What’s Up with BPO (Business Process Outsourcing)?

BPO…..No, it’s not a big new international oil company. But it probably does touch your life more than you know. BPO stands for Business Process Outsourcing and it’s something that has not only become very popular with US businesses in recent years but has in fact become a tool of last desperate resort as US business fight rising costs of all kinds.

The idea behind business process outsourcing isn’t so illogical. Any smart business owner is going to purchase his/her wholesale materials from the lowest vender possible. So why should the same thing apply to labor?

It’s only been advances in ease of communication that have made business process outsourcing possible…and the evolution and growing sophistication of the internet.

You see, it’s just as easy now to have a secretary in Manila answer your phone as it is to have your secretary in Atlanta, answer it. And if the gal in Manila works for 50% less money per hour than the girl in Atlanta, why wouldn’t you use her?

You’d probably be open minded to outsourcing parts of your business operation especially if your business is already competing with cheap imported goods from China and having to contend with the increasing cost of seemingly senseless government regulation. That’s where the growing BPO industry is making its contribution to businesses all over the US.

You may remember that in its early years of expansion, the United States was involved in something called the Spanish American War. And the US won, right?

And there was a little group of beautiful islands in SE Asia known as the Philippines that we took over and administered up until 1946 when we gave them their independence. During that period of time, from 1898 to 1946 they because about as Americanized as a country can become without actually being America.

During the US period of association with the Philippines, English became their national second language. Or you might even say it became their national first language considering that there were dozens of separate and distinct languages spoken throughout the country and they actually had no national language spoken uniformly through the length of the islands.

So……in the year 2000, there in the Philippines you had the 3rd largest English speaking country in the world, with mostly positive feelings and a strong cultural affinity toward the US and they sorely need jobs and opportunity in the country.

Add in how easy it has become to communicate between the US and the Philippines… and further throw in the business situation in the US where labor rates are going through the roof and it’s getting harder and harder to find affordable, qualified employees. It all adds up to a perfect growth opportunity for the Call Center services in the Philippines.

Nowadays just about any job task that involves a computer, the internet and/or a telephone can be done by highly motivated, well educated, very trainable, appreciative and courteous Call Center agents in the Philippines. It’s no wonder that the BPO industry accounts for a significant percentage (currently somewhere around 10%) of Philippines GNP.

Many companies in the US prefer to use the talent pool with Philippine BPO’s for outgoing lead generation and telemarketing but there are many more possibilities than that.

Several well know investment firms use Filipino investment analysts for securities research. Lots of US legal firms use them for transcription and legal research since there is a lot of similarity between US and Filipino legal and financial systems.

And that’s not to mention the possibilities of US companies adding world-class customer service to their brand. Nowadays, it’s difficult to maintain a clear, distinct product advantage based solely on product features and benefits but it is easy to have better customer service and support.

Filipinos are well known for their politeness and courtesy and they do a great job in customer service…..all this at a cost savings of 30%-60% from comparable US costs.

The BPO industry in the Philippines has three basic tiers. Tier One is the ‘big boys’ who only deal with customers wanting hundreds of agents. Tier Two is companies with exactly the same capabilities but who deal with smaller clients. Tier Three is the very small call center operations pop us and usually don’t last too long because their under capitalized and/or mis-managed.

The biggest growth in the BPO industry today is from medium sized US companies trying it for the first time. If you’ve been considering using a Philippine BPO to help lower your costs and increase your bottom line profits, just be careful and do your research before you select a company. Be sure you’re dealing with a company that has top grade technology and management. The price, from the Philippine BPO, will be good…..but price isn’t everything.