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Business process outsourcing (BPO) helps your company get ahead of the competition without overspending. The business strategy lets you prioritize core competencies while still accomplishing all your paperwork. It also allows you to deliver a top-notch customer experience without training new hires.
But did you know the Philippines has some of the best outsourcing solutions?
If yes, do you know how to outsource to the Philippines?
No? Slightly? Absolutely?
No matter how experienced you are in this aspect, here is your ultimate guide for seeking an offshoring provider in the Philippines.
13 Steps to Jumpstart Your Business with Philippine BPO
Leaping into business process outsourcing in the Philippines demands a well-structured approach. From listing your needs to signing an agreement, each stage of outsourcing requires meticulous planning.
You can confidently navigate the country’s dynamic BPO landscape by giving every phase due consideration. Executing the steps below helps you lay a solid foundation for long-term success amid the rapidly evolving business landscape.
1. Identify Outsourcing Needs
You must identify your outsourcing needs before closing a deal with a Filipino service provider. This action helps you make informed decisions when selecting the right BPO partner. It further guides you in aligning your resources and goals with the provider.
List your business necessities comprehensively to learn how to outsource to the Philippines. Doing so allows you to achieve continued growth and boost your competitiveness with your potential vendor.
Here are some examples of situations that demand third-party support.
- In-house employees encounter project delays. Backlogs prevent your team from beating deadlines. Insufficient workers during the holiday rush slow down the delivery of your products and services.
- Back-office operations cost more than core initiatives. Although your back office indirectly contributes to revenue generation, it needs considerable funds to operate smoothly. It might overshadow the necessary resources for your primary offerings.
- Staff experience burnout due to incompatible skills and tasks. Assigning primary and secondary functions to the same team leads to overwork and poor performance. Backlog-caused overtime discourages your employees from undergoing training.
- Outdated hardware and software solutions interrupt daily operations. System lags and bugs slow your work progress because you need more money to update your equipment.
- Customers leave negative feedback. Due to those earlier scenarios, your in-house team cannot meet consumer demands quickly and effectively. This gap frustrates your buyers, urging them to leave negative comments and low ratings.
2. Clarify BPO Goals
Specifying goals is the next step on your “how to outsource to the Philippines” checklist. Prioritize this stage because it ensures strategic alignment between your outsourcing and overall business strategies.
Clear objectives establish a benchmark for measuring the progress and success of your Philippine BPO investment. Defining your SMART targets guides you in tracking your potential provider’s key performance indicators (KPIs). The gathered insights help you make data-driven decisions, pinpoint areas for improvement, and optimize the BPO arrangement over time.
Build a shared vision with your future vendor by setting goals using the SMART guide below:
- Specific: Avoid defining vague or broad objectives for your outsourcing plan. They might cause you to lose your sense of direction and motivation.
- Measurable: Create quantifiable goals to monitor your vendor’s performance and output. Careful monitoring lets you identify urgent resolution issues and gauge the partnership’s effectiveness.
- Achievable: Set realistic targets when collaborating with a support team from the Philippines. Highlight overlooked opportunities and plan your practical efforts well.
- Relevant: Match your BPO objectives with your operational needs and strategies. Ensure they directly contribute to your organization’s growth.
- Time-bound: Develop a structured timeline with specific deadlines to create urgency for reaching your targets. Setting time constraints helps the team maintain focus and prioritize actions.
Suppose your in-house consumer-facing team cannot quickly respond to buyers’ concerns during the holiday season. Hence, your business receives one- to two-star ratings due to unsatisfactory customer service, affecting its good market reputation.
Because the main issue involves consumer support, customer service outsourcing in the Philippines is your best bet. So you seek a Filipino service provider to increase your response rate by 90% and bump your feedback ratings to five stars.
You established a SMART goal in this scenario because:
- You specify wanting to hire a Philippine BPO provider for fast customer support.
- You measure your target to attain a 90% response rate and five-star ratings.
- You know the goal is achievable because Filipino workers are skilled and adaptable.
- Your objective is relevant to maintaining your good market reputation.
- You aim to reach the target during the holiday season.
3. Determine Which Functions to Outsource
Once you assess your needs and list your goals, you must identify which functions to outsource to the Philippines. Which front- or back-office tasks consume more time, effort, and resources? Which of them affects your core competencies and daily operations?
Those tedious processes you are considering can be great candidates for outsourcing. So remember to identify the following functions when exploring how to outsource to the Philippines:
- Customer service involves assisting consumers who encounter problems with their purchases. Support agents use various communication channels, such as calls, live chat, email, social media, and text messaging, to address customer inquiries.
- Information technology (IT) support encompasses managing, maintaining, and repairing hardware, software, and network systems. This service includes technical support, software development, and security monitoring to ensure smooth IT operations.
- E-commerce support entails assisting online shoppers with their pre- and post-purchase inquiries. Agents aim to deliver a seamless shopping experience and achieve customer satisfaction.
- Sales and marketing support focuses on selling and promoting products and services. Service providers help increase the client’s revenue and expand its customer base. Outsourced sales and marketing tasks include lead generation, telemarketing, and social media management.
- Data entry involves inputting and sorting enterprise information into computers and word-processing applications. Service vendors help businesses ensure accurate and organized data records.
- Financial services include bookkeeping, payroll processing, and financial reporting and analysis. Outsourcing these repetitive tasks streamlines financial operations and ensures compliance with accounting rules and regulations.
- Human resources (HR) support helps fast-track HR processes. As you research how to outsource to the Philippines, you might find that HR support is an essential outsourced service as it includes recruitment, onboarding, and training assistance.
- Healthcare support involves delegating non-clinical tasks to Philippine-based service providers, such as medical billing, coding, and claims processing. Outsourcing these administrative tasks lets healthcare professionals focus on quality patient care.
- Creative services include content creation, graphic design, video editing, and animation. Filipino providers offer these services to help promote a brand, expand market reach, and captivate the target audience.
- Manufacturing involves transforming raw materials into finished goods. Many large manufacturers opt to outsource their production to the Philippines to maximize lower labor costs and optimize supply chains.
- Knowledge process outsourcing (KPO) means collaborating with a third-party team to conduct data-driven tasks. Filipino KPO vendors collect and analyze market insights for enhanced strategic planning and decision-making.
- Legal process outsourcing (LPO) involves contracting with providers to handle various legal tasks. Contract development, research, compliance review, and litigation assistance are some examples of this service.
4. Understand Outsourcing Benefits and Drawbacks
When studying how to outsource to the Philippines, understanding the benefits and drawbacks is crucial. The resulting insights allow you to weigh the positive impacts against the adverse effects of BPO on your business. Such data helps match your outsourcing and in-house goals.
Below are the pros and cons of outsourcing to the Philippines that you must note when planning your BPO investment.
Advantages of Outsourcing
- Outsourcing non-core functions to the country allows you to save money. This practice eliminates the need to hire new employees, buy new technologies, or pay utility fees. Filipino providers offer services in fixed-price or subscription-based packages.
- The Philippine BPO industry houses highly trained and skilled professionals proficient in English. Their adaptability, optimism, and professionalism enable them to provide quick and effective support services.
- Filipino workers have a strong affinity with the West and adapt to the night shift culture. Hence, expect smooth and natural interactions between agents and customers when employing a Philippine-based contact center provider.
- The Philippine BPO market keeps pace with robust and modern solutions. The solutions include artificial intelligence (AI), robotic process automation (RPA), and cloud computing. Local vendors optimize these technologies to enhance their support services.
- Outsourcing tedious tasks to a third-party team helps boost your competency. The provider takes over your tedious tasks, letting you prioritize your core expertise and deliver high-quality products.
- BPO providers leverage AI and automation to deliver 24/7 customer support. Such technologies provide preset responses to basic inquiries. Thus, customers only need human intervention for complicated issues.
- Filipino BPO workers can accommodate changing consumer needs and adjust to sudden shifts in work strategies. They adapt to your business hours and operational techniques. The provider can also scale or trim your agent deployment accordingly.
- The Philippine government recognizes the BPO industry’s contribution to the economy. The sector generated $32.5 billion in revenue in 2022. Hence, the government implements policies and procedures to protect BPO providers and clients. Local laws and programs provide tax benefits, data protection, and related advantages for both parties.
Disadvantages of Outsourcing
- Working with a Filipino provider might weaken output quality control. Constantly monitoring your BPO partner’s work might be impossible as you prioritize your core projects. Choosing an unreliable BPO partner from the Philippines might result in lower-quality products and services.
- Online BPO transactions make confidential data vulnerable to cyberattacks. According to the FBI’s latest data, technical support fraud caused nearly 24,000 cyber incidents in 2021. While providers implement strict security measures, these incidents can still occur without close cooperation with the client.
- Although Philippine-based vendors adapt to your business hours, time zone differences still hinder seamless communication. This problem leads to misunderstandings and conflicts that delay work progress and increase backlogs.
- Signing a deal with a BPO company from the Philippines means encountering laws and regulations that differ from those in your home country. Not understanding the legal framework might result in high violation costs.
- Overdependence on your BPO partner adds to your limited quality control. If the provider faces any issues or fails to deliver as expected, it might directly affect your operations.
5. Research the Philippine Outsourcing Landscape
Always research the national BPO landscape on your journey to understand how to outsource to the Philippines. Collecting valuable insights into the country’s outsourcing industry helps you make informed decisions regarding your BPO plan.
Follow these tips to conduct your research effectively.
- Explore online platforms, industry-specific websites, and forums dedicated to Philippine BPO. These reputable sources contain comprehensive information about the industry’s market trends, service providers, and client experiences.
- Seek industry reports, white papers, and case studies covering the country’s outsourcing sector. These materials offer extensive analysis, statistics, and forecasts about the sector’s market size, growth potential, emerging trends, and key players.
- Consult industry professionals, colleagues, or business contacts with experience outsourcing to the Philippines. Ask for their insights, recommendations, and referrals about reliable service providers.
- Attend conferences, seminars, or trade shows focusing on the Philippine BPO industry. Such events offer opportunities to understand the sector better. They let you network with experts, vendors, and other businesses considering outsourcing.
- Look for various Filipino service providers. Examine their websites, review their portfolios, and evaluate their capabilities and client testimonials. Request proposals from your short-listed providers to know which matches your approach.
- Visit the Philippines if possible to get a firsthand experience of its BPO environment. This way, you can meet potential providers and tour their facilities. It helps you better understand how to outsource to the Philippines.
- Document your findings, weigh different options, and assess the prospective BPO candidate’s alignment with your business targets and requirements. Finding the right vendor to support your continued growth and success requires thorough research, but the effort is worth it.
6. Establish a Budget Plan and Timeline
The sixth step in learning how to outsource to the Philippines is establishing a budget and timeline. A well-defined budget plan helps avoid overspending, while a structured project timeline monitors progress throughout the BPO engagement.
When you have a clear budget plan and timeline, it becomes easier to negotiate pricing and work policies with your potential BPO partner. These strategies give you a solid foundation for gaining competitive pricing structures and timetables that align with your business limitations.
To maximize the advantages and minimize the disadvantages of Philippine BPO, create a budget plan by following these methods:
- Conduct cost analysis. As you research potential providers, assess the market rates and pricing models related to Philippine BPO. Consider labor, technology, real estate, and any additional expenses specific to your industry or project.
- Compare the outsourcing costs with the expenses you would incur by handling the tasks in-house. Consider in-house operations’ salaries, benefits, training, infrastructure, and overhead costs. This analysis helps you identify how much money you will save by outsourcing to the Philippines.
- Allocate budgetary resources for BPO based on your cost analysis. Know how much money you can invest in your outsourcing activities. Decide whether you will have a fixed budget or adjust your capital based on evolving needs.
- Be aware of potential hidden costs that might arise during the BPO engagement. These additional expenses include setup fees, maintenance costs, software licensing allowances, or unforeseen expenditures. Factoring in these potential costs is crucial to avoiding budgetary surprises later on.
- Create a financial framework to monitor and manage your BPO budget. Define the mechanisms to track expenses, invoices, and payments when outsourcing to the Philippines. Establish regular financial check-ins to compare the actual costs against the budgeted amounts.
- Consider Philippine BPO’s long-term financial implications. Check the strategy’s potential return on investment (ROI) and impact on your overall business development strategy. This informs your decisions regarding the BPO partnership’s sustainability and viability in the long run.
- Be flexible and adaptable to unforeseen circumstances or adjustments when working with your potential Filipino provider. Factors such as market dynamics, changing requirements, and project expansions might require adjustments in the budget. So set contingency plans and ensure a flexible budget.
- Continuously review and update your budget plan as the BPO project progresses. Regularly tracking costs with your provider guarantees that your budget plan aligns with your evolving needs.
Developing a project timeline is also important when studying how to outsource to the Philippines. Recent research shows that having such a plan strengthens your company’s long-term competence and increases profitability. Keep these factors in mind when developing a realistic BPO timetable:
- Scope of work. Identify the specific function you want to delegate to a Filipino service vendor. Setting the extent of the engagement determines the time required for each activity and the overall project duration.
- Task complexity. Confirm how complicated an outsourced task is. Some processes require little time, while others can be more intricate. Consider a BPO team’s capacity to quickly and efficiently complete the assignments.
- Knowledge transfer. Allot sufficient time for knowledge transfer between your in-house and third-party units. This period covers data sharing, training, and work transition.
- Communication and collaboration. Consider the time needed for regular communication and collaboration with the Philippine BPO team. Account for time zone differences and establish clear communication channels and schedules to facilitate effective coordination and feedback exchange.
- Onboarding and ramp-up periods. Include a period allowing the contractors to familiarize themselves with your business offerings, systems, and workflows. This time also allows you to address potential challenges and refine processes beforehand.
- Quality assurance and performance monitoring. Incorporate time for quality assurance and performance monitoring activities. By following this tip on outsourcing to the Philippines, you ensure that the Filipino team meets your quality standards and performance expectations.
- Scalability and future growth. Allow for scalability in your timeline, especially if you anticipate expanding the service scope or increasing the team size. Set aside an additional period to smoothly scale up operations and integrate new team members.
- External dependency. List any external dependencies that might affect the project timeline. Ensure the timeline accounts for potential delays if the BPO project requires coordination with multiple departments within your organization.
- Contractual obligation. Review the contractual obligations outlined in your prospective BPO agreement. Match the project timeline to these terms and conditions to ensure compliance and avoid conflicts.
- Buffer and contingency times. Your BPO timeline should include buffer and contingency times. It covers unforeseen circumstances, unexpected delays, or possible challenges during the outsourcing process.
7. Screen Prospective BPO Partners
When researching how to outsource to the Philippines, screen prospective BPO partners based on your criteria. As you plan your BPO strategy, take the time to study the work strategies, service offerings, fees, workforce skills, and technologies of various Filipino vendors.
Use online directories, industry associations, and referrals to support your assessment. Additionally, leverage job search websites, BPO-focused forums, and online marketplaces to broaden your insights into the country’s service providers.
Make criteria for your ideal Filipino BPO provider based on your research results. Consider the qualities below as you list your qualifications:
- Good market status. Examine the provider’s track record, client history, and industry credibility. Ensure the vendor has an exemplary reputation and a proven ability to deliver high-quality output.
- Skilled workforce. Filipino workers are generally well-trained and fluent in English. But you need to evaluate the talent pool of your selected BPO company. Be sure to assess the team’s ability to support your growth.
- Robust technology and infrastructure. Verify whether the service provider utilizes advanced technologies such as AI, RPA, and cloud computing. These tools help attain your desired output quality, accuracy, and speed.
- Cost-efficient services. Verify whether your ideal BPO partner offers high-quality services at affordable costs. While paying a premium for long-term benefits may be worth it, be cautious of hidden or extra charges.
- Cultural and language alignment. As you learn how to outsource to the Philippines, choose the provider that best matches your language and corporate culture. This affinity ensures a balanced and valuable work relationship throughout your relationship.
- Scalable and flexible operations. Assess the vendor’s ability to adapt to organizational changes and stay abreast of the latest industry shifts. The third-party team should be able to maintain or surpass its outstanding performance, especially during busy periods.
- Transparent data. Select a provider that can share all relevant data regarding your partnership. This professional attitude is vital as it fosters trust and honesty, resulting in joint business success.
- Strict security and compliance measures. Pick a Philippine BPO company that strictly adheres to national and international security and compliance rules. Ensure alignment of your data protection policies and measures to avoid spending $4.35 million mitigating a data breach.
8. Negotiate and Sign a Service-Level Agreement (SLA)
Remember that negotiating and signing an SLA is a big deal in your effort to know how to outsource to the Philippines. It requires good communication to clarify shared goals and build a solid partnership.
After specifying your needs and gathering insights, ensure your BPO journey in the Philippines goes smoothly by executing these steps:
- Determine the key terms and conditions you want to negotiate with your BPO provider. These provisions include service levels, response times, data security measures, and termination clauses. Also, identify your non-negotiable areas.
- Relay your expectations and concerns. Ask for the vendor’s input on how it can meet your requirements. Regularly exchange feedback during the negotiation process to ensure you and your potential BPO partner understand each other.
- Define specific service levels and metrics that you should include in the SLA. These metrics include response time, accuracy, customer satisfaction, and project turnaround time.
- Set penalties and incentives for not meeting the agreed-upon service levels and exceeding expectations. The fines should provide appropriate remedies to address potential service failures, while the incentives should motivate exceptional performance.
- Seek legal advice for your SLA’s review and finalization. This action ensures the contract complies with local laws and regulations. Most importantly, it helps safeguard your interests and minimize any legal risks associated with the BPO agreement.
- Wrap up and sign the SLA. Carefully review and finalize your SLA’s content before closing the deal. It should accurately reflect the negotiated terms and conditions. Once satisfied, sign the SLA and keep copies for future reference.
9. Assign Points of Contact (POCs)
Ensure that in your “how to outsource to the Philippines” agenda, you assign POCs to facilitate smooth coordination with your provider. These POCs serve as the primary go-to people for your company and the BPO team.
Ensure everyone is on the same page and works towards the same goals by implementing the following steps:
- Determine the POC’s specific roles and responsibilities.
- Select individuals who have in-depth knowledge of your company’s strategies.
- Ensure that POCs have clear lines of communication with the Philippine BPO team.
- Schedule regular meetings between POCs from your company and the service provider.
- Frequently review the POC’s performance and provide support as needed.
10. Set up Communication and Collaboration Tools
While researching how to outsource to the Philippines, you will find that establishing effective communication and collaboration tools must also be prioritized. These solutions facilitate improved cooperation and project management.
Use cloud-based communication and collaboration platforms such as contact center as a service (CCaaS) solutions and work management software to create a virtual workspace. This virtual environment bridges the geographical distance between your company and the Philippine BPO provider.
11. Onboard the Third-Party Filipino Team
Proper onboarding helps the BPO unit from the Philippines understand your company’s goals, processes, and business offerings. This stage enables the provider to integrate seamlessly into your workflow.
If you cannot physically present, introduce your company’s values, services, and products through training materials or video clips. Moreover, discuss the project’s requirements, scope, and timeline with the Filipino team. This ensures they have a clear understanding of what needs to be done.
12. Monitor Work Performance and Output Quality
Make sure to perform work performance and output quality monitoring as the second-to-last critical phase of outsourcing to the Philippines. This step validates that your BPO partner meets your requirements and delivers high-quality results.
But remember, this stage is a collaborative effort. Involve your provider in performance improvement and problem-resolution discussions to ensure your outsourcing partnership remains productive and successful.
13. Celebrate Success and Follow the Agreement
Ultimately, celebrate success and firmly commit to your agreement with your BPO partner in the Philippines. Acknowledging achievements and honoring milestones boost team morale and foster a positive working relationship. Besides, data shows that employee incentive programs can increase productivity by 44%.
Here are some ways you can recognize success and stick to the contract when collaborating with a provider from the Philippines:
- Acknowledge accomplishments by sending a personalized message, giving shoutouts during team meetings, or treating the team to food.
- Provide incentives and rewards such as bonuses, gift cards, or extra time off for outstanding performance.
- Maintain regular communication to build trust and reinforce the commitment to collaborating effectively.
- Encourage your Filipino BPO team to contribute their process improvements and innovative ideas.
- Resolve issues promptly and work together to avoid repeating mistakes during the outsourcing engagement.
- Honor contractual obligations by fulfilling on-time payment obligations and respecting confidentiality provisions.
The Bottom Line
Making the best use of Philippine BPO demands careful research, planning, and decision-making. You must know how to outsource to the Philippines to ensure ROI in the long term.
You must identify your needs and goals before finding the right Filipino service provider. Study the market and plan your BPO budget and timeline well before signing a deal with a provider. When you find the best vendor, maintain a good working relationship by following the recommended management steps in this guide.
Have you decided to outsource your functions to the Philippines? Connect with us. Unity Communications has a well-founded team and up-to-date infrastructure in the country. We are ready to meet your business needs with guaranteed cost efficiency.