A Complete Guide to Business Process Outsourcing in the Philippines

Are you happy with your front and back office’s daily productivity? Or do you wish they were faster and more cost-effective?

Expanding your workforce and deploying advanced solutions are a good start if you want to continuously grow your business—whether it be an e-commerce store or a technology startup. 

But is spending resources on non-revenue-generating functions worth it? 

Have you considered adopting business process outsourcing (BPO)? If yes, do you want to hire an offshoring provider from the Philippines?

Read on to learn how to find the best Filipino service provider to meet your operational and financial needs.

Understanding the Philippine BPO Industry

As a trusted outsourcing destination, the Philippines holds 10% to 15% of the global BPO market share. Its English-proficient professionals, modernized solutions, and affordable, high-quality services help the country retain its position.

Hence, businesses of all sizes turn to the industry to increase efficiency and double cost savings. They hire Filipino service providers to handle the non-core processes listed below.

• Customer service means assisting consumers facing issues with their purchases. It involves answering basic questions about company products and services. Customer service representatives (CSRs) perform this process through calls, live chat, email, social media, text messaging, and video chat.

• IT support involves managing, maintaining, and repairing hardware, software, and network systems. It includes technical support, help desks, desktop support, software development, and security monitoring.

• E-commerce support is helping online shoppers with their pre-purchase inquiries, order issues, returns, and exchanges. 

• Sales and marketing are activities for selling and advertising products and services. These functions increase a company’s bottom line and customer base. Lead generation, telemarketing, and social media management are some examples of sales and marketing tasks you can outsource.

• Data entry involves using computers and word-processing applications to input, organize, and access enterprise information. Data entry services cover data mining, cleansing, and analysis.

• Financial services include bookkeeping, financial analysis and reporting, payroll processing, and tax preparation. Businesses often hire third parties to streamline these repetitive tasks.

• Human resources (HR) support helps improve a company’s existing HR processes. It helps organizations quickly recruit and hire skilled talent to fill their vacancies.

• Healthcare support pertains to delegating non-clinical work to service providers. Such tedious tasks usually include medical billing and coding, claims processing, and medical transcription.

• Creative services include graphic design, animation, content creation, and video editing. These activities help companies promote their products and services and broaden their market reach.

• Manufacturing means processing raw materials to produce finished goods using human labor, machinery, and chemical processing. Large manufacturers typically relocate production overseas to take advantage of low labor costs.

• Inventory management refers to monitoring inventory from manufacturers to warehouses and sellers. Third-party service providers help companies ensure their products are in the right place and at the right time.

• Cloud services provide easy access and support to businesses through the Internet. These services eliminate the need for physical infrastructure or hardware.

• Telecommunication support delivers quick responses to issues and concerns from network users. Telecom support agents use the same method as standard customer service and technical support agents. They just focus on addressing problems related to internet connectivity and other wireless networks.

Kicking off Your BPO Experience in the Philippines 

Small, mid-sized, and large companies turn to the business process outsourcing sector in the Philippines due to the many cost-efficient services Filipino contractors offer. As a result, the industry contributed $29.5 billion in revenue to the local economy in 2021.

But remember that the region has distinct economic, labor, and security rules from your home country. So you must carefully develop an action plan before diving into the vast pool of Philippine service vendors. 

Here are best practices for finding the right Philippine BPO company to fill your front- and back-office needs: 

Specify Enterprise Challenges and Outsourcing Goals

Identifying your challenges and outsourcing goals is vital when seeking providers in another country. Filipino vendors deliver various non-core support services at differing costs. So you must specify which areas require improvements and adopt BPO offerings that match your budget.

Start by listing the challenges impeding you from cutting costs and your in-house team from being productive. Use the SWOT guide to evaluate your business’s strengths, weaknesses, opportunities, and threats. This way, you can set measurable goals and ensure returns. 

Consider these recommended questions when assessing your SWOT:

• In what areas does our team excel?
• What resources does our team still have?
• What competencies does our team possess?
• What areas hinder us from expanding?
• Which resources and skills are we lacking?
• What are the major causes of complaints regarding our products and services?
• How can we maximize our business strengths to grab more opportunities?
• How will Filipino contractors help improve our daily operations?
• How will offshore outsourcing contribute to our expansion?
• What risks can we expect when outsourcing to the country?
• What challenges should we anticipate when working with a Filipino service provider?
• What national and industrial policies might affect our company?

Upon clarifying your SWOT, list your actionable BPO goals. This helps track your potential provider’s work performance and output. Use the SMART model when laying out your business process outsourcing targets in the Philippines.

• Specific: Create focused objectives to encourage your team to attain them.
• Measurable: List straightforward targets and provide metrics to track your accomplishments.
• Achievable: Specify practical and easily achievable goals.
• Relevant: Ensure hiring a contractor helps meet your business expansion needs.
• Time-bound: Set deadlines for your desired BPO outcome to establish urgency.

Suppose your technical support team requires extra hands due to the upcoming holiday season. If you do not hire more agents, your employees will suffer from overwork and overtime.

Outsourcing technical support is a cost-effective way to prevent such problems from happening. You can contact a business process outsourcing provider from the Philippines to temporarily expand your technical support operations by 20% and achieve 15% cost savings during the holiday.

Such a situation is a SMART goal because:

• You set a specific objective: hire a contractor to enhance technical support;
• You identify a measurable target: increase operations by 20% and save on costs by 15%;
• You can achieve the goal: the vendor supplies skilled agents to perform urgent tasks;
• Your aim is relevant: outsourcing helps avoid employee overwork and overtime;
• Your objective is time-bound: ensure streamlined operations during the holiday season.

Know the Pros and Cons of BPO

Note that advantages and disadvantages go together in any business investment. Mitigate the negative effects of business process outsourcing in the Philippines by learning more about its pros and cons. 

Here are the benefits of the country’s outsourcing services:

• Decrease costs. Offshore outsourcing lets you save money. You do not need to compensate new hires, purchase technologies, and pay for utilities to accommodate your non-core functions. A Filipino service provider offers these resources in a fixed-price or subscription-based package.
• Optimize skilled and English-proficient workforce. The Philippine BPO industry employs and nurtures highly trained and English-proficient professionals. Their resourcefulness, optimism, and professionalism help them complete work effectively and quickly.
• Ensure cultural and operational compatibility. Filipino workers have a high affinity with the West and night shift culture. If you outsource your customer service to a Philippine contact center provider, its agents can naturally communicate with your native English-speaking customers during business hours.
• Access robust technologies. The country’s BPO market does not lag regarding advanced solutions. Local providers use artificial intelligence (AI), robotic process automation (RPA), and cloud services to help improve your customer experience, boost productivity, and accelerate growth.
• Enhance competency. Hiring a business process outsourcing provider from the Philippines to handle your tedious tasks lets you prioritize your strengths. It enables you to focus on your core expertise to produce high-quality products.
• Speed up work. Filipino contractors undergo rigorous BPO training to rapidly complete repetitive, time-consuming tasks. These professionals work only on your agreed services, so they can easily accomplish assignments on schedule. This way, you can work on shortening your offerings’ time-to-market.
• Ease workload. Employing a front- or back-office outsourcing company from the country helps ease workloads and reduce backlogs. Your BPO provider handles your labor-intensive, non-core tasks. Hence, you have sufficient time to deal with your critical business projects.
• Provide 24/7 support. BPO providers use AI and automation technologies to deliver round-the-clock support to your customers. As mentioned, these contractors adapt to your business’ time zone and work on alternating shifts. You no longer need to worry about abandoned consumer questions and non-core duties.
• Increase scalability. Filipino contractors accommodate your changing needs, consumer demands, and industry trends to help scale your operations. Moreover, they constantly modify their work techniques to align with your business strategies.
• Receive substantial government assistance. The Philippine government recognizes BPO’s contribution to the national economy. It implements strict policies and procedures to protect sensitive data and ensure privacy. Local laws also provide tax benefits and related advantages for both parties.

In contrast, the disadvantages of outsourcing to the Philippines are as follows:

• Lose service quality control. You cannot constantly monitor your provider’s work; you must prioritize your core capabilities and initiatives. If you pick an unreliable business process outsourcing partner from the Philippines, expect lower-quality products and services.
• Fail to spot hidden charges. Filipino BPO companies offer services at affordable, fixed costs. However, you might overlook hidden costs resulting from currency conversions and value fluctuations. So you might be paying more without your knowledge. 
• Experience security risks. Data from IBM shows that 45% of breaches happen in the cloud. Because BPO transactions take place online, confidential data is vulnerable to cyberattacks. Even though Filipino service providers execute strict security measures, you cannot stop data breaches unless you closely cooperate with your provider.
• Work in different time zones. Although Philippine service providers adapt to your business hours, time zone differences impede constant and stable communications. This factor also results in misunderstandings and conflicts. 

Develop a BPO Plan

You need a well-structured plan when acquiring business process outsourcing services from the Philippines. It will guide you in selecting your potential BPO partner in the country. It also serves as your map toward achieving long-term benefits and avoiding drawbacks.

Contrary to popular belief, it does not matter if your business plan is only two pages long. You are good to go if you have carefully enumerated your challenges, goals, and methods to address them. 

You must thoroughly research potential Filipino service providers to add key insights to your plan. Make sure your BPO plan includes the elements below.

Developing a BPO plan does not stop here, though. As your business needs and customer demands change, you must continue reviewing and updating the plan until you find the right Filipino service provider. This helps you keep pace with the market competition.

List Ideal Contractor Qualifications

Whether you outsource tech solutions and other non-core functions, enumerate qualifications for your ideal business process outsourcing provider from the Philippines. As you develop your BPO plan, study your prospects’ work strategies, service offerings, fees, workforce skills, and technologies.

Get insights from online directories, industry associations, or referrals from colleagues and previous clients. Furthermore, utilize online marketplaces, job search websites, or BPO platforms that can help you further examine service providers in the country.

Based on your data, create criteria for your desired Filipino contractor. Note the following qualities when developing your criteria:

• Good industry reputation. Validate the provider’s excellent standing and background by studying its industry track record, client history, and market credibility. Confirm its ability to deliver high-quality outcomes.

• Skilled workforce. Even though Filipino professionals are highly trained and fluent in English, you must still evaluate the talent pool of your selected BPO company. Assess its workforce’s ability to provide outstanding support services.

• Advanced technology and infrastructure. Confirm whether the vendor uses up-to-date technologies such as AI, RPA, and cloud computing. Your outsourcing project needs these tools to achieve your desired output speed and quality service delivery.

• Cost-effective services. Verify whether your ideal business process outsourcing partner in the Philippines offers superior services at affordable costs. Do not hesitate to pay a premium if the vendor guarantees long-term benefits; however, remain cautious of hidden fees.

• Cultural and lingual compatibility. As discussed, the nation houses a skilled workforce proficient in English and exposed to global culture. Choose the provider that best matches your language needs and corporate culture to ensure a harmonious work relationship.

• Scalable and flexible. Inspect the service provider’s capacity to meet organizational changes or adjust to the latest market trends. Check whether it can maintain or surpass its exemplary performance, especially during hectic seasons.

• Transparent. Select the vendor capable of sharing all data relevant to your service agreement. A transparent BPO partner emphasizes trust and honesty to gain joint business success.

• Secure and compliant. Pick the provider that strictly meets national and international security and compliance standards. Weigh its practical solutions for threat mitigation, risk management, and data privacy protection to match yours.

Execute a Proposal Request Campaign

Launch a proposal call once you complete the criteria for your desired Filipino provider. Carefully plan and draft your bid request notice to convey your service conditions. Draft a request for proposal (RFP) by combining and using all the data you collected from your initial market research. 

Execute this step-by-step guide to get the best offers from business process outsourcing providers in the Philippines.

1. List BPO service prerequisites. These requirements include work scope, budget, workforce size, and timeline. This action helps ensure the submitted proposals satisfy your specific needs.
2. Develop a bid request notice. Outline your project requirements, provider qualifications, and deliverables. Make sure the document is precise and easily understandable. You can make a creative digital poster or a simple web page for this.
3. Publish the proposal call notice. Post the notice via your official websites and social media accounts. Set a clear deadline for bid submissions and enumerate any additional requirements you want from vendors.
4. Evaluate and screen collected offers. Once proposals from interested service providers reach your desks, assess them based on the qualifications and prerequisites you have created. Call for more referrals, schedule one-on-one interviews or seek additional vendor information to support your decision-making.
5. Select a service provider. Upon reaching and completing the fourth step, decide and choose the best BPO contractor from the country.

Conduct a Cost Analysis

Perform a cost analysis to know whether business process outsourcing to the Philippines can satisfy your operational and financial needs. 

Analyze possible BPO expenses by performing these practical steps. They help ensure cost savings and investment returns for technical support outsourcing, back-office offshoring, and related services.

• Study BPO fees and expenses. Learn about the charges and costs of hiring a service provider from the country. These expenses cover fees for infrastructure, labor, regulatory compliance, and travel (only if deemed necessary). You can get such data from your market research or proposal request campaign.
• Compare Philippine and onshore outsourcing expenses. Write down all offshore outsourcing costs for your service requirements. Differentiate them from the onshore outsourcing expenses for the same prerequisites. 
• Compute potential cost savings. After gathering all the necessary figures, compute the difference between offshore and onshore BPO costs. This way, you gain an overview of possible cost reductions from outsourcing to the region.

Proceed to the next section after identifying how much money you can save by hiring a Filipino service vendor.

Finalize the Formal Contract

After ensuring you meet all the goals and requirements stated in your BPO plan, sign an official service-level agreement (SLA) with your selected Philippine-based provider. 

This step needs sharp attention to detail and open communication with the provider. It helps confirm whether the contractor can address your growing non-core backlogs and operational needs. 

Carry out the following practices when finalizing an SLA for acquiring a contact center as a service (CCaaS) or customer support solution. This way, you can avoid future conflicts, misunderstandings, and high violation costs.

• Review SLA terms before signing. Ensure the accuracy of contract terms and conditions. Make sure it reflects all your expected outcomes and project requirements. Seek advice from legal counsel to guarantee fairness and legality.
• Identify points for negotiation. Such aspects might include service charges, payment terms, project achievements, intellectual property rights, and confidentiality rules. Prepare to clarify your concerns and opinions on these matters.
• Directly connect with the service provider. Specify both parties’ objectives, prerequisites, and expectations. Exchange insights and suggestions with your business process outsourcing partner in the Philippines. Never forget to address any issues arising during the finalization stage.
• Verify regulatory compliance. Validate whether the SLA follows all crucial BPO laws in the region and your home country. This step helps avoid sanctions and violation fees. 
• Sign the SLA. End the transaction by officially signing the contract. Put a date and a seal to certify all signatures. Ensure each party receives a copy of the SLA.

Managing Your Chosen Filipino Service Provider

Now that you have completed the rigorous process of selecting and hiring a service provider from the Philippines, you must continue to enhance your engagement with your new partner. 

This way, you can fully benefit from your agreed-upon service terms. Follow these steps when overseeing your hired Filipino service provider.

1. Appoint a contact person. Make sure each party has a point person to monitor your progress. Managers coordinate daily interactions between your in-house and third-party teams. They keep tasks on track and organize necessary paperwork.
2. Establish regular communication and collaboration strategies. Verify which communication channels and platforms allow you to quickly and effectively reach your provider, especially during emergencies. Know what collaboration apps to use to streamline task monitoring and assignments.
3. Support BPO worker training. Create a comprehensive handbook to assist your partner’s personnel training. This document should contain all essential data to familiarize them with your business offerings and policies. It helps ensure the third-party team follows your standards and procedures.
4. Schedule weekly or monthly meetings with your BPO provider. These virtual or in-person gatherings help determine your partner’s strengths and weaknesses in accomplishing their roles and responsibilities. In addition, they inform both parties about areas requiring immediate solutions and improvements.
5. Trust your provider’s work strategy and execution. A reliable service provider lets you prioritize your core competencies and initiatives. You do not have to monitor the vendor occasionally because of its well-trained staff and advanced infrastructure.
6. Track your BPO partner’s work performance. This step ensures your BPO partner adheres to the SLA terms and conditions. Evaluate its progress and output using your key performance indicators (KPIs). Include insights from the in-house team and customers to easily detect critical issues and needed improvements.
7. Provide incentives. Recent statistics show worker incentive programs can boost productivity by approximately 44%. Thus, offer incentives to motivate your provider to maintain excellent performance. Note the long-term benefits of working with a reliable BPO partner; they outweigh the relatively small expense of rewarding their hard work.

The Bottom Line

Acquiring business process outsourcing services from the Philippines can be beneficial and disadvantageous. You need to know how to find the best Filipino service provider to ensure you receive more positive outcomes than negative ones. 

Ready to grab your BPO opportunity in the Philippines? Connect with Unity Communications today. Let us help you increase your bottom line with our robust technology and highly efficient workforce in the country.