Business Process Outsourcing (BPO)

Business process outsourcing (BPO) is a subset of outsourcing that involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain. 

BPO is typically categorized into back office outsourcing, which includes internal business functions such as human resources or finance and accounting, and front office outsourcing, which includes customer-related services such as contact centre services.

HOW IT STARTED?

The offshore call centre industry started in the Philippines in 1999 when Cyber City set up an outsourcing facility at the former USAF base in Clark and has been followed by many more.  The agents at these call centres handle inbound or outbound traffic via the telephone and other available channels.  Today, the Philippines is an important offshore player driven by several factors such as the following: increasing government support on IT investment, large pool of graduates with English communication skills and knowledge in ICT far superior to India which has led many companies to close down Indian operations and move them to The Philippines, reliable and reasonably priced telecommunication infrastructure, low cost high quality locations, growing buyer trends on outsourcing.  The industry in which the call centre industry operates is global, therefore highly fragmented and extremely competitive.  As a result of intense competition, outsourced call centre services and solutions frequently are subject to pricing pressure. 

BPO has been one of the fastest growing sectors in the Philippines in the past 7 years. With the Philippines being the 39th largest economy in the world, the country continues to be a promising prospect for the BPO Industry. Just in August 2014, the Philippines hit an all-time high for employment in the BPO industry. From 101,000 workers in 2004, the labor force in the industry has grown to over 930,000 in just the first quarter of 2014. Growth in the BPO industry continues to show significant improvements with an average annual expansion rate of 20%. Figures have shown that from $1.3 Billion in 2004, export revenues from BPO has increased to over $13.1 Billion in 2013. The IT and Business Process Association of the Philippines (IBPAP) also projects that the sector will have an expected total revenue of $25 Billion in 2016. This growth in the industry is further promoted by the Philippine government. BPO is highlighted by the Philippines Development Plan as among the 10 high potential and priority development areas. To further entice investors, government programs include different incentives such as tax holidays, tax exemptions, and simplified export and import procedures. Additionally, training is also available for BPO applicants.

The 8 people who hepled to build the Philippine BPO Industry

• President Fidel V. Ramos

He liberalized the telecommunications industry to allow them to modernize their technology to be globally competitive and to be able to serve the demands of the BPO industry.

• Myrna Padilla

She was a domestic helper in Hong Kong when she started learning about computers. It wasn’t long before she packed her bags and went home to Davao City to establish Mynd Consulting, a consulting firm that develops mobile and web apps for clients in Europe, North America, and Australia. Padilla’s is one of the fairy tale stories in the IT-BPO industry – not only did she change her life but she also changed the way IT-BPO companies are set up in the country.

• Jim Franke and Derek Holley

Franke and Holley established eTelecare in 1999, which has, over the last 15 years, become one of the largest Filipino owned BPO companies in the country. It is known as the first Filipino call center.

• Mar Roxas

Mar Roxas lobbied in the congress the revision of Republic Act 7916 or the Philippine Economic Zone Act, allowing buildings or floors in buildings to register as and enjoy the privileges of special economic zones. Under this act, ecozones are spared from paying national and local taxes, and instead pay only 5% of their gross income as tax. Ecozone locations are required to export 70% of their products (in the case of BPOs, services) and prefer utilization of local resources (such as Filipino labor). This revision on the Philippine Economic Zone Act encouraged BPOs to invest in the Philippines. As DTI secretary, he commissioned the distribution of 30,000 personal computers to 2,000 public high school nationwide in the Personal Computers for Public Schools program to introduce IT literacy among high school students, a skill that they can use should they wish to pursue a career on BPO.

• Andrew Tan

Inspired by the live-work-play concept of Silicon Valley, Megaworld Corporation, under Tan’s leadership, began to develop real estate projects that allowed people to live in self-sustaining towns. This appealed to the outsourcing companies abroad and encouraged them to invest in the country by putting up their offices here . Most of the country’s major IT-BPO hubs are developed by Tan, such as McKinley Hill and Eastwood City.

• Frank Holz

He created the first contact center in the Philippines. Under the Accenture group, Holz made history.

• Fil Cartoons

While Fil-Cartoons isn’t a person, it’s a company that brought a lesser known segment of the IT-BPO industry on the world map, animation. In 2007, the company produced “The Flintstones Christmas Carol,” which earned an Emmy nomination. With that, the company showed the world that Filipinos do not only speak English well, but also have exemplary skills in art and technology.

• IT-BPO Employees

IT-BPO employees has a big help in BPO industry. Because without them there will be no BPO. In this job, we Filipinos prove that we are trained to have a strong communication with others and english skills. With the rate of employment in this sector predicted to rise even higher in the next few years, there’s no limit to the inspiration success stories.

HOW TO START A SUCCESSFUL BPO COMPANY IN THE PHILIPPINES:

One of the most high demand business ventures in the country today is that of Business Process Outsourcing or BPO. It commonly referred to as a call center, but in general it pertains to a third party service provider that links companies and their clients together, most of which are based abroad. Hence, setting up a BPO company is a good way not only to provide jobs to Filipinos, but also to earn profit as an entrepreneur. Sure, it can be overwhelming to establish one up, considering that there are many BPO giants that are already dominating the scene, but it actually boils down to providing service that matters. Once you’ve accomplished the things needed to start this kind of business, then you’re all set to operate.

Requirements:

• Legal documentation
• Infrastructure and technical requirements
• Human Resources
• Training
• Client leadership
• Company Stability Plan

The applicant should also have a good communication skills and and know how to speak english frequently.