Top Reasons To Consider Outsourcing Managed Operations to the Philippines

Companies aim to boost operations, cut costs, and satisfy customers. Outsourcing non-core tasks to the Philippines, a top destination with skilled talent and cost advantages, is a strategic move. Discover key reasons for this smart business decision.
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Written by Dion Jay Tality

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In today’s business landscape, companies constantly seek ways to improve operations, reduce costs, and satisfy customers. What better way to achieve these objectives than to outsource non-core functions to an offshoring provider in the Philippines?

The country is one of the world’s top outsourcing destinations, known for its skilled talent, lower labor costs, and customer-centric approach. Hiring managed operations outsourcing services from the Philippines is a smart move. 

Read below to explore the top reasons to outsource business functions or departments in the Philippines.

What Is Operations Management Outsourcing (OMO)?

OMO involves entrusting the management of your non-core business functions to a third-party service provider. This approach lets you outsource whole departments, such as your call center, information technology (IT) support, or human resources (HR) divisions, to an external vendor.

Let us differentiate OMO from the usual business process outsourcing (BPO) services to better understand this approach. BPO is a broad term for outsourcing specific processes, functions, or tasks. OMO involves outsourcing the entire management of a particular department or business unit.

OMO is ideal for startups and small businesses looking to prioritize revenue-generating tasks. Outsourcing service providers can improve their non-core functions, allowing them to focus on growing their businesses. Even big companies can capitalize on OMO to reduce operating costs and scale their operations.

Enter the Philippines as a top outsourcing destination. The country has over 700 BPO companies that assist companies and handle various accounts. These outsourcing firms usually establish a department for each account, consisting of a management team and its rank-and-file employees.

If you want to know which business functions thrive under such a structure, learn more in the next section.

Common Business Departments To Outsource

As they aspire to grow and stay competitive, many businesses turn to managed operations outsourcing in the Philippines as a strategic option. They outsource non-core departments to focus on their core operations. They can have peace of mind knowing third-party providers will handle these functions while they prioritize strategic initiatives.

Explore some common departments you can entrust to a BPO company in the Philippines below. 

  • Call or Contact Center. You can establish your call center or contact center for customer support in the Philippines. Outsourcing gives you access to trained agents, advanced technologies, and specialized services to enhance the customer experience and reduce costs.
  • Help Desk or Tech Support. You can employ a help desk or technical support outsourcing in the Philippines to handle IT-related issues. Your hired service provider will assist end users by troubleshooting, maintaining, and repairing hardware and software.
  • Medical Billing. Healthcare organizations can outsource medical billing to a BPO provider in the Philippines to ensure proper coding and correct payment of medical services. That way, they can focus on treating patients and saving lives.
  • Claims Processing. As a healthcare provider, you can delegate your claims processing tasks to a BPO provider in the Philippines. Your contracted provider will handle the claims review and adjudication process to ensure accurate and timely claim submission and payment collections.
  • Data Entry. You can outsource data entry services, which can be tedious and cumbersome. Outsourcing these functions to the Philippines can help your business reduce costs, improve data accuracy, and enhance data management processes.
  • Order Fulfillment. Outsourcing involves delegating the management of your order fulfillment process, from order placement to packaging to product shipping. Outsourcing this department to a vendor in the Philippines will reduce overhead costs, improve delivery times, and enhance the customer experience.
  • Administrative Functions. Most small and midsize businesses (SMBs) outsource their administrative departments to BPO companies in the Philippines. On top of these are accounting, payroll, and HR. Doing so lets you focus on generating income while leaving these critical functions to your hired provider.

Why You Should Consider Outsourcing Managed Operations to the Philippines

The Philippines has emerged as a leading destination for managed operations, whether front-office or back-office outsourcing. Many businesses across various industries have discovered the benefits of partnering with outsourcing providers in the Philippines to optimize processes, reduce costs, and more. 

Let us explore why you should consider outsourcing managed operations to the Philippines below.

1. Focus on Core Operations

One of the primary reasons companies employ managed operations outsourcing is to prioritize core functions. They outsource routine, repetitive, and time-consuming processes so that they can focus on their core business: generating more income and growing their operations.

Outsourcing a department to a reliable BPO firm in the Philippines is a strategic move. Your hired provider has the human and technological resources required to operate your business functions. Thus, you can rest assured that your department runs smoothly.

2. Reduce Labor and Operating Expenses

Offshore outsourcing, the practice of delegating tasks to an overseas country, is a viable solution for cost reduction. According to Deloitte, reducing operating expenses remains most companies’ top reason for outsourcing.

The Philippines is a top spot for offshore outsourcing, known for its low labor expenses and cost of living. Hiring a BPO firm in the country to run your particular department can cut your operating and labor expenditures by up to 50% and 60%, respectively.

3. Employ a Reliable Management Team

Outsourcing a department to a third-party service provider requires a robust management team. This team serves as a conduit between the client and the outsourced workforce. They are an external part of a business crucial to its overall success.

Managed operations outsourcing in the Philippines proves effective in this regard. BPO companies in the country usually create different departments for their accounts. Each department consists of a management team tasked with overseeing the entire operation. Such a structure effectively handles not just a process but the whole department.

4. Tap into a Highly Skilled Talent Pool

The Philippine outsourcing industry has a diverse pool of highly skilled talent. The country produces thousands of graduates from different fields and backgrounds. These graduates are ready to handle various customer service, IT support, or accounting functions.

According to a report, the country had an 8.4% increase in full-time employees (FTEs) for its BPO industry. The total number went up from 1.44 million FTEs in 2021 to 1.57 million in 2022. The Philippine government is also investing in talent upskilling to ensure a consistent workforce supply for the outsourcing sector.

5. Access Digital Tools and Modern Technology

 Another reason to outsource an entire department is to access modern technology. Companies that lack digital tools and resources take this route. For example, an e-commerce business with a growing customer base can outsource its customer service to leverage contact center as a service (CCaaS) solutions for its contact center operations.

The Philippines has a lot of potential as far as technology is concerned. The government has invested in establishing the country’s information and communications technology (ICT) hubs. Government agencies supporting the BPO industry have also recently introduced the Next Digital Cities 2025 program.

6. Take Advantage of High English Proficiency

Did you know that the Philippines is notable for its English language proficiency? English is one of the country’s official languages and is widely used in education and business. The global language is taught in schools, from elementary to college, and is commonly used in the workplace.  

The numbers do not lie. The Philippines ranked 22nd worldwide and 2nd in East and Southeast Asia for the English Proficiency Index (EPI) 2022 edition. Communication and collaboration are not problems when hiring outsourced operations management outsourcing services from the Philippines.

7. Guarantee Strong Work Ethics

Filipino workers are known for their strong work ethic due to their cultural values and upbringing. They are often described as hardworking, reliable, and committed. These attributes make them ideal workers for businesses looking to outsource.

Outsourcing to the Philippines lets you benefit from a workforce dedicated to delivering efficient, quality, and productive services. Your BPO team ensures your department runs as smoothly and efficiently as possible.

8. Ensure Western Cultural Compatibility

Companies outsourcing to overseas BPO vendors should be prepared to address cultural gaps. They should be as open and accepting of each other’s differences as possible. Otherwise, they might face communication issues, unnecessary conflicts, and potential delays at work.

Fun fact: The Philippines has a colonial past with the United States and Spain. This past has led to shared cultural traits and continued partnerships. This cultural compatibility makes the country an ideal outsourcing destination for companies in the West. Filipinos are usually familiar with Western countries’ cultural norms and business practices.

9. Get Full Government Support

The Philippine government has been actively promoting the country’s outsourcing industry. They recognize the industry’s contribution to the country’s job creation and economic growth. Why not? The BPO sector comprises 7% of the country’s gross domestic product (GDP), generating nearly $30 billion for the economy annually.

Thus, the Philippine outsourcing industry has the support of various government programs. These initiatives help attract foreign investors and expand their operations. By partnering with an outsourcing provider in the country, you can take advantage of tax incentives, infrastructure development, and workforce training programs.

10. Capitalize on the Philippine Outsourcing Market 

Did you know the Philippine outsourcing industry could grab a bigger global BPO market share? In 2021, the country’s IT-BPM industry ranked first in voice-related services, accounting for 13% of the worldwide outsourcing market share. It continues to expand its services by offering non-voice BPM and IT solutions.

The outsourcing industry in the Philippines has experienced significant growth in recent years due to its competitive costs, skilled workforce, and favorable business environment. Hiring managed operations outsourcing services from the Philippines lets you tap into the industry’s growth potential.

How To Get Started with Managed Operations Outsourcing in the Philippines

Philippine outsourcing offers many benefits to businesses, from accessing a skilled workforce and technology to reducing costs and increasing efficiency. However, it is crucial to approach outsourcing with a strategic plan and a clear understanding of the processes involved.

Whether you outsource tech solutions or customer support, here is how to get started with managed operations outsourcing in the Philippines: 

  • Examine Your Operations. You should conduct a comprehensive examination of your business to identify areas for improvement and your business needs. From there, you can set your outsourcing objectives and requirements.
  • Decide Business Departments To Outsource. After examining your business operations, decide which function or department to outsource. Is it your call center, IT support, HR, or accounting division? Your decision depends on which areas can benefit most from outsourcing. 
  • Search for Potential Service Providers. Now, you can research outsourcing companies in the Philippines. Start by searching online, getting referrals, and attending industry events. Screen your prospects based on their BPO track record, workforce and technology, and outsourcing cost. Lastly, select an outsourcing partner best suited for your business needs.  
  • Develop a Service-level Agreement (SLA). After selecting a BPO partner, negotiate the terms and conditions of your outsourcing engagement. Develop an SLA, a contract that defines your relationship with your hired provider. Include your operational objectives, key metrics, work scope, processes, and the consequences of a contract breach.
  • Set up Your Outsourcing Operation. Establish your managed operations outsourcing solution in the Philippines. Help your contracted provider set up the infrastructure, technology, and communication channels. Likewise, assists in training workers and ensures regular communication and collaboration. Finally, you are ready to launch your BPO operation in the Philippines!

The Bottom Line 

Managed operations outsourcing in the Philippines presents a compelling value proposition for businesses of all sizes. As discussed above, consider the top reasons for outsourcing your business functions or departments to this country. 

The right BPO provider in the country allows you to focus on your core operations. At the same time, it helps reduce your operating costs and scale your operations. Outsourcing managed operations to the Philippines can ultimately lead to your business’s growth and overall success.

Looking for a reliable managed operations outsourcing partner in the Philippines? Unity Communications can help you with its front-office and back-end outsourcing services. Whether you need customer service, technical support, or administrative solutions, we have you covered. Contact us today.

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