What drives this US$154-billion industry to grow at an estimated rate of 10.9% yearly? The global BPO market has been constantly expanding, not just in terms of revenue, but also in terms of services being added to the list of processes that may be outsourced. More and more countries are also opening up their shores and manpower to the BPO industry.

Most people think that the biggest consideration in BPO is the cost savings. By saving on the amount one spends on salary and benefits for an in-house employee, most companies can pass these savings to customers in terms of lower prices for their goods and services, or use it for other expenditures.

Cost savings, however, is not the most important benefit. What most companies gain is the flexibility that business process outsourcing service providers can give them. For one, most BPO vendors charge on a fee-for-service basis. This creates a situation where the company can think in terms of variable costs, instead of fixed costs. You only pay for the level of service you need, when you need it.

Most businesses also find that they can grow faster with BPOs. For example, a company who wishes to add a call center for their customer service efforts would only have to contract a company who provides such a service. The company would be free from worrying about capital expenditures for equipment, furniture and personnel. What’s more the company will not be burdened by sourcing, hiring, and training new employees to man their call centers. So in effect, the company gains a call center filled with expert agents almost instantaneously and at a fraction of the cost of setting up their own.

A business process outsourcing vendor can also help you focus on your core business. With administrative and non-core processes out of the way, your managers can focus their energies on training your people, closing important business deals, research and development and other areas that directly affect the bottom line.

Common business sense, however, dictates that a company should choose their BPO provider well. You just cannot trust just anybody with your business and your company. Always ask around for recommendations and go with someone you can trust. Further, choose a company with a proven track record on giving their clients the best service at the lowest fees!

Maybe not. Saleforce.com’s suite of customer relationship management applications are admittedly very complex. Fortunately, there are companies that offer systems administration support for its CRM applications.

From installation, operation, troubleshooting and repair, to maintenance, customization and deployment, Salesforce.com system administrator services make sure that you are able to maximize the software you acquired from SalesForce.com. It is like having dedicated personnel focused on running, maintaining and troubleshooting your customer relationship management applications.

At a fraction of the cost of having an in-house systems administrator, outsourced Salesforce.com system administrator services basically give you comprehensive support and provides you with an administrator who knows your company’s customer relations goals, is well versed with your business, best practices and resources. This ensures that you are able to use your applications without hitches, lessen your downtime and guarantees the efficient running of your company’s customer service.

In short, you get to work with experts that know the system inside out. No more hiring in-house tech support personnel who could very well be a novice when it comes to Saleforce.com systems. No more training external people. Plus, no more worrying about putting important and classified customer data in danger of being wiped out or compromised. You will appreciate the savings in cost and the peace of mind you get! Further, you can reallocate your resources and spend these savings on some other things that are more vital to your success.

Further, when you outsource a team of experts focused solely on Salesforce.com system administrator services, you are assured of a high level of competence, because of this focus. It is what they do day in, day out.

Depending on the level of support you avail, what you get is priority toll-free phone support 24 hours a day, 7 days a week, as often as you need it. Response is guaranteed within as short as two hours to two business days! What is more, Salesforce.com system administrator services also helps you avoid any problems by providing preventive maintenance and annual health checks.

Most importantly, Salesforce.com system administrator services enable you to adapt to the changing times. Businesses change, customers change, the economy changes. A business environment can be very dynamic and the only way for you to succeed is to constantly evolve and address those changes and the challenges it brings head on. With Salesforce.com system administrator services, you are sure that you can tailor fit your Salesforce.com customer relationship management application to suit your changing business needs. Their post-deployment configuration and advanced optimization features guarantees that you are able to meet these changes head on and provide you with the means to address these changes.

The biggest reason to consider outsourcing services to third parties is that it allows you to substantially save on administrative costs and overhead. You do not have to pay for a team to handle accounting, payroll, and other similar services in your company. You do not have to expand your offices to accommodate all these people. You do not have to shoulder additional expenditures on office equipment, furniture and utilities.

Additionally, you will not have to worry about hiring and then subsequently training people to do these tasks for you and your company. Instead, you get highly trained and experienced professionals to do these miscellaneous tasks for you. Outsourcing services to other organizations guarantees that your tasks are being done by a team of experts who have been doing the same thing for other companies for years. And because of that, outsourcing companies and their people have the best know-how and strategies for the tasks. In effect, you get the best possible work done at tremendous savings.

With the right outsourcing company, you can easily have a team who can do your tasks efficiently and competently. They usually charge by the hour, so you do not have to pay extra for the times when they are not working for you.

Companies that provide outsourcing services allow you to focus on your core businesses. You should not have to worry about recruitment, training, payroll matters, miscellaneous tasks, or even getting your presence on the Internet. Instead, you could focus on closing that big deal, building great business networks or improving your product designs. In short, you get more time to focus on building your business. If it does not add value to your business but is a necessary part of it, then consider outsourcing.

With the advent of the Internet and the overall improvements in technology, outsourcing is not just an option for big companies. You would be very surprised that small and medium-sized companies, and even entrepreneurs, have been availing of outsourcing services and have found tremendous success because of it. Outsourcing is now available to everybody and anybody interested. Further, there is really no odd jobs that you can not outsource; you can outsource just about any function you might have.

It used to be that for organizations to succeed, they have to be in the same physical location. As recent as 10 to 15 years ago, working harmoniously with people from another state was unheard of, more so with people from across the globe.

With the developments in technology and the overall shift in thinking on how things work, processes became more and more globalized. It became possible to have a sales offices in Europe and Asia, while maintaining headquarters in the United States. Not only did technology make it possible but also more cost-efficient. Businesses soon saw the savings and passed it on to consumers. These globalized processes have been applied to just about anything: from personal interaction to business solutions. So now it is not only very possible to have teams that work from various parts of the world, it also makes sense if you look at it from a logistics and financial perspectives.

Having a virtual secretary in this global marketplace is the right thing to do if you want to save up on costs, space and time. Hiring one will save you the headaches of going through the recruitment process, sifting through different candidates, and having to deal with unqualified applicants.

Hiring a virtual secretary ensures that you get fast, efficient and top-notch service. They are highly flexible, available to work for you no matter if you require a few hours of support per week or full time secretarial services, and may be available for work outside of your normal office hours when conventional staff may not. What is more, you don’t have to worry about office space and office equipment because most companies that offer the services of a virtual secretary have their own.

Virtual secretaries also save you on overhead staff cost: you pay only for the actual hours they worked. No more worrying about benefits, sick leaves and other stuff that raises overhead by almost three times their salary per staff. You do not deal with employment agencies with their high fees for inconsistent and unqualified staff.

Companies that offer the services of a virtual secretary also make it a point to ensure your success. That is the only way that they can keep you as a client. In effect, you are assured of a qualified, competent and professional assistant without the high cost of conventional full time secretaries.

Since contact centers increasingly are a company’s first line of contact with existing and prospective customers, choosing the right call center representative and training them have an enormous impact on customers’ loyalty and satisfaction.

I wrote an article discussing the qualities that an employer should look for in a call center representative, as well as how to make your existing call center representatives excel. You can read the article here.

There are a number of diverse types of outsourcing. Some companies outsource limited functions, while others outsource entire operations. Let’s take Microsoft for example; their entire manufacturing process is outsourced. Naturally, fees are involved in outsourcing depending on the services required, and in cases like Microsoft, the contract can run into millions and billions of dollars, and it becomes common for the client’s employees to be transferred to the vendor company. Companies such as IBM, HP, EDS and Accenture are some of the leading outsourcing companies offering their services.

Those who outsource entire operations can be categorized in two; Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO). The later is sub-divided into call centre outsourcing (CCO), human resource outsourcing (HRO), finance and accounting (FAO) outsourcing, and claims processing outsourcing (CPO).

1. Information Technology Outsourcing (ITO)
2. Business Process Outsourcing (BPO)
2.1. Call Centre Outsourcing (CCO)
2.2. Human Resource Outsourcing (HRO)
2.3. Finance and Accounting Outsourcing (FAO)
2.4. Claims Processing Outsourcing (CPO)

Essentially, any business process can be handed over to outsourcing companies. Most common processes are marketing, web design & maintenance, web hosting, IT maintenance, manufacturing, accounts, recruitment, switch board (telephone answering), logistics, distribution (i.e. of newsletters, mail shots), editing (i.e. of articles, newsletters).

There are countless reasons why a business should consider outsourcing. Some businesses may lack of existing skills necessary to complete a process, turning over this process to outsourcing companies may guarantee a higher success rate than if the business itself runs it.

Another reason is that the process may be difficult to control, in general, or perhaps due to business growth. Experienced outsourcing companies already have the necessary skills and knowledge to manage the process for you. Additionally, the process can be performed better, cheaper, and faster too.
If a firm has poor internal service, which may or may not be connected to lack of skills, or sometimes, a company may find itself lacking the resources, or the resources are not available in-house at all, in order to complete the process, such as the case for smaller companies. Outsourcing companies can provide the win-win solution.

Other reasons may be that you require your employees’ time elsewhere in the business and the process may not contribute to competitive advantage. Outsourcing helps companies to streamline their business operations by allowing them to focus on core income generating activities.
Outsourcing companies gives businesses access to professional capabilities, therefore leveling the playing field for smaller companies. It minimizes risks by sharing it between the company and the outsourcing provider – who has the skills and experience for managing the risk better, giving businesses peace of mind that the process is in good and reliable hands.

With outsourcing, firms do not have to worry about constantly initiating new technologies to keep them competitive. A good outsourcing vendor will already have this covered for them. Outsourcing frees up human resources, letting companies focus their employee’s activities on more crucial tasks. Outsourcing frees up cash flow by converting fixed costs to variable costs. Furthermore, it improves service quality, increases the control of your business, and enables the business more flexible to change/demand.

No. 1: THINK LONG TERM

•    Look for a firm focused on a relationship and longevity.
•    Make sure that both you and your potential vendor are looking for a long relationship.
•    When looking to outsource, a vendor that is focused on building a relationship and becoming a valuable partner is critical.

No. 2: COMMUNICATION IS KEY

•    The most important thing in an offshore relationship is to dedicate people at both ends to keep track of project progress.
•    The biggest risk to offshore projects is the gap that often develops due to poor communication between the client and offshore team over changing requirements. The best way to prevent this gap is to have an agile methodology in place.

No. 3:  HIGH VALUE NOT LOW COST

•    If you’re looking to outsource, don’t look for the cheapest provider.
•    In addition to technical skill, you should evaluate their responsiveness, the types of questions they ask, and their ability to manage complex projects.
•    Start with an attitude of caution until the vendors prove themselves by meeting incremental milestones.

No. 4: KNOW WHAT YOU WANT

•    There are two kinds of offshore outsourcing shops. The first are low cost ” sweatshops” who take your specs and run the project. This is fine if you have solid specs and are looking for a team to simply execute. The second kind are companies that have experience with highly complex projects in specific industries. They’ll have the expertise to add value to your project by asking “what if” questions and challenge your assumptions. They will act as a partner and a peer rather than a vendor. These companies are few and far between. The way to find them is to ask what role they’ve played in the projects they’ve worked on.

No. 5:  A SIGN OF MATURITY IS THE ABILITY TO SAY ‘NO’

•    You need to be looking to outsource with a partner that can be honest with you from day one, even if it means they might lose your business.

No. 6: ASK HOW THEY HIRE AND RETAIN

•    Employee attrition is a big problem, so make sure you don’t get bitten. Experienced developers are constantly looking for the next best offer. Rather than asking about the company, ask about their criteria for hiring people. This will indirectly tell you about the character of the company.

SUMMARY

Outsourcing is unavoidable, so finding a firm that can set proper expectations is the only real guarantee of success. An agile development methodology, reasonable expectations, transparency and communication are critical.

One might wonder why, despite the number of other viable options in the country such as Metro Manila, overseas outsourcing companies are setting up call centers in Cebu.

Manila is known to be the economic and political capital of the Philippines. Shareholders, however, do not find Manila’s image appealing precisely because of that very reason. Investors have always sought to avoid economic and political turmoil, thus, they have opted to establish their businesses in another emerging city — Cebu. The government, having become aware of this trend, has transferred some of its political power outside Manila, setting up a presence in Cebu and subsequently making the city the center of political power in the Visayas and Mindanao regions.

Another possible reason why investors are opting to set up call centers in Cebu is the current state of Manila itself. Metro Manila is known to have a very high degree of air pollution, with 66 micrograms of particles per cubic meter. This value, compared with Cebu City’s 45 micrograms, makes Cebu a better place to live in. Manila is also known for its heavy traffic jams — a 20-minute trip may stretch out to an hour, maybe even more, especially during rush hour. Traffic as heavy as that experienced in Manila is very rare in Cebu.

Based on a study conducted by Grant Thornton, Cebu is one of the top cities noted in the Top 50 Emerging Global Outsourcing Cities list. This list is an assessment of global outsourcing destinations in relation to their capacities as service delivery centers. Cebu City has one of the highest over-all ratings on scale and quality of workforce, business catalyst, costs, infrastructure, risk profile, and quality of life.

According to the same study, Cebu City is ranked eighth in the list of Top 10 Asian Cities of the Future by the Foreign Direct Investment (FDI), a magazine of the Financial Times Group. Additionally, the same magazine ranked Cebu fourth in the list of 10 Most Cost-Effective Cities, seventh in the Best Quality of Life Category, and second in Development and Promotion, next only to Singapore.

The city’s strengths lie in key processes in the BPO industry such as customer service, finance and accounting, and HR services. In addition to this, Cebu ranks high because of its strong infrastructure, stellar literacy rate (which is at 97%), and excellent quality of living — all of which translate into better workers and lower staff turn over rates.

The city is very accommodating to businesses and can provide a thriving environment for BPO offices. And with this, 17 BPO companies or call centers have established their offices in Cebu as of early 2008.

• The cost savings, between 20% to 40%, represents a significant, sometimes in millions of dollars for these companies.
• Offshore outsourcing can mean your business is working for you 24 hours a day because of the difference in time zones.
• The Philippines has a vast talent pool of English speaking college graduates due its very high literacy rate of ninety-two point six percent (92.6%) and its more than eighty-six (86) IT universities and colleges nationwide.
• Filipinos fluently adopt accents and taxonomy, easily grasping American idioms and usage.
• Education, business, medicine and government use English as the official language.
• The Philippines is the most Westernized country among all Asian countries that provide offshore outsourcing, studies show.
• As a former US colony, its education and political systems were patterned after those of the United States, and their admiration for all things American goes beyond just mere socio-political structure.
• The Philippines has benefitted from having housed two decommissioned US military installations, Clark Air Force Base and Subic Naval Port. The country has outstanding trans-pacific communication infrastructure with a exceptional amount of voice/data communication bandwidth.
• The country is recognized as having one of the best telecommunication infrastructures in the whole Asian region, emerging as the top location for off shore outsourcing companies. Your offshore outsourcing partner in the Philippines can now be managed via videoconferencing links, internet-based collaboration tools, and standardized business application.
• Filipinos are healthier, more loyal to their employers, and have better language skills than all other offshore outsourcing countries such as India, according to recent studies by Kelly Services recent study in partnership with Singapore-based ACA Research, Inc. The same study shows that Filipinos take less time to train, which means foreign-based employers spend less for training.

With its capabilities, knowledge, language, the culture, and the infrastructure, the Philippines offers the best possible environment for achieving your organizations offshore outsourcing goals.