The BPO/Call Center

Industry
TLE 10
ICT
VOCABULARY
• Customers refer to the
people who are current or
potential buyers,
subscribers, account
owners or patrons of the
industry who enters into
transaction with you
through information
technology (IT) assisted
devices like computers,
telephones and mobile
phones.
VOCABULARY
• Clients refer to companies you will represent.
VOCABULARY
• Agents or representatives otherwise known as
rep/s are job titles of personnel who assist
customers in activities
VOCABULARY
• Outsourcing is a
system whereby an
organization can
subcontract certain
areas of work to a
third party
organization that
specializes on the
task to be done.
What is BPO?
Business Process Outsourcing
(BPO)
• refers to the management of one or more specific
business processes or functions by a third party. It
involves contracting of the operations and
responsibilities of a specific business function.
Examples of these business processes or functions
are human resources, procurement, finance,
accounting asset, and property management. Here,
you hire a separate company or firm to handle
business activities for your company.
Business Process Outsourcing
(BPO)
• BPO is “the delegation of one or more IT-intensive
business processes to an external provider that, in
turn, owns, administrates and manages the
selected process based on a defined and
measurable performance metrics.”
- Gartner Dataquest
Business Process Outsourcing
(BPO)
• BPO is also a long- term contracting of non-core processes
to an outside provider.
• This is basically performed by white collar and clerical
employees to achieve various benefits such as cost savings,
and better quality and ability to focus on core competence.
• BPO involves outsourcing processes that are not core to a
company but are somewhat essential for smooth operation
of the company. The customer transfers the complete
responsibility of these functions to another company which
guarantees certain service quality standards. Such
processes include customer service, payroll processing,
inventory management, and the like.
Business Process Outsourcing
(BPO)
• In the Philippines, the term BPO is frequently associated
with Call Center or Telemarketing firm. BPO, however, is
not entirely synonymous to “Call Centers”.
• A call center is a type of BPO service that specializes in managing inbound or
outbound customer communications, such as phone calls, emails, and chat
support. Call centers provide a range of services, such as customer service,
technical support, sales, and telemarketing.
• BPO is a broader concept that involves outsourcing specific business
processes or functions to a third-party service provider. BPO services can
include a wide range of back-office operations, such as accounting, HR,
payroll, data entry, IT support, and more. BPO services can be categorized into
two types: horizontal and vertical. Horizontal BPO services, such as call
centers, provide a single function across various industries. Vertical BPO
services provide specific functions in a single industry, such as medical billing
and coding.
Why Outsource?
 Have you ever wondered why the BPO industry flourished? It
actually benefits both the business organization and the manpower
or labor force. It is a win-win solution.
These are just some of the perceived benefits of outsourcing:
• Reduced or controlled operating costs
• Reduced labor cost
• Higher level of service for the same or even lower cost
service
• Allows you to focus on your core business
• Gives you access to world-class expertise and those not
available internally
• Provides enhanced efficiency and productivity
• Predictability of costs
• Utilization of common applications; freeing up of some
financial and human capital
Profile of the BPO
Industry (Global and
Local)
 IT-BPO industry in the Philippines was projected to
increase from US$500 billion in 2009 to US$1.5 trillion in 2024
(Tholons, 2011). According to the Everest Analysis (World Bank
and IMF projections), the country’s 2016 roadmap might lead to
9% increase in GDP, wherein 2016 revenues of the Philippine’s
IT- BPO Industry may vary from US$15 billion to US$ 25 billion,
depending on the strength of industry effort and government
support. Its projected direct employment will be 680,000 to 1.3
million and indirect employment of 1.7 million to 3.2 million.
 In the Philippine
setting, call centers
are widely known and
accepted as one of
the leading job
providers in the
country. This is
because the
government has
opened its doors to
foreign investors that
require cost efficient
technical services.
 The BPO industry started
here in the Philippines in 1992
with Accenture, then followed
by Sykes Enterprises, Inc. in
1997. The offshore call center
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 other firms, such
as eTelecare, People Support,
ePLDT/ Ventus, Convergys
Corporation, TeleTech Holdings,
Inc., Cyber City Teleservices,
Sitel/ Client Logic, etc.
 The agents at these call centers handle inbound
or outbound traffic via telephone and other available
channels. Today, the Philippines is an important
offshore player driven by several factors such as the
following:
1. increasing government support on IT investment
2. large pool of graduates with English communication
skills and knowledge in ICT which is far superior to
India and has led many companies to close down
Indian operations and move them to the Philippines
3. reliable and reasonably-priced telecommunication
infrastructure
4. low-cost high quality locations, growing buyer
trends on outsourcing
 The Philippines is
considered the most
attractive global provider of
IT-BPO services in Asia
(Economist Survey: M. Alan in
MBOL May 29, 2012).
IT-BPO revenues for the
Philippines reached US$11
billion and 640,000B direct
employees in 2011. It is the
key driver of economy, and
the fastest growing source of
employment and revenue
(DTI, 2012).
TYPES OF INDUSTRIES
 Call centers, just like other types of
businesses, offer a variety of products and
services. The development in the business
world pushes the industry to be more
flexible, thereby making the possibilities
endless.
Call centers are also classified based
on job-tasks and the location in which the
service is offered.
Frequently, BPO is referred to as
Information Technology-Enabled Services
(ITES). This is because most business
processes include some form of automation
and information technology devices such as
computers that "enable" these services to
be performed. This encompasses careers in
software development, data entry,
programming, and web development
services.
 BPO is distinct from Information Technology (IT)
outsourcing, which focuses on hiring a third-party
company or service provider to do IT-related activities,
such as application management and application
development, data center operations, or testing and
quality assurance. The Philippines is currently among the
most cost competitive destinations for IT-BPO services.
An offshoot of BPO is Knowledge Process
Outsourcing (KPO). Considered by some to be a subset of
BPO, KPO includes those activities that require greater
skill, knowledge, education, and expertise to handle. This
may include services in financial analysis and legal
services.
Types of BPO Industries
Types of BPO Industries
BPO is often divided into two main categories:
1. Back Office Outsourcing- This includes internal
business functions such as billing, purchasing,
payroll of employees, and other similar tasks.
2. Front Office Outsourcing – This includes
customer-related services such as marketing or
technical support.
Types of BPO Industries
Based on the location of hiring and contracting, BPO may be
categorized as:
1. Offshore Outsourcing – is outsourcing contracted outside
a company's home country. This is done when high-
volume, low-complexity tasks are processed in a country
with a significantly lower cost base than where the
service has become more sophisticated. For example, the
UK: traditionally India, but more recently China, the
Philippines, Malaysia and some South American countries.
(e.g., Numerous UK-based BPO companies such as Vertex
and Capita Group are now providing offshored services to
their clients through their operations in the Philippines.)
Types of BPO Industries
Based on the location of hiring and contracting, BPO may be
categorized as:
2. Nearshore Outsourcing - BPO that is contracted to a
company's neighboring country. The cost base of these
countries is still lower, but geographical proximity and cultural
similarities can create an easier working relationship. A good
relationship, cultural similarities and absence of
communication gap can result in a more complex work being
transferred easily. For Western Europe, this is to Eastern
Europe. For the United States this is to Canada and Mexico.
(e.g., Tony Lee, an information management supplier based in the
US near-shored the development of its computerized purchasing
system to Advance Programs, a commercial systems solution
provider in Canada.)
Types of BPO Industries
Based on the location of hiring and contracting, BPO may be
categorized as:
3. Onshore - is an entirely different scheme. It is the practice of
obtaining business-critical, high-level services from someone
not employed by the company, but within the same country.
Onshore services are unique for each company.
(e.g., When Burger King Corporation, a US-based chain of
restaurants, lost its laboratories in the havoc created by
Hurricane Andrew in1992, the company was forced to outsource
its quality assurance functions to other companies in the US.
Burger King still outsources its quality assurance functions
onshore even after rebuilding its laboratories because it allows
the company to make productive use of its internal resources.)