The steadily-advancing pace of technology has played a significant role in promoting globalization. As connectivity becomes more and more instant, the distance between borders continues to shrink. This has led to the increasing viability of outsourcing, allowing companies to conduct business on a worldwide scale.
Business process outsourcing (BPO) is a type of outsourcing that allows companies to strategically allocate certain tasks to external sources because their main companies lack the manpower for these competencies, or because it is much more cost-effective to do so.
For the former, an example is when a traditional film studio often asks an external development team to handle the CGI and other special effects in their new movie. For the latter, the most notable example is companies relegating their customer service branches to a satellite office in another country, which will be discussed later.
By conducting outsourcing, businesses are able to alleviate costs. The third-party company often performs these processes for several other businesses (leveraging economies of scale), or costs of living in other countries are lower, which means that labor costs are correspondingly low as well.
The past few years have witnessed a rising star in the world of BPO: the Philippines. While India is the country usually associated when topics about BPO are mentioned, the Southeast Asian archipelago beat out India in 2010 as the world leader in BPO, a position that continues to this day. Today, annual revenues are projected to reach USD 16 billion by the end of 2013.
It’s easy to see why the Philippines has become the leader in business process outsourcing. In terms of the people themselves:
1. Filipinos are skilled workers.
Many Filipinos who apply for careers in BPO are university graduates or are presently taking college units. English is one of the major languages of the country. Pinoys are taught the language, if not from birth, then from grade school onward.
The Philippines is the world’s third largest English-speaking nation. The language is ingrained in the minds of the Filipino people, which makes them exceptional speakers. The country’s high youth literacy rate at 97.75% also contributes to their proficiency in communication.
Aside from that, the Filipino work ethic, centered around delayed gratification, is a longstanding tradition. From an early age, Pinoys are taught the value of work, and this mindset continues to the present day.
2. Filipinos are adaptable, quick learners.
Possessing open minds, Filipinos are more than willing to accept opportunities to learn and improve. BPO companies have obliged their Filipino employees to attend workshops and seminars to enhance their abilities in communication. Training sessions in multiple disciplines have also expanded the Filipino BPO worker’s skill set.
In addition, BPO agents likely possess college degrees in fields other than communications, which lends itself well to holistic awareness and development.
Filipinos are also natural linguists, with most knowing three languages from childhood—the two official languages Tagalog and English, as well as their regional dialect. This allows for the flexibility of the Filipino tongue, and BPO leaders have marveled at Pinoys’ capabilities for being linguistic chameleons, able to adopt American, British, and Australian accents at will.
3. Filipinos have a positive attitude.
The Philippines often tops worldwide rankings of the world’s happiest nations, and this positive outlook applies itself to work life as well. It is this happiness that drives the Filipino work ethic mentioned earlier, as well as their continued willingness to try new things and continually add to their skill set.
The Country’s Edge
Apart from its people, the Philippines itself is beneficial to BPO:
1. Manila is a modern city.
The Philippines is the oldest democracy in Asia, and this has resulted in the rise of an open market and competitive business. The metropolis’s business district is characterized by skyscrapers, with the names of the biggest corporations in the world emblazoned on their faces.
2. The Philippines has advanced digital infrastructure.
Owing to its being home to two now-decommissioned United States military bases, the nation is host to considerable trans-Pacific bandwidth. Modern telecommunications corporations have also stepped up in their network modernization in recent years, which means that businesses will hardly have issues with connectivity.
3. The Philippines is highly westernized.
The US colonial period, apart from establishing the above telecommunications infrastructure, has been beneficial for BPO in another way. American culture is pervasive in the country, as evidenced by the vast amounts of American companies and brands in the country.
As businesses continue to look towards other countries to help offset certain costs, the BPO industry will keep expanding. These reasons will ensure that the Philippines remains at the forefront of the industry, ensuring the steady growth of both international corporations and the national economy.
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Success in outsourcing isn't a matter of chance, but rather the result of a meticulously defined process, a formula that Fortune 500 companies have diligently honed over time. This rigor is a significant factor in the rarity of failures within these industry titans' outsourced programs.
Having spent over two decades partnering with and delivering Business Process Outsourcing (BPO) solutions to Fortune 500 clients, John possesses an in-depth understanding of this intricate process. His comprehensive approach incorporates an exhaustive assessment of outsourcing requirements, precise vendor sourcing, and a robust program management strategy.