Outsourcing Destination of the World

Business Process Outsourcing, or generally known as BPO, is a common practice amongst companies, businesses, and organizations in which they contact a third-party agency to do specific primary or non-primary business activities for them.

Why do companies engage in such and why should they?

Businesses or companies, especially startups, given as they often do not have enough resources nor the necessary staff to perform certain functions for the company, tend to arrive at the decision to business process outsource. Businesses also decide to outsource when they concede to the fact that another specific company can perform a certain business function much more efficiently than they do in-house. Companies see outsourcing as a way to decrease workload and increase in-house efficiency and it is also more cost-efficient, citing a few of BPOs’ benefits.

The Philippines and its BPO industry

With the paradigm shift of the Philippines from an agricultural economy to one of the world’s leaders in the BPO industry, it is truly undeniable that outsourcing in the Philippines brings upon a lot of opportunities to both foreign investors and Filipinos. Today, referred to as the ‘sunshine industry’ of the country, the Philippines’ BPO industry accounts for at most 15% of the world’s BPO market and has consistently been on the top five outsourcing destinations in the whole world.

• Types of BPOs

Depending on your location, BPOs can be divided into three categories: Onshore, offshore, and nearshore.

1. Onshore Outsourcing – Also called ‘Domestic Outsourcing,’ what Onshore Outsourcing basically is if a company decides to outsource to a third-party service provider within the same country. For example, a company in the Philippines decides to outsource to another company in the Philippines.
2. Offshore Outsourcing – What Offshore Outsourcing is if a company decides to outsource to a service provider outside the country. An example of this would be a company in the Philippines agrees to outsource to the United States of America.
3. Nearshore Outsourcing – What Nearshore Outsourcing is if a company decides to outsource to a nearby country.  An example for this is when a company in the Philippines resolves to hire service providers in Asia or Southeast Asia.
4. BPO Services

Now, BPO services can be classified into two: Front-Office Activities and Back-Office Activities.

1. Front-Office Outsourcing – Front-Office Outsourcing is the delegation of activities that thrives on facing clients. This also includes call center services. Basically, the gist about Front Office Activities is that it mainly deals with customer services, sales, and marketing.
2. Back-Office Outsourcing – Also known as ‘Internal Business Functions,’ Back-Office Outsourcing is very ideal for Offshore Outsourcing since the work does not involve company core functions. Its functions include: IT services, accounting, human resources, quality assurance, data and payroll processing. Benefits of this service include cost-efficiency on labor and rent, improved in-house productivity, and access to vital talent missing in-house.

How BPOs Can Benefit Your Business

Companies, irregardless of how long they’ve been in the business, still choose to employ BPOs. This is probably because of the endless opportunities they acknowledge in BPO industries, especially in the Philippines. Below are some of the benefits that BPO industries present:

1. Financial expenses reduction – Probably the first thing that comes to organizations’ minds when thinking of BPO benefits. These organizations outsource providers (mostly in the Philippines) that cost less but still perform the same or exceed the function of an in-house worker. Also, instead of spending money on buying the equipment and people necessary for the job, they can just outsource and let the third-party handle it for them, thereby lessening operating expenses. This also results in a raise of revenue for the company.
2. Core function focus – Additional company non-core workload decreases the efficiency of employees to perform company core activities, unless the company calls on the aid of a third-party to do said non-core functions. It gives the company more time to concentrate on its main business activities.
3. Higher efficiency – Theoretically, since third-party service providers only perform specialized functions, a company can expect nothing but excellent results from their outsources. Work is also done with precision, speed, and efficiency without sacrificing quality.
4. Innovation – With BPO providers’ specializations and developments in a certain area, they are more likely to optimize the results of the work, thus providing more benefits to the company.
5. Global coverage – A benefit that most companies should ultimately think about. If a company decides that it wants to expand to the other side of the world, they can assign this to a BPO company, thereby enhancing efficiency and quicker global expansion. Benefits companies best who’d want to function 24/7 around the clock.

Customers Want Real People, Not Robots

• Artificial Intelligence Challenges in BPOs

With the innovation of technology over the past few decades, it is no secret that artificial intelligence has been hot on the table for companies. Robotic Process Automation (RPA) seeks to replace employees for basic functions for the sole purpose of optimization. For example, in call center companies, A.I. will replace human voices with chat bots that could as well perform basic support functions. The displaced employees would then be tasked to perform higher work functions. This would be no problem since optimization would always mean better work performance and output. The only drawback that this has is that people really don’t want robots to talk to, and the lingering technophobia will always put this technological advance to a slow crawl. Hopefully soon enough, people will learn to accept this awesome piece of technological innovation.

• BPO Service Providers and A.I.

For now, the employment of RPA in companies allow their businesses to give the labor-intensive and time-consuming tasks to robots while letting humans handle more complicated work. This results to employees gaining new skills and lets the company be more effective at dealing with its everyday operations.

With the full potential of RPA still barely scratched, companies have turned to BPOs to progress and implement RPA strategies. This is a win-win situation for both ends, since both companies and BPO providers will be the primary benefactors of RPA and A.I. tools to further enhance work and deliver more than satisfactory work to clients.

5 Top Reasons To Outsource To The Philippines

If after knowing the fact that the Philippines is on the top list of countries to outsource to, and the best at that, and for some reason you’re still hesitant, maybe this will help you:

1. Low Costs – Since the Philippines is a developing country, what keeps the outsourcing industry alive is the lower cost of doing business. Foreign investors would want to come here because of that and all the benefit that comes with it. Lower cost of doing business without the fear of having low quality outputs in work is totally what attracts foreigners to outsource to the Philippines and Filipinos are also known for their hardworking attitude and diligence.
2. Government Supported Industry – The government shows its support by making pertinent policies and programs. For example, the Technical Education and Skills Development Authority (T.E.S.D.A.) offers courses that meet the requirements of BPO industries. Back in 1995, the government passed on the Special Economic Zone Act, promising foreign investors tax incentives. The Department of Information and Communications Technology (D.I.C.T.) also created the National Cybersecurity Plan and Digital Transformation Strategy for 2022.
3. Highly-Educated Staff – English is the language used to communicate to the whole world. Statistically speaking, 100 million Filipinos can speak the language, with a high percentage of which can speak it affluently and proficiently, basically what the world market requires firsthand. Not only that, there are also so many Filipinos that are high skilled that finding one for any specialization is highly possible, what with 3 million new graduates from various world-class universities enter the market every year.
4. Numerous Employment Opportunities – Outsourcing in the Philippines can help open up multiple job opportunities, closing in the gap between the number of job seekers and vacancies. Your company receives quality results, we receive an increase in number of job posts and employment statuses.
5. Economic Stability – From an economic standpoint, it is truly advisable to outsource to the Philippines. With the decline in trade barriers, globalization has paved way and boosted the demand for BPO services, thereby encouraging companies and organizations from other countries to look for lesser cost alternatives while maintaining the excellence of their services. ‘Lo and behold, the BPO industry in the Philippines is the best answer for it.

There’s a reason why the Philippines is a BPO hotspot. The reasons above are probably why.

Common Jobs Outsourced To The Philippines

Here are some of the most common jobs outsourced to the Philippines:

1. Data Entry and Processing
2. Phone and Customer Service
3. Graphics and Web Design
4. Writing (Content Development and SEO)
5. Financial Services, Accounting, and Payroll
6. I.T. and Computer Programming
7. Virtual assistance
8. Human Resources and Recruitment
9. Sales and Marketing
10. Research and Development