both start-up and continued implementation.  US business were saving a lot of money by outsourcing.

Today there are well know, household name companies in the US that outsource very large segments of their business operations through offshore BPO companies located in the Philippines or India.  BPO company outsourcing services are making it possible for many US companies to keep their doors open whereas otherwise they would not be able to compete with foreign competition who already enjoy these lower costs.

Yes, it would be nice to use totally local labor but in a world that’s getting smaller and smaller through technology, who can define ‘local’ anyway?  If competition is in your back yard competing for your customers it just makes sense to steal as much of their thunder as you can.  The outsourced technical, administrative and marketing help you can get from BPO companies is an indispensible tool for US businesses to meet the challenge of foreign competition

In a time when the majority of companies around the world are very tentative about their future, the BPO companies of the Philippines are ecstatic about theirs.  And who wouldn’t be, with growth figures like these:

• 26% Philippine IT-BPO industry growth
• 24% Employment growth 2009-2010
• 20% Contact Center growth in 2010
• 30% Knowledge Processing Industry (KPO) growth in 2010
• 28% 2010 growth of Philippine ITO (Information Technology Outsourcing)
• 27% growth in number of outsourced IT professionals employed
• 11% 2010 growth in revenues from outsourced health care professional
• 18% Revenue growth of animation outsourced professionals
• 50% 2010 revenue growth of outsourced game development professionals.
• 15% Projected annual growth in overall BPO industry in the Philippines over next 5 years.
• 25% Potential annual growth potential of BPO industry in Philippines if certain conditions are met.

Yes, pretty impressive numbers, right?

This is the state of the BPO industry in the Philippines today and this is why the industry has become in just 10 short years the driving force behind the emergence of the new Philippine middle class in terms of jobs created and revenue generated.  Needless to say, executives and employees of BPO companies in the Philippines are feeling pretty good about the future right now.

If you’ve heard that you can lower some of the costs of operation by outsourcing some of them, back office or front office, to BPO companies abroad but you’re not sure it’s ‘the real deal’ or not….well…it is real.  And here’s what you need to keep in mind:

You better do it before your competition does…..and the figures show that a lot of them are doing it as proven by the following.

According to a recent article in Dateline Philippines, “Philippine information technology and business process outsourcing (IT-BPO) industry grew 26% in 2010 to $8.9 Billion(US).  The industry employed a total of 525,000 skilled workers and professionals by the end of 2010, recording 24% employment growth from end-2009.”

What’s also very significant is that aside from the growth in core IT-BPO services, the industry also diversified.  What does that mean to you?

It means that there’s a lot of different ways that you could lower your bottom line costs and increase the quality of your product output by utilizing the amazing resources of BPO companies in the Philippines.  Here’s a few of the major niche specialties that you can outsource to the Philippines.

• Voice-based BPO services….like customer service operators.
• Email tech support
• Transcription (e.g. Medical/Legal)
• Animation
• Game development
• Research (e.g. Legal and medical)
• Telemarketing
• Market Research
• Software Development

Those are a few of the kinds of things that you can have done by BPO companies in the Philippines at 30-60% lower cost than sourcing them in the states.  If your company does any of those things (or would like to but haven’t been able to afford it), how much money could you ‘free up’ by outsourcing some of them to the proven performers well established in the Philippines?

While most businesses wondering from one day to the next what’s going to happen to their local infrastructure during ‘hard times’, times are booming in the Philippines and especially in Manila where the majority of BPO companies in the Philippines are located.  Manila is the hottest real estate market in SE Asia right now yet business operating costs (including labor) are still significantly lower than in the US.

The biggest problem that new users of outsourced business process services have is knowing what questions to ask and what to look for when ‘shopping’ BPO companies.  Luckily there are organizations you can turn to.

Here’s a few of the more significant organizations and/or trade groups in the Philippines where you could get more information if you want to know more about outsourcing offshore to the Philippines:

• BPAP (Business Processing Association of the Philippines)
• CCAP (Contact Center Association of the Philippines)
• PSIA (Philippine Software Industry Association)
• HIMOAP (Healthcare Information Management Outsourcing Association of the Philippines)
• ACPI (Animation Council of the Philippines)
• GDAP (Game Development Association of the Philippines)
• CICT (Commission on Information and Communications Technology)

As you should be able to see, business process outsourcing is a very dynamic service industry that’s obviously prosperous and growing.  Industry experts predict annual growth of 15% per year over the next 5 years.  Yes, it would be nice if you could source everything locally but the reality is that we do live in a global economy and unless you learn to outsource business processes, you’re working at a disadvantage over your competitors who do.

The number of on-shore and offshore business process outsourcing or BPO companies has grown exponentially over the last 10 years.  A large number of Fortune 500 corporations are outsourcing their BPO requirements to third party providers in the US, Canada, India and the Philippines. Some of the largest BPOs include Accenture and IBM. Apart from a hand full of US providers, Indian players such as Wipro, Genpact and WNS are dominating  forces in the global business process outsourcing arena. Key service areas are Finance & Accounting, Logistic, Human Resources and Customer Care. Almost all BPO companies offer on-shore and offshore solutions for US based clients. BPO companies typically target and service large, multinational corporations. Most BPO companies specialize in supporting mission-critical processes for companies.