Category Archive: Business Process Outsourcing

1. Philippine BPO Revenues Seen Growing Amid Trump Policies

   February 11, 2017 10:00 am Leave a Comment

   

   There’s no stopping the Philippine business process outsourcing sector from growing steadily amid threats that the United States is about to enter a protectionist regime under US President Donald J. Trump.

   It is estimated that 70 percent of the Philippine BPO sector is comprised of US accounts. And ING Bank Asia chief economist Tim Condon said 33 percent of the Philippines’ foreign direct investment (FDI) inflow came from the US since 2005. FDI reached a high of 61 percent in 2014 to a low of 17 percent in 2006.

   The economist from the Dutch financial giant issued that while the Philippines is “the most exposed country, excluding Japan, to a Trump shock to US outsourcing”, growth in the BPO sector will still grow to mid-single digits in the coming years.

   “We expect the growth of outsourcing exports to settle in the mid-single digits in the medium term,” he said.

   Trump Policies

   Following the inauguration of US President Trump in January, he reportedly would like to impose a “very major” border tax on companies that would move operations offshore.

   President Trump, who met with business leaders in the US for help, wanted to revive the glory days of US manufacturing sector. Condon said ING believes Trump wants the US manufacturing industry during his regime to reach a renaissance, which in effect could boost the strength of the US dollar.

   President Trump also signed a memorandum pulling the US from the Trans-Pacific Partnership (TPP).

   While removing the US from the TPP can affect bigger economies who are part of the deal, the Philippines stands to benefit from this move.

   Capitol Economics, a London-based economic research firm, noted that the Philippines and other Asian countries that will affected by the failure of TPP are the beneficiaries for the success of Regional Comprehensive Economic Partnership (RCEP) instead.

   These countries – the Philippines, Thailand and South Korea – would have seen their growth prospects falter if the TPP triggered the formation of regional supply chains which excluded them, according to the Capitol Economics report titled, “How Big a Blow is the Demise of the TPP to Asia?” published in January 24.

   Inquirer.net shows that RCEP will group ASEAN and six other countries in the region with which it has existing regional FTAs. These include Australia, China, India, Japan, New Zealand and South Korea. There is an ongoing negotiation to form RCEP.

   The head of the Philippine President Rodrigo Duterte’s economic team already expressed interest to seek membership in the planned Asean and China-led free trade agreement (FTA) while abandoning inclusion in the TPP.

   BPO Growth in the Coming Years

   In 2015, the country’s BPO sector’s revenues – including income from information technology an other outsourcing revenues – generated an estimated $22 billion. The figure through September reflected a 10.9-percent growth from the previous year, Condon said.

   However, in the 2022 Roadmap of the IT-Business Processing Association of the Philippines (iBPAP), the country’s outsourcing sector is seen generating $40 billion in revenues. The iBPAP also predicts direct and indirect jobs reaching 7.6 million, 500,00 jobs outside of the National Capital Region, and cover 15 percent of the total global outsourcing market by the end of 2022.

   Other threats include rising office rentals and rising cost of internet and electricity services, according to property consulting firm Colliers Philippines in a separate report.

   According to the research from Colliers, advancement in automation will not be sufficient to replace human resource. Hence, automation and IT-BPM could grow together in bettering their services to companies which outsource.

   ING Bank forecasts the Philippines gross domestic product (GDP) will grow to 6.6 percent at the end of the current year, whereby first quarter growth will likely hit 6.2 percent and second quarter growth at 6.1 percent.

   Condon remarked that the GDP growth will be driven mainly by domestic consumption, overseas Filipino workers (OFW) remittances, and the BPO sector. A major factor to this growth, according to ING, is the accelerated infrastructure projects of the Duterte administration.

   Sources:
   BPO Revenues to Outpace OFW Remittances by 2018 – ING Bank
   PH Outsourcing Revenue Growth Seen Slowing
   PH to Benefit if TPP Falters Says Economic Research Firm

2. Staff Retention in Philippine BPO Industry is Improving – Survey

   February 9, 2017 12:17 pm 1 Comment

   

   Less employees working in the business processes outsourcing (BPO) sector in the Philippines are reportedly quitting their job due to improved conditions.

   It has been reported that from 70 percent attrition rate in the IT-BPM sector, the figure is now down to 50%, the Manila Bulletin reported in August 2016.

   Among companies seeking to outsource in the Philippine BPO sector, high staff turnover rate is a big letdown.

   But this improvement is seen as a continuation of previous surveys on the attrition rate in the outsourcing sector.

   A case in point is the 2015 survey by global professional services firm Towers Watson, which revealed that the 20 percent drop in the attrition rate in the Philippine BPO sector reflected the lowest ever since 2007.

   In 2011, the BPO sector registered 33 percent attrition rate while this reached 24 percent the following year.

   Sourcing Outside NCR

   Many experts claimed that the Philippine BPO industry are adopting strategies to keep their employees.

   According to Towers Watson (Philippines) global services practice head Vangie Daquilanea, companies are learning new strategies in talent acquisition.

   Daquilanea added BPO companies are expanding their local operations outside the National Capital Region (NCR).

   Today, it is not impossible to see BPO companies sourcing high-value talents from the provinces like Cebu, Davao, and Southern Luzon. In effect, this movement has affected the attrition activity in the Metropolitan Manila.

   Higher Salaries, Other Factors

   Another possible reason why outsourcing employees are staying with their companies – apart from training, government support and continuous education – is the increased salaries.

   According to Towers Watson, many BPO companies reward high performing employees while non-performers are given zero to less increases. For these companies, using Performance Matrix emphasize compensation principle of paying for performance.

   Unlike employees from other sectors, employees working in the BPO sector enjoy compensation mix which promises high guaranteed compensation.

   There are other Philippine BPO employees who receive a minimal annual performance bonus, which is equivalent to 1 to 1.5 months’ pay.

   BPO companies also allot budgets for the health and wellness of their employees. The Towers Watson survey revealed how employees in this industry are well-taken cared of by their employers.

   Employees in the outsourcing sector are usually offered as perks stress/risk assessment programs, health screening, counselling, fitness competitions, and smoking cessation programs.

   Another interesting observation has been how young people are exploring new career paths in the same sector.

   Beefing Up BPO Employees of the Future

   Benedict Hernandez, chairman and president of the Contact Center Association of the Philippines (CCAP), stressed the importance of continuous education to help upgrade skills and build capabilities of BPO employees.

   In the past, the business processes outsourcing (BPO) sector is only known for the following services it provide foreign companies: data entry, directory assistance, and call center outsourcing.

   A lot has changed in the country’s outsourcing sector over the years, especially on how services are offered to offshore companies.

   Today, Philippine outsourcing firms can confidently offer middle to higher-value services, including data analytics, infrastructure technology, social media marketing and more.

   Other developments include the expansion of what the voice segment of BPO entails in the late 1990s. Today, voice segment include email, chat, social media, multi-channel and omni-channel support.

   More recently, there has also been a bigger emphasis on giving improved lead generation, customer loyalty and retention, and increasing sales revenues through data analytics, and the likes.

   An IT-BPM Roadmap 2022 by Frost & Sullivan confirmed this development, as it predicted how voice tasks will continue to fall by 28 percent while mid-skilled tasks will see a dramatic surge by 7 percent.

   Companies offering complex services that require high-skilled tasks gets to enjoy the surge in demand for these category.

   Frost & Sullivan predicted a 48 percent rise in demand for high-skilled tasks.

   This roadmap showed that a mere 16.6 percent ($166 billion) of the $1-trillion sourceable work across the globe have been outsourced.

   Out of this outsourcing pie, the Philippine outsourcing providers account for $22 billion. Up this date, the Philippines remains the top global destination for outsourced voice services.

   Under the 2012-2016 roadmap, the country’s IT-BPM sector eyed for $25 billion in revenues and 1.3 million jobs. According to the roadmap, the voice sector accounts for 70 percent of the country’s IT-BPM industry.

   References:

   http://2016.mb.com.ph/2016/08/14/it-bpm-attrition-rate-dramatically-improves/

   Why staff turnover in Philippine BPO industry is falling

3. How to Detect Business Process Improvement Mistakes

   October 8, 2013 10:55 am 1 Comment

   

    

   Sometimes, even with the best intentions, mistakes and failures still occur to anyone or any business for that matter. Yes, failure knows no boundaries even if these efforts are viewed vital at improving business processes by cutting costs, time or both by streamlining tasks such as business process improvement strategies.

   From generating a report to resolving a complaint from customer, and more of the likes, it’s very likely you’ve already encountered an instance when the results turned out bad because of the inefficient processes applied. Some example outcomes are missed deadlines, redundant expenses, stressed workforce, and frustrated customers.

   Use this article then as a guide in detecting early signs or symptoms of business process improvement failure and find out what your business can do about it.

    

   What Business Processes Is

   There are plenty of processes that you have surely used or come across by now in your business. But they can be divided into formal and informal. The former means procedures that are documented and have well-established steps. The processes involved in receiving and submitting invoiced is just one example. Safety-related, legal or financial rationales are considered factors that determine whether or not formality in enacting processes is necessary.

   On the other hand, informal processes do not follow any formal deliberations or complicated procedures. Often, these are created by yourself and mostly unwritten rules. Examples of informal processes are taking down meeting actions, market research approaches or communicating with prospective customers.

    

   Importance of Efficient Processes

   The common denominator that all these different kinds or types of processes share is their purpose: to improve the way you and your team do business by streamlining processes or tasks. A well-organized, systematic step-by-step approach in handling processes can mean less delays, as well as fewer mistakes or errors, less redundancies or duplication. Efficient processes result in satisfied customers and staff.

   Which is why this has been a motivation among managers and corporate leaders to elevate their departments to the level of ‘business enabler’ or ‘business multiplier’. With the rights and privileges attached therein, managers earn respect from peers and partners in business. Business process improvement efforts are undertaken to bring more efficiency to the business. Efforts such as this can have the managers of certain department take the lead.

   Still, mistakes do and can still occur when business process improvement commitments are executed. A listing of ways to detect mistakes and how to avoid this from happening follows.

    

   Lack of Support from Top-Level Management

   Plans to initiate significant business process improvement must gain the approval of top management. Minus these support, it’s more than likely to fail or outcomes not reaching everything planned out. Support from the top can create the impression that the project is important, deserving of full time and support to ensure success.

   In its true sense, business process improvement initiatives can be very difficult to execute so it is important that reinforcement from top-level management are ensured. Support and appreciation from them can serve as motivation for its success.

   In order to get the support of top management, the project must first obtain public support for the process improvement effort. The commitment must be firm and established from all major stakeholders before starting the project.

    

   Organization is Not Ready, Culturally

   Organizational culture plays a vital role in ensuring business success. But it is this same factor that can impede or cause interruption to any business process improvement initiatives. One sign that an organizational culture poses a challenge is when employees refuse to take part, showing their angst when process improvements are being undertaken.

   So before you start with your initiative, take a calculated, slowed-down approach to ensure that the leadership is first squarely on board. The time will allow you to observe and see for yourself if the importance of the business process improvement effort trickles across the organization. Getting the commitment of all in writing, because this helps get the idea who are committed.

    

   Team Members are Uncooperative

   Or maybe, the problem lies not from your organization’s culture but from workers who are hostile or antagonistic about the overall business process improvement process. When every staff member is expected to give their full support and involvement, it should play out well if they are cooperative. Undetected and uncorrected, your business process improvement project will suffer miserably. Solving this entails careful research to find out what’s behind the antagonistic mood.

    

   Failing to Get Representatives from Project Teams

   Business process improvements are good thing but if you want to see its untimely demise right in front of your eyes, consider to overhaul the whole process by not inviting key personnel whose stakes in the process need their consent. All small or big stakeholders need to be represented before, during and after the implementation of the effort. Insights and experience of all these stakeholders must be collected and understood in order to improve the process.

    

   Wrapping Up

   Keep in mind that failures do happen but there are steps that can be taken to avoid a worst-case scenario in undertaking a business process improvement initiative. The process may not be perfect the first time you execute but there are key continuous improvement strategies that you can adopt to ensure that your process improvement frameworks stay up-to-date, efficient and relevant.