Business Process Outsourcing (BPO) to the Philippines can be a smart business strategy for small and large organizations alike. Low labor costs, increased efficiency, and industry expertise are just a few of the upsides. Still, six out of ten offshore outsourcing relationships fail. “Most often, program failures are the result of partnering with low-cost outsourcing providers. Creating a successful, long-term outsourcing partnership can be done by following six simple rules,” says Ralf Ellspermann, CEO of PITON-Global, a leading mid-sized BPO in the Philippines.
Rule number one is to always know and clearly define your BPO requirements. Many outsourcing service buyers enter outsourcing relationships unprepared. Expectations should be set from the beginning, with clearly defined requirements and objectives. “A good BPO provider will confirm whether a client’s outsourcing goals and expectations can be met or not. An outsourcing buyer should be crystal clear about what their goals are from the BPO. The moreclearly this is established, the less likely it will become an issue later. Once key requirements are finalized, they should be outlined in the service agreement between the BPO and the client,” says Ellspermann
The second important factor to successful outsourcing in the Philippines is partnering with the right-sized vendor. For example, for SMEs with smaller outsourcing requirements (2-50 agents), a smaller, boutique-type BPO will likely provide a better and more personalized service than a large-sized vendor with thousands of seats and agents. “Ideally, an outsourced program should be between 3-10% of the BPO vendor’s total seat capacity. This will ensure that your business is considered a key account by the outsourcing provider,” he adds.
With close to 1,000 BPOs operating in the Philippines today, there’s no shortage of companies providing industry or service specialization. The third key to a successful, long-term outsourcing partnership is working with a BPO that has deep domain expertise in your program area. Ellspermann explains: “Outsourcing front and back-office tasks only makes sense if the provider can do a better job than you could do in-house. If that’s not the case, then you should revisit the vendor selection process. Finding and partnering with a highly specialized BPO is critical to the long-term success of any outsourcing partnership.”
Another critical rule to follow when outsourcing to the Philippines is to focus on delivering an outstanding Customer Experience (CX) and quality service. “A well-executed offshore outsourcing strategy with a premium BPO provider will always lead to savings of 30-50%. Conversely, partnering with a low-cost BPO provider in the Philippines offering 60-70% savings over onshore vendor rates will often only exponentially increase the risk of failure. Low-cost BPOs compete on price, not quality, and simply do not have the capability to reinvest revenues into resources that will deliver quality service or excellent CX. “The entire point of BPO to the Philippines is to enhance CX. If that’s diminished, and customers become a casualty of sub-par service, then cost savings are meaningless,” says Ellspermann.
Leading BPOs in the Philippines are tech-driven companies. Rule number five is to work with a BPO that invests in the latest technologies. This can mean the difference between a successful outsourcing program and a failed one. “Unfortunately, most SMEs ignore this critical point to their own detriment. Technologies such as AI can lead to increased operating efficiency and an enhanced CX. A BPO that utilizes cutting-edge technologies may require fewer agents than a vendor that does not, which would result in reduced costs. Additionally, better CX leads to higher customer satisfaction and net promoter scores,” he adds.
The final rule to outsourcing to the Philippines is to simply use common sense when outsourcing your BPO requirements. As is the case in much of life, if an offer sounds too good to be true, then it probably is. In most cases, the hourly rate of a BPO is indicative of the level of service that you can expect to receive, lending truth to the saying, “You get what you pay for.”
Following these six rules will significantly increase your chance of a successful, long-term BPO partnership in the Philippines.