3. Introduction
Business Process Outsourcing (BPO) is outsourcing of business
functions generally performed by white collar and clerical
employees to achieve several benefits such as cost savings,
better quality and ability to focus on core competence.
BPO involves outsourcing processes that are not central to a
company but are essential for smooth operation of the company.
The customer transfers the wide ranging responsibility of these
functions to the merchant who guarantees certain service quality
standards. Such processes include customer service, payroll
processing, inventory management, etc.
This unit is designed to help the students to give overview in
Business Process Outsourcing Industry and how BPO integrate the
approach of consideration and interrelationship among different
functional areas in commercial business in the Philippines. The
student is also exposed to a set of qualitative and quantitative
topics aimed to enhance process-¬oriented thinking, in order to
develop the information and skills necessary to appreciate the
fields in BPO industry.
4. The Philippines’ Information Technology and Business
Process Management (IT-BPM) sector is one of the
best-performing and employment generating
activities in the past years. Its global leadership in
voice-based services as well as continuing
improvements in non-voice and complex process
outsourcing show the promising growth
trajectory(path) of the IT-BPM sector. To be able to
cement its position in the global IT-BPM sector, the
Information Technology and Business Process
Association of the Philippines (IBPAP) has advocated
for deeper policy reforms which will support
employees’ skills development and maintain a
competitive business environment for the industry.
5. The industry's initiatives focus on four action areas: (1)
widening and deepening human capital by scaling up
industry public-private partnerships; (2) strengthening
Philippine attractiveness as an investment destination
through advocacy activities; (3) achieving Roadmap 2016
goals by leading cross-sectoral efforts; and (4) building
Philippine IT-BPM brand globally through marketing
programs.
As of 2010, the Philippines’ IT-BPM sector has already
overtaken India’s standing in voice-based services, making
the country the number one provider for such services in
the global economy. Voice-based services is also identified
as the largest contributor in the local BPO industry,
comprising 64% (493,000) of generated direct employment
and 67% ($ 7.4 billion) of total revenues in 2011. Aside from
this, several non-voice and complex BPO services such as
healthcare information management, knowledge process
outsourcing, engineering, animation, and software
development are gaining prominence in the global BPO
sector and are in a higher growth pace vis-à-vis voice-based
businesses.
6. The global position of the Philippine IT-BPM
industry is largely attributable to the strong skills
of the Philippine labor force. In voice-based
services, Filipinos hold competitive advantage in
English communication skills, strong customer
service orientation, and adaptability to
consumers’ Western culture. In non-voice and
complex services, The Economist and Everest
Group analysts report the growing number of
businesses providing healthcare information
management, human resources management,
business intelligence, and offshore financial
consulting in the Philippines. Coupled with
Filipinos’ hard work and openness to learning,
these two existing advantages provide investors
with a strong advantage once they set up shops in
the country.
7. Outsourcing has become a major trend in human resources over
the past decade. It's the practice of sending certain job
functions outside a company instead of handling them in house.
More and more companies, large and small, are turning to
outsourcing as a way to grow while restraining payroll and
overhead costs. How can you make it work for your business?
First, make sure the company you're hiring can really do the
job. That means getting (and checking) references. Ask former
or current clients about their satisfaction with the client. Find
out what industries and what type of workload the firm or
individual is accustomed to handling. Can you expect your
deadlines to be met, or will your small business's projects be
pushed aside if a bigger client has an emergency?
Also, make sure you feel comfortable with who will be doing
the work and that you can discuss your concerns and needs
openly. Ask to see samples of work if appropriate (if you're using
a graphic design firm, for example).
8. One outsourcing option is to hire independent
contractors. Instead of hiring an in-house bookkeeper,
for example, you might outsource the job to an
independent accountant who comes in once a month or
does all the work off-site. Independent contractors can
be more flexible and lower in cost than outsourcing
firms. As with outsourcing firms, however, before hiring
an independent contractor, make sure the individual
you use can do the job.
If your outsourcing needs are handled by an individual,
you're dealing with an independent contractor. The
IRS(International Revenue Services) has stringent(strict)
rules regulating exactly who is and is not considered an
independent contractor. The risk: If you consider a
person an independent contractor and the IRS later
reclassifies him or her as an employee, you could be
liable for that person's Social Security taxes and a wide
range of other costs and penalties.
9. Outsourcing refers to the technique in which
businesses entrust the processes of their company
functions to external vendors’. Every company
process that can be performed from an off-the-shore
location can be outsourced.
This includes functions such as payroll, transaction
processing, transcription services, call center
services, image manipulation services, order and
inventory management, just to name a few.
One of the leading misconceptions when it comes to
working with virtual staff is assuming that a single
employee can handle every single thing for you. This
is nothing but a “super VA myth,”(virtual assistant)
and you ought to know that it is not possible (not in
the virtual world, and not even in the real world).
A virtual assistant is a self-employed worker who specializes in offering administrative services to clients from a remote location,
usually a home office. Typical tasks a virtual assistant might perform include scheduling appointments, making phone calls,
making travel arrangements, and managing email accounts.
10. So as to efficiently utilize virtual assistants as you grow your
firm, you are required to hire people for the roles, and not
the tasks.
This implies that you need to build up a team. This team
will work collectively to achieve everything you are aiming
for as an entrepreneur or business director. It’s with this
concept in mind that I decided to compile this list of tasks
you could outsource to virtual staff and grow your business
more efficiently.
It is essential to appreciate and acknowledge that no single
individual can handle all these different tasks. So, let's start
by taking a look at some of the valid and compelling
advantages businesses experience from outsourcing their
tasks so they can pay attention to the core business
activities.
For lots of businesses, the prime reason they outsource is so
that its employees, managers, and free owners can focus
their attention on more income generating activities.
11. The prime reasons they outsource are:
1. Improves opportunities for growth.
Every day-opportunities for business growth and a
desire to develop your company’s operations exist,
but resources to make all these happen are lacking.
Outsourcing will create some free time for numerous
employees, and this could be everything you need to
take full advantage of the daily opportunities.
2. Increasing effectiveness and efficiency.
In most cases, outsourcing permits access to skilled
talent. Even more, outsource businesses can offer,
latest technology, innovative approaches, and
creative, cutting-edge solutions that otherwise are
not available.
12. 3. Generally, improves your bottom line by
reducing your expenses.
A skilled firm or contractor can generally execute
tasks more cheaply compared to hiring a full-time
employee. This implies that the costs of employing,
coaching, and maintaining workers are eliminated
and so are benefits and tasks.
4. Risk sharing.
One of the most critical factors determining the
outcome of your campaign is risk analysis.
Outsourcing various components of your business’s
processes will assist the company by shifting various
responsibilities to the outsourced vendors.
13. Since these outsourced vendors are specialists in what
they do, they’ll plan all your risk-reducing factors much
better.
Regardless of these pros of outsourcing that you should
consider before approaching an outsourcing vendor, it’s
always wise to accurately define the importance of the
tasks you are looking to outsource.
The main factors that have led to the growth of this
trending tendency of outsourcing includes;
1. The Likelihood and ability to concentrate on other
essential business processes.
2. Lack of skilled labor in specific areas of the business
processes.
3. Availability of discounted labor, all while not
compromising the quality of output.
14. All these factors have specifically resulted in most
outsourced partners across the world today. That being
said, below are numerous tasks you should aim to
outsource as you grow your business;
COMMON OUTSOURCED AREAS IN BPO
1. Outsource Customer Service and Lead
Generation.(ex. Holcim Philippines)
Sales calls are normally a matter of number, meaning that
more calls equal to more leads and sales. The moment the
first outreach has been performed, closing the sales can be
controlled by the internal sales force. A brilliant
salesperson’s skills and expertise can be efficiently utilized
to handle clients and close sales, rather than just make
cold calls. It might also be more effective to outsource
customer support compared to maintaining a qualified
support staff to handle these tasks. This is especially true
for product based companies.
15. 2. Outsource Bookkeeping and Accounting.
Let’s start by understanding what bookkeeping is.
Bookkeeping can be regarded to as the act of keeping
records of all financial transactions in an organized manner.
Furthermore, Bookkeeping and Accounting are just like
your morning jog; no one really wants to take his/her time
out to do it but disregarding it may result in serious
complication after a specified period of time.
You always have an option to employ a dedicated individual
to take care of your day to day bookkeeping and accounting
activities though nowadays it’s become practical for
companies to outsource all their bookkeeping activities
There are lots of benefits brought about by outsourcing
your bookkeeping activities. You can save your employees
more time so they can focus more on your business. You’ll
also save some cash since account outsourcing is cheaper
compared to employing a full-time accountant and you’ll
have access to experts, who will ensure accuracy and so
much more.
16. 3. Outsource Social Media Marketing.
Social media platforms are no longer restricted to personal
communication. Nowadays, lots of companies are using
social media platforms such as LinkedIn, Twitter,
Facebook, Instagram, and Even Snapchat for lead
generation.
As a matter of fact, the famous messaging app, WhatsApp,
is also getting used by companies extensively. Advertising
on these social media platforms is not an easy task, and
this activity will need a considerable amount of time.
For instance, the company’s job does not end with posting
on the platform. The company has to engage in the
conversations and reply to all its users. As an entrepreneur,
you can easily outsource this task to one of the social
media marketing agencies. They’ll have a team of well-
skilled professionals set aside, and their work is to grow
and monitor your followers.
17. 4. Outsource Tax Filing and Tax Preparation
Tax returns preparations are pretty time consuming and
needs a specific set of skills. You can easily find tax
consultants who can lift this tax filing burden for you.
In case you are making use of any reliable online accounting
software, you can simply grant them temporary access, and
they’ll be able to generate the return.
Tax filing and preparation services costs are pretty much
standardized nowadays so you could easily outsource
Service Tax, Value Added Tax, and TDS return preparation.
18. 5. Outsource Payroll Processing.
In case you own a small team, you won’t
experience any difficulties managing payroll in-
house. But then again, once your company starts
growing past 15 employees, handling monthly
payrolls can eat up lots of your time, meaning that
keeping track of worker’s applicable tax returns,
bonuses advances, loan advances, joining and exit
formalities, and employee leaves may soon turn
and become a nightmare for you.
In case chosen appropriately, Payroll outsourcing
will be less costly, and a more straightforward
mean of filing your taxes on time and paying your
employees.
19. 6. Outsourcing Your Creative Work.
Most entrepreneurs think that they can perform
their own design tasks. Well, it’s true they can,
but very few of them can do it well, and that’s
why you are advised to leave this to the experts.
You can achieve more quality results if you opt to
outsource your artwork creations. This includes
designing of advertising banners, letterhead,
business cards, logos, website image, and so much
more.
20. 7. Outsource Event Management.
Are you preparing to accommodate a workshop of
workers? Or a team day out? Or perhaps a get-together
festivity for vendors? It’s better if you outsource the
entire event organization activity to an even organizing
agency.
Right from preparations to the execution, event
management can consume a lot of time. If not
outsourced, you’ll be forced to include your workers,
and this might negatively impact your firm’s
productivity.
A trustworthy event management firm can take away
this whole burden as they have a good connection with
food caterers, sound providers, technicians, and other
vendors.
So the next time you’ll be thinking of hosting an event,
you are advised to outsource it and save yourself some
valuable time.
