Outsourcing to the Philippines, Asia CEO Presentation - Jonathan Smith
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Transcript of Outsourcing to the Philippines, Asia CEO Presentation - Jonathan Smith
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Lessons I Learned from my Outsourcing Career
Jonathan Smith, COO
05 August 2014
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About me
From Sydney, Australia
Two decades in the BPO and contact center industry
Been in the Philippines since 2002
COO and founder of SHORE Solutions
Provides overall strategic and operational responsibility for all contact center and BPO programs
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The Philippines is the best place for
offshoring
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Industry figures
2000 2010 2013 2014 20160
5000
10000
15000
20000
25000
10 500 900 1000 130040
8500
1330015500
25000Phil BPO industry growth
FTE Revenue
FTE (in K); Revenue (in M)
Source: IBPAP, Philippine broadsheets
2014 Tholons Top 100 Outsourcing Destinations: Rankings
Source: Tholons Advisory, Investments
and Research Service, Dec. 2013
Note: 7 locations of the top 100 are in the
Philippines (Manila, Cebu, Davao, Sta. Rosa,
Bacolod, Iloilo, Baguio)India Philippines Malaysia0
10000
20000
30000
40000
50000
2200 769 45
47000
12700
1700
Asia comparo
FTE Revenue Source: Asia Sentinel, 2012
CAGR of 25% from 2006 to 2012
Studies show that India’s BPO sector continues to lose grip and has lost 10% market share over the last five years.
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It’s more fun in the Philippines
Low labor and operating costs
Highly skilled and diligent workforce
Cultural compatibility with both East and West
Affordable and stable telecoms infrastructure
Cost-effective, Class A office spaces
Strong government support for the BPO industry
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IBPAP talent devt initiatives
Global Competitiveness Assessment Tool (GCAT)• An industry developed test to assess competencies
in basic skills for employment in the IT-BPO and GIC and other service industries
Service Management Specialization Track (in Undergraduate Education)• A 21-unit minor course or specialization track taken
by business and IT majors in college intending to go into IT-BPO and GIC or other service industries.
Industry-academe partnership
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A company’s success hinges on the quality
of its people
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Business transformation
Acquisition
• Leadership without direction
• Right people in the wrong roles
• High level of dysfunction• Siloed operations
Full integration/right management
• Aligned people to the right roles
• Higher productivity• Collaboration• Acquired entity went from major loss to profitability in 18 months
Realignment
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It’s a people business
Targetedrecruitment
Targetedrecruitment
Tailor-fit training programs
Tailor-fit training programs
Continuous learning and development
Continuous learning and development
Consistent performance management
Consistent performance management
Innovative rewards and recognition
programs
Innovative rewards and recognition
programs
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Quality trumps
cost
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Don’t give in to pricing pressures
Captives do it alone and pay above industry ratesYear-on-year escalations and inflation (e.g. power and rent)
Clients offshore purely on cost savingsNo long-term benefits and no long-term client relationships
Scen
ari
o 1
Scen
ario
2Sample scenarios that result in unsustainable outcomes
Offshoring must be with a view to achieve better customer service and delivery
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Differentiation is important
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Innovative outsourcing models
Comprehensive outsourcing
BPO - Operations Manageme
nt
Co-sourcing
Employee compensatio
n and benefitsShared support services
Asset services
Facilities outsourcing
Dedicated work areaMenu of shared support services/assets
Build-Operate-Transfer
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Re-evaluating your business
regularly is critical
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SHORE evolution
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As with any business, listen to your clients
and understand their needs
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Big enough to matter, small enough to care
• Financial services institutions
• Telcos• Food service businesses• Telcos & MVNOs
• Technology & IT companies
• Logistics companies
• Energy & utility companies (incl. telcos)
• Technology & IT companies
• Consumer business/Retail companies
• Financial services & debt collection
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Understand cultural and generational differences, adapt and
refine
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Cultural considerations
Western influences dominate but local characteristics prevail
There is no right or wrong – things are what they are
Cultural training is essential
Source: The Filipino IdentityGuillermo Gómez Rivera and José Mario S. Alas
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East vs. West
Icons designed by Liu Young
Opinion Punctuality
Problem-
handling
Anger
Trendy “Boss”
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Millenials think differently52 percent of the world’s population is under 30; global youth market will represent 75% of the available workforce and account for 70% of the world’s spending power by 2020.
Tech/web savvy – “Born digital”• Instant communicators via email,
social networks or text messaging
Family oriented• Flexible working schedules and a
more rounded work/life balance
Confident & ambitious• Expectations need to be managed
without stifling creativity and development
Team players• Regular team meetings and
collaboration with colleagues; wants to be involved and included.
Like to be loved• Constant feedback, gratitude,
relaying to someone they are doing a good job – mentor schemes
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SHORE Success
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Summary
The Philippines is the best place for offshoring
A company’s success hinges on the quality of its people
Quality trumps cost
Differentiation is important
Re-evaluating your business regularly is critical
Understand cultural differences, adapt and refine
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www.shoreoutsourcing.com