Contents
Outsourcing: what is it?Simple DefinitionOutsource Services DefinitionBusiness Strategy DefinitionBusiness Process DefinitionBusiness Process OutsourcingAs An Outsourcing ProcessAs A Business ProcessAs An Industry ProcessBPO AdvantageFor solopreneurFor SME companiesFor large corporationsDistinct business areas to outsourceThe Different Types of OutsourcingOutsourcing vs. OffshoringDifferent Outsourcing ModelsStaff LeasingSeat leasingBusiness Process OutsourcingBuilt-Operate-TransferThe Philippines, IncorporatedThe TimelineGovernment InitiativeWhy The Philippines?The Human Capital of the PhilippinesOutsourcing SuppliersA call center is part of the broader outsourcing industryCall Center OutsourcingExpansionSectorsIndustriesExamplesTalent SolutionsResources
Outsourcing: what is it?
What do you mean by outsourcing?
âBPOâ has been making its way in the business industry, changing how processes work.
The basic point of outsourcing is to bring in external specialists and knowledge to take over the business functions that would otherwise crowd the employeesâ task lists or those that are not performed well because of the lack of employee expertise.
Simple Definition
We can describe outsourcing as:
a modern practice of contracting a particular business process or work processes to a service provider outside the company.
It can include various services depending on what your business needs.
Outsource Services Definition
However, outsource services are more about filling supplementary business processes:
a service that fills supplementary business processes such as accounting, payroll, data recording, telemarketing, customer support, and other tasks that are not considered as part of the core business functions
Business Strategy Definition
From small start-up companies to massive corporations, outsourcingâs explanation is that it can provide plenty of benefits and advantages, especially when it comes to getting ahead of the competitions in the industry.
We can also define job outsourcing as a business strategy:
a business strategy to help cut process costs and spending while simultaneously growing the business and increasing its profits
Because of that, there is a rapid growth in the BPO industry.
Business Process Definition
The businessâ front office services are all about contracting customers and services that involves it such as tech support and marketing. Back office services, on the other hand, pertains to the internal processes such as billing and purchasing.
While these services work differently:
outsourcing functions as a process that can combine unlike services, making them work together instead of working independently.
Each of these services, when not kept in tight reins, can cause a huge drain in both the companyâs resources and budget. Any cost-cutting method or strategy is always helpful, and outsourcing is well on its way in that case.
The business' front office services are all about contracting customers and services that involves the area of service such as tech support and marketing.
Back office services, on the other hand, pertains to the internal processes such as billing and purchasing.
While these services work differently, outsourcing functions as a process that can combine unlike services, making them work together instead of working independently.
Business Process Outsourcing
The basic point of outsourcing is to bring in external specialists and knowledge to take over the business functions that would otherwise crowd the employeesâ task lists or those that are not performed well because of the lack of employee expertise.
As An Outsourcing Process
- BPO reduces business costs and expenditures.
- BPO gives a company the means to keep their overheads on a tight rein while also growing the business at the same time.
As A Business Process
- BPO allows businesses to fulfill their processes and obligations to both their employees and customers while keeping a tight control of their overhead costs at the same time.
- BPO also has a significant potential of freeing up employeesâ valuable time within the company from doing time-consuming everyday tasks, giving more of that time to creating better strategies for business growth.
As An Industry Process
- BPO doesnât only provide advantages in terms of core products and services
- BPO helps optimize the businessâ complimentary areas, as well as the knowledge of the new and emerging markets and trends to get ahead of industry competitors.
With this understanding on how outsourcing can be integrated in a business structure, there are a number of significant advantages of using this approach on various kinds of businesses.
BPO Advantage
For solopreneur
In truth, outsourcing works not only for those multinational companies as what most people believe. Even small-medium business owners can take advantage of outsourcing.
Making a business successful is not an easy feat with a large staff much less when you only have yourself to run the whole process.
The main benefit of offshore sourcing for solopreneurs is increasing the efficiency and speed of business processes. You canât handle all specific business operations by yourself all the time and still expect that your company will be efficient and successful.
With reliable external service provider handling the menial tasks within your company, you will be able to significantly free up your time to focus more on core business functions and duties. You will be able to maximize your time, as well as your resources, to produce high-quality services or products.
There is a growing trend of small and medium business enterprises which significantly boost the economic growth. They also carry a potential to grow even more with the advantages of offshoring activities.
For SME companies
While most people believe that outsourcing can be expensive for small scale businesses, BPO is considered as a cost-efficient business solution that can work not only for large companies, but also for SMEs. Even a small business can cut its overhead cost and payroll costs by outsourcing certain business functions.
Small businesses often suffer from resourcing staff with expertise to accomplish specific business tasks (accounting, IT services, etc).
BPO offers any company the same opportunity and ability to deliver high-quality output from professionals as large corporate players in the industry.
outsourcing advantages for SMEs:
- high flexibility
- financial freedom
- efficient business processes
- saving time and resources significantly
- freedom to choose what business tasks you want to retain within the company and what to outsource from service providers
For large corporations
What is an outsourcing company, especially a big one, benefit from this business strategy?
Large corporations are often hard to work around as there is always an influx of business tasks to accomplish. There are far more deciding factors to consider to achieve the companyâs success. As such, it is mostly hard and taxing to have a seamless business operation.
The biggest pull for large corporations to consider outsourcing some of their business processes is to lower their costs. It significantly reduces expenses for certain functions such as manpower costs and equipment costs.
Advantages for Large Corporations:
- advantage in terms of time-driven operations
- reduce fixed costs allocated for traditional manpower
- financial resources can be directed to revenue-producing processes to achieve business growth
- eliminates the need for in-house employees to multitask, now giving more time to focus on developing strategies and competencies to achieve operational demands.
- access to industry experts and trained personnel specializing in a particular niche to improve the businessâ performance
Distinct business areas to outsource
There are a wide range of services to outsource one can acquire from third party providers that provide outsourcing processes to support various business areas.
The Different Types of Outsourcing
Aside from knowing and understanding what outsourcing is from the definition of outsourcing jobs and how they work, it is also necessary to have an idea of the different types of outsourcing.
Traditional original outsourcing | |
Advisors, consultants and agencies | |
Common outsourcing specialisation | |
Common in high-complexity sectors | |
âMade in Chinaâ is stereotypical outsourcing | |
outsourcing one specific function of a business | |
Typically big or complex projects are outsourced | |
Emphasising the offshore location | |
Outsourcing to domestic suppliers | |
Outsourcing to near or neighbouring countries |
Outsourcing vs. Offshoring
Whatâs the difference and why is it important?
Outsourcing is contracting a business process to a third-party service provider.
Offshoring or overseas outsourcing, on the other hand, takes advantage of having an offshore center, and sends business functions to a services provider located in a different country
Different Outsourcing Models
Staff leasing vs. seat leasing vs. BPO vs. B-O-T and Recognizing the Pricing, Labor Costs and Internal Revenues
Staff Leasing
Staff leasing is an outsourcing model where there is a contractual agreement for employee recruitments with a leasing company or a PEO (Professional Employer Organization). This is most suitable for companies that aim to hire in-house and remote workers with less risks and resources
Seat leasing
Seat leasing is an outsourcing business model where clients prefer to handle the recruitment, training, and management of their employees, without wanting to concern themselves about physical assets such as desks, computers, internet connections, and maintenance of facilities.
Business Process Outsourcing
A comprehensive business process outsourcing pertains to having a long-term agreement and relationship between a company and an external service provider. The provider is required to handle business functions such as administration, content, delivery, and technology.
Built-Operate-Transfer
Build-operate-transfer (BOT) is a form of outsourcing where a business creates a partnership with an offshore agency or business to build and operate the business.
During the building stage, the agency will build the business infrastructure from scratch, which already includes personnel, office space, licenses, and all essentials. At a later stage, once everything is ready, the business will be transferred to the owner.
In outsourcing, clients using BOT usually start with staff leasing or seat leasing, which will be transferred once they are ready to handle the team on their own.
The Philippines, Incorporated
When you talk about outsourcing and its history in the Philippines, Accenture will always come up. Business Process Outsourcing or BPO in the country started from a single contract from the said company.
Frank Holtz founded Accenture Global Center in 1992. It outsourced work in the country and offered management consulting and professional services all over the world. It now has 50,000 employees in the Philippines alone. Among the businesses that outsource, Accenture remains one of the top BPO companies in the Philippines.
The Timeline
Here is a brief overview of the significant events that led to BPOâs success in the Philippines:
1992 â Accenture, founded by Frank Holtz, set up the first contact center. It was located at Robinsonâs Cybergate 2 tower in Mandaluyong City.
1995 â The Philippine Congress passed the Special Economic Zone Act providing tax incentives to foreign investors.
1997 â Sykes set up the first multinational BPO Company in the Philippines which focuses on inbound call center support.
1999 â Jim Franke and Derek Holley founded eTelecare.
2000 â Â 0.075 percent of the countryâs GDP was recorded to have been generated by the BPO Industry.
2005 â The Philippines was reported to comprise up to 3 percent of the Global BPO market.
2010 â The country was becoming the worldâs BPO capital with 525,000 call center agents and approximately $8.9 billion in revenue
2016 â The BPO Industry reached an annual growth rate of 17 percent.
All these events have been significant in establishing why outsourcing in the Philippines has been lucrative, and why the country was also referred to as an ideal outsourcing destination for offshoring companies.
Government Initiative
President Gloria Macapagal Arroyoâs 2001-2010 administration is oft considered the decade that pioneered and [sustained](https://www.worldbank.org/en/news/feature/2012/01/10/philippine-economic-update-2012-accelerating-reforms-to-sustain-growth#:~:text=* The Philippine economy is one,and recovery of government spending.) The Philippines' rank as one of the fastest economies in the decade that followed. Arroyoâs focus on foreign investment, namely her BPAP initiative which promoted and capitalized the competitive advantages of Filipinos in existing and new areas of outsourcing as Philippines Incorporated.
Prior to Arroyoâs administration, there were 2,400 call center workers in the nation. Today [there are 1.3 million](https://www.manilatimes.net/2022/09/05/public-square/call-center-outsourcing-philippines-a-bright-future-awaits/1857304#:~:text=If anything%2C experts project the,time employees by year's end.).
The 2010s brought outsourcing to areas such as offshore marketing, education and training, security and privacy, legislation and policy â expanding to every pocket for digital adoption in the 2020s where BPO in the Philippines has remained the single biggest contributor to the nationâs economic activity.
Why The Philippines?
Ever since Accenture launched its first contact center in the Philippines, the number of big companies that outsource in the country has been steadily rising. Accenture put the Philippines on the map of modern industrialization through outsourcing.
Accenture was the first company that recognized the country as an excellent source of talents and professionals. Its trust in the companies helped in establishing why companies outsource in the Philippines.
It has taken a risk by offshoring, and now, the Philippines is known to be the âBPO Capital of the world.â Due to its fast growth and development, the BPO Industry in the Philippines is still one of the top outsourcing destinations in the world.
The BPO sector has been generating, as of 2015, $22 billion in revenue. It might even surpass the revenues generated by the Overseas Contract Workersâ, which have been the most income-generating Filipino workers for decades.
The Philippines is now maintaining its position among if not the top choice of companies that outsource.
- The continuous expansion of training facilities for English proficiency can help the Philippines preserve its high ranking in the English Proficiency Index. Ensuring its current status is essential since It is one of its most respected and sought-after qualifications.
- The country guarantees to continuously construct infrastructures conducive and ideal for outsourcing is essential. Itâs also imperative to preserve the governmentâs support for all outsourcing opportunities.
- Outsourcing agencies in the country may also create new laws, rules and regulations, government courses, and training that will ensure the quality of BPO candidates.
All this can contribute to the countryâs knowledge on how does a BPO work.
StaffWiz is just one of the thousands of premier BPO providers situated in the country. Businesses from across the globe are given the opportunity to build their remote teams to support their growing business through StaffWiz.
Being aware of what outsourcing companies do helps in establishing expertise on what the clientsâ demands are and how the Philippines can meet them. It will give the outsource service providers an insight into what an outsourcing company is looking for.
By genuinely appreciating the positive influence outsourcing jobsâ positive influence on the Philippinesâ economy, effective strategies can be implemented.
The Human Capital of the Philippines
The BPO (business process outsourcing) industry plays a vital role in the emerging economy of the Philippines and contributes over 11% to the GDP. It is the single largest sector and employs over 1.2 million people, spread across some 700 outsourcing companies.
The business process outsourcing industry in the country continues to grow in the post-pandemic world. Hitting a US$26.7 billion growth in 2020, BPOs, especially call centers, quickly adapted to remote working to serve their clients better.
As the world slowly opens up again, call centers are expected to remain a major contributor to the Philippine and global economy. For this, the industry projects a US$29 billion revenue and more jobs to generate by 2022.
The countryâs business process outsourcing industry is what it is today thanks to call centers. They laid out the foundations of the industry and paved the way to being able to offer more services to global clients.
A global business would typically need help navigating the roundabouts of call center outsourcing.
Outsourcing Suppliers
Notable companies that placed their trust in the human capital of the Philippines and built world-class outsourcing operations as a result.
A call center is part of the broader outsourcing industry
A call center is a part of the broader outsourcing industry, which can also cover business process outsourcing (BPO), shared services, seat leasing firms, as well as home-based outsourcing, and even virtual assistants and freelancers. Call centers can be located onshore (domestic market) or offshore.
The terms for each of the above firms can be used somewhat interchangeably. Call centers generally refer to the larger business that caters to enterprise clients and processes high-volume, high-repetition tasks, such as customer service, sales, and account management.
Call Center Outsourcing
Top call center companies in the Philippines that global businesses rely on for variety of âcallâ support
Expansion
Outsourcing is a broad category that covers many different staffing solutions and outsourcing firms.
In the context of the Top 40 BPO companies in the Philippines list, business process outsourcing (BPO) firms are categorized as the newer, and typically smaller, firms that offer the modern form of outsourcing.
The newer generation of outsourcing firms typically offer a broader range of staff roles, on more flexible terms, at a lower margin (transparent pricing), and cater more to the small- and medium-sized business (SMB) sector clients, instead of the bigger enterprises.
Typical BPOs can also be referred to as âseat leasingâ or âstaff leasingâ and may also offer virtual assistant (VA) services, staff augmentation, and a range of ânon-voiceâ services.
Outsource Accelerator also publishes the Top 40 Call Centers in the Philippines, which covers the larger, more traditional high-volume call centers which typically offer voice and customer service (CS) services and cater to multinationals and enterprises.
Sectors
- Admin Support
- Agency Contract Partner
- Animation & Multimedia
- Build-Operate-Transfer
- Customer Service
- Digital & Content Marketing
- Engineering & Architecture
- Finance & Accounting
- Full service BPO
- Human Resource & Legal
- Office Leasing
- Output-based
- Outsourcing Consultancy
- Seat Leasing BPO
- Software & Application Development
- Specialized BPO Vertical
Industries
- Advertising & PR
- Construction Renovation
- Consumer Services
- Digital Marketing
- Ecommerce
- Education
- Educational Businesses
- Energy
- Entertainment
- Financial Services
- Food & Beverage
- Game Dev & Support
- Government
- Hardware Tech/IT
- Healthcare
- Hospitality
- Legal
- Manufacturing
- Media Publishing
- Mining
- Non Profit
- Others
- Pharmaceutical
- Public Utilities
- Real Estate
- Recruiting Staffing
- Retail
- SaaS
- Software Tech/IT
- Telecoms
- Transportation
- Travel
- Utilities
Examples
Talent Solutions
Find the talent, lease the workstation, expand.
END-TO-END SOLUTIONManaged ServicesGet a dedicated, full-time team with a highly-skilled offshore manager to oversee your team and business processes to ensure positive results. We take care of everything on the ground letting you focus on whatâs truly important for your business.COST PLUS MODELStaff LeasingBuild your own remote team of talented professionals to explore opportunities for market growth. We will handle recruitment, onboarding, and the HR side of things while you focus on your operations and teamâs performance.HR & PAYROLLEmployer of RecordWe take care of onboarding, payroll, benefits, HR and the legal and compliance side of employing resources in the Philippines so you can focus on getting results for your business.TRAINING & DEVELOPMENTTraining & Quality SolutionsUpskill or reskill your team with the skills they need to handle more strategic and value-adding work for your business.
The IT Guy to keep everything running and virus free for your dedicated employee.The HR staff to find and retain your dedicated employee.The supervisor to make sure your dedicated employee is on-time and on task.The Payroll clerk to calculate and pay your dedicated employee.The space your dedicated employee works in, including cubicle, chair,etc.Enterprise grade telephone from a Tier 1 vendor with Headset.A dedicated phone line with unlimited incoming/outgoing calls.The Janitor to clean up after your dedicated employee.The desk, chair, computer.The power and redundant power.The office space and internet.The paper, ink, office supplies, cleaning supplies and bathroom supplies and a whole lot
Resources
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