Onshore Support in Developing a Successful Offshore Relationships

Growing a successful offshore team is difficult to do without the proper guidance, advice and support from onshore leaders. You need to make sure that you have the right level of onshore support and work with a high-performing outsourcing company to secure your company’s growth.

Offshoring your business operations requires a level of management that is different in managing a local team – you have to be more proactive in engaging with them to make sure that your offshore team is right on track with your organisation’s goals and visions.

Choosing the right offshore leaders will also play a vital part in your success. They must be capable of bringing both teams – offshore and onshore – to work together towards a common goal.

Website: www.optibpo.com

Rethinking your problem – cost reduction and performance improvement

Today more than ever, Chief Financial Officers (CFOs) are expected to be more than just “numbers people.” Unless you’re in a time warp, Finance leaders are diversifying rapidly, moving out of pure Finance towards performance enhancement and business growth. Companies and their Boards want their CFOs to be tactical business partners and key drivers of organisational strategy.

While organisations attempt to remain competitive (and grow), deliver shareholder return, and innovation is genuinely being encouraged; company Boards are scrutinising costs more closely than ever. It’s perhaps not surprising then, that in a recent survey by Deloitte, 45% of CFOs admitted costs are the factor posing the most significant risk to their companies over the next year.

Labouring Over Labour

A large part of a CFO’s success depends on the quality of their Finance team. But globalisation, the rise of millennials, and general market developments mean the labour market is under pressure. It’s becoming harder and harder to find or replace top talent or niche skills.

Building a team of people with the right mix of skills and experience is critical. But finding and hiring people like this takes time and, more crucially, money. This impacts productivity, and limits the ability to expand and delivery customer benefits.

This is a particularly common problem in developed economies such as Australia, United King and parts of Europe, and North America. In these locations, labour costs are very high, and there are talent shortages. In addition, many companies are protective of their current employment practices, and are slow to accept change, persevering with rising costs and under-performing functions across their business.

Reshaping the Problem

For many companies, offshoring offers a genuine solution to these, and other, problems. They’ve found the practice has delivered effective cost and performance improvements, resulting in significant savings without sacrificing productivity. In fact, driving productivity gains through the ability to enhance services, and hire ahead of the curve.

For many other organisations, however, the concept of offshoring is still misunderstood and for some, frowned upon. There is a widely held belief that it causes cultural disruption, and problems with communication due to language and other perceived differences.

Essentially, there are four areas you should explore when considering an offshoring program. These are:

1. Cost reduction

This is an obvious focus, with executive and Boards placing increasing pressure on their Finance teams to achieve tighter and tighter financial objectives. With a 70-80% reduction in the cost of like-for-like staff, when comparing the Philippines to Australian Finance staff, there are naturally huge opportunities to explore. This is only the tip of the iceberg, but an obvious component of your business case.

2. Capability and scale

Talent shortages and financial pressures make offshore recruitment an attractive option. For some companies, this is often the only way to remain viable in the marketplace. In addition, many organisations are seeing the building of an offshore model as a way to increase customer engagement through enhanced services.

3. Focus on high value

Onshore talent often has much of their day taken up by administrative or lower value tasks. We are in an era where the ‘business partner’ is highly valued. Yet, despite this, organisations frequently fail to create an environment favourable to the growth of business partner functions.

The cost of hiring an offshore employee to take on these lower value tasks could be the same as a more senior business partner’s annual bonus. When you look at it like that, it’s not hard to see why offshoring is directly linked to cost-effective performance improvement.

4. Innovation

Finding talent in offshore environments enables many companies to offer new services or solutions for their clients, and this is often the overlooked opportunity in most businesses. This not only becomes a “value-add” for the client but potentially a new potential revenue stream. Ultimately, it’s lower risk, low cost innovation that may never be available onshore. Many examples of this can be seen in financial modelling, engineering, technical functions and other customer engagement or customer experience-based functions.

Getting It Started

Many companies like to start small, to see how the model works for them and increase engagement over time. Once they are happily established, however, and have seen for themselves how well it works, most adopting organisations accelerate their offshore expansion process and explore offshore innovation opportunities with more confidence.

Not all BPOs (offshore providers) are created equal

The following is the transcript of an interview recently conducted with Wayne Bucklar from Vertical Internet Radio. The video of the interview can be watched here.

Wayne Bucklar:  Joining me today is Jamie McBrien, Founder and CEO of optiBPO. Jamie, welcome to the program.

Jamie McBrien:  Hi Wayne. Thanks for having me again.

Wayne:  Do BPO companies vary from one another?

Jamie:  Yes. Anyone can call themselves a BPO. All you need to get started is an office, an internet connection and a desk. It is a mistake to think that this makes a BPO, as when you are looking to manage your risk and get it right, there is a lot more to it if you want to ensure success. All BPOs aren’t created equal. They’re all in different locations, they’ve got different technical infrastructure, they’ve got different ability to attract and retain staff. There’s a number of factors that make a high-performing BPO versus a corner shop. Unfortunately, there’s a low barrier to entry but that also means that quality is highly variable, and comparison is often not apples with apples.

Wayne:  How does location affect BPOs?

Jamie:  The big locations are Manila and Clark, and to a lesser extent Cebu.  For many of the organisations we work with, Clark is the best location, overcoming some of the logistical issues of Manila.  However, even within these two cities, all locations are not created equal.  There are a range of different building qualities, locations when compared to transport hubs, and a range of other factors that impact on the ability to attract and retain staff.

Wayne:  How does location play a big factor when looking for a BPO company in the Philippines?

Jamie:  If you’ve been in Manila and if a lot of us have and a lot of the audience would have, Manila is a difficult city in terms of logistics. The team members that you’re going to hire probably either need to ride a motorbike, or catch public transport which is a jeepney, to work. Critical is to have your BPO near a transport hub. If your BPO is not near a transport hub, you’re going to have team members that have to make that extra leap beyond the hub to work for you. You need to dig deeper and you need to have a look at that to say to yourself, “what sort of team member am I going to attract?”. I know all of us here whether we live in Australia, New Zealand or the UK, we like living and working near areas that are easy for us to access. It’s critical for you to understand before you make your decision, the exact location of that BPO and what that means for your team members in terms of transport and access. So, just choosing Clark and Manila is not enough, we need to go to the next level.

Wayne:  How does a BPO company’s recruitment model make a difference?

Jamie:  I think we all know there’s places that we all prefer to work, and I know personally living in Sydney, I have only really applied for jobs in the CBD or near the CBD. I don’t really care if there’s a fantastic job in the outer suburbs, it’s not where I live, it’s not where I want to work, it’s not where I want to be. So, just as anyone can set up a BPO, anyone can put a job at up on monster.com in the Philippines or a job board and start screening applicants. That doesn’t mean they’re going to get good applicants, that means you are going to get applicants. The successful BPOs have the right momentum and size, and naturally attract the right team members to work there. We all know in our home countries there are certain employers and certain places that people want to work. We will apply to jobs at organisation’s intentionally because that’s where we want to be. So, unless you’re a larger BPO provider in the right location, you just aren’t going to get the right team members. You won’t even see those candidates. So, there is whole pool of people that are you going to miss out on.

Wayne:  Do retention strategies make a difference?

Jamie:  Yes, absolutely. Again, you can be lucky and attract a candidate in a lesser BPO, but then I’ll wait to see how well you retain them. One of the reasons is that those larger providers can provide a level of support, and infrastructure, and other activities and reinvestment in teams which means that people actually prefer to work there. Getting all those things right is hard. As I said, anyone can open an office, put in their connection and start employing staff. It doesn’t matter if they don’t enjoy being there each day, getting that mix right, that secret sauce is pretty critical. In the better BPOs, people want to be there, and will invite their friends to apply, and we all know one of the best ways to build a high performing team is through referral.

Wayne:  How does the company size affect BPOs?

Jamie:  There are lot of 100 to 200 sized BPOs that have made a start, but they are going to start hitting barriers in their growth.  IT support becomes a problem, HR support becomes a problem, facilities become a problem.  The larger BPOs at 500 or 1000 people have worked through these teething problems.  At 100 or 200, you’re taking the risk of them actually making it to the next step. You need to ask yourself the question if you want to be the client that helps them work through that evolutionary step.

Wayne:  Are there BPO companies that have not become successful?

Jamie:  Yes, absolutely. Many get to that 200 number, and then realise they don’t have the right infrastructure, HR, facilities, or recruitment.  They don’t have the right reinvestment in systems and people, and they don’t have the cashflow to reinvest.  There is a litany of smaller BPOs that have gone out of business. As I said, it’s an easy business to set up, anyone can get an office. It’s a hard business to get right and it’s also a hard business to scale and a hard business to build, engage and retain teams. We’ve walked this path many times.   I’ve been doing this myself now for 20 years, and optiBPO is part of optim2 which commenced business in 2008. So, we’ve been around a long time in terms of this market. We only work with strong providers that have been out there a long time.  So, while it can be attractive to venture towards the smaller providers, you get what you pay for, and in the end the risk is to your business, and the cost of remediation high.  I  just don’t think it’s worth it.

Wayne:  What does optiBPO do for their clients?

Jamie: optiBPO helps organizations plan, build and manage teams in the Philippines. We provide onshore support to create offshore success. What does that mean? That means that we spend time with you. We have offices in Sydney and London. We will spend time with you in each of those locations to help you build the plan, get you confident about what it is they are doing to understand any name or list of pre-requisites and that’s often about getting processes right, getting other collateral in place, getting systems ready, and then actually helping manage the transition into the BPO. From there, we support the management of the team on an ongoing basis. The idea is that in the end, do you really want to be managing a BPO in the Philippines and we’re ringing up the Philippines each day to talk through issues? We manage those issues on behalf of our clients. We deliver BPO as a managed service, which means that clients can get on with running their businesses, while manage the risk of offshoring.  We’ve been in business since 2008, and I personally worked for other large consultancies prior to that providing similar services.

Wayne:  What types of activity does optiBPO outsource?

Jamie:  We are largely focused on knowledge-based outsourcing, so what does that mean? That’s a range of activities and it’s continuously moving upmarket but that can be anything from accounting and finance, IT support, purchasing, processing, customer service. All of those knowledge-based positions that you have onshore are activities that we consider doing offshore.

An easy way to think about is what we don’t do. We don’t do call centers, and don’t do hardcore IT development.

Wayne:  Jamie, it’s been a pleasure having you with us on the program. Thanks for joining us again.

Jamie:  Thank you Wayne.

Why the Philippines is the only choice for outsourcing

The following is a transcript of my recent interview with Wayne Bucklar from Vertical Internet Media on why the Philippines is the only choice for knowledge based outsourcing. The interview can be watched on YouTube here.

Wayne Bucklar:  My guest today is Jamie McBrien. Jamie joins us from Australia. He is the CEO of optiBPO and he is here today to talk to us about his work in offshoring and outsourcing. Jamie, welcome to the program.

Jamie McBrien:  Thank you Wayne. Thanks for having me.

Wayne: Why have optiBPO chosen the Philippines for its outsourcing services?

Jamie:  I’ve been around the outsourcing marketplace for a long time from a consulting perspective, and a managed service perspective, and for me, the Philippines is the only choice. It’s easily the largest for knowledge-based outsourcing market at $22 billion, and is growing. So, it’s a large mature market that we just really think is the global leader.

Wayne:  Now, I would have thought that India was the global leader?

Question:  Where does the Philippines place among outsourcing countries?

Jamie:  Yes, well look India is still good at specific areas,  particularly in the IT space, but in knowledge-based outsourcing which what we do, the Philippines has leapt ahead of India with better retention rates, better costing, and better attraction of capability.

Wayne:  Does the Philippines have a solid economy to support Western firms into outsourcing?

Jamie:  Recent research released a couple of weeks ago said that the Philippines is now the 10th fastest growing economy in the world, which is fairly amazing given that it is coming off an ‘okay base’. It’s the second fastest growing in Asia. The fastest growing now is Laos which is coming off a low base. So, really in terms of the more mature developing economies, the Philippines is the fastest growing in Asia at around 6.8% GDP growth. Interestingly though, even with that growth, people have concerns around labor costs and increased labor costs. Labor costs have remained fairly steady for the last couple of years, and there’s not a whole lot of upward pressure. This is helped out by the fact that the government has a high level of support for this as an industry, regardless of what some of the media might say about the Filipino government.

Wayne:  What is optiBPO’s view on the media coverage about the Philippine government?

Jamie:  From an outsourcing perspective, this is not having any impact on us. The Philippines is a country of over 100 million people, and over 1,000 islands. Sure there’s parts in the Southern part where there has been some issues. Those issues are a matter of history, and I’m not here to argue about that history. This has been happening for a long period of time down towards Indonesia and Malaysia, and it has previously been isolated. It has flared up recently, but it’s not impacting on the big BPO locations of Manila, Clark / Angeles and Cebu which are a fair distance from that, and really I don’t see any impact.

Wayne:  Should Western firms looking to outsource need to be concerned about current news about the Philippines?

Jamie:  I think in the larger metropolitan area what the Western media is reporting on really isn’t impacting. But again, I need to reiterate, the Philippines is a country of 110 million people. I don’t want to negate or gloss over the fact that these sort of issues are real and they do impact on people. But again, if you look through the United States, Australia, the UK, they have their own domestic issues that they are working through.  Some people might not agree with the Philippines government’s approach to some of those issues. But for us, it’s really not impacting on outsourcing or offshoring as an industry.

Wayne:  What is optiBPO’s view about overseas staff in the Philippines with English as their second language?

Jamie:  English is the language of the Philippines. It’s the third largest English language speaking country in the world. All of the laws, the legislation and courts run on English. Kids learn English at school from an early age, and it’s not English as a second language. So, they’re starting from a great baseline, and there’s around 93% literacy rate. So, there’s around 90 million English language speakers in the Philippines compared around 60 million in the UK. Meaning, there’s more English language speakers here than in the UK, and a lot more than Australia.

Wayne:  That’s an extraordinary finding. It must rank very highly in the world.

Jamie:  Yes. It’s the third largest English language speaking country in the world which again, it shocks a lot of people, and clients and friends but I let them know that yes, third in the world.

Wayne:  What is optiBPO’s view of the Philippines’ adaptation to technology and social media?

Jamie:  I think that’s one of the really interesting things that 110 million people around 400,000 University graduates a year. The average age of the Philippines is 22 which is such an extremely young population. They’re the 10th largest user of Facebook in the world, the 6th largest user of Twitter. I bring those numbers up just to demonstrate for the fact that not only are they young, they’re highly educated, they’re qualified, they’re capable and they’re engaging in new technologies. In the end, all our businesses are getting out there looking in innovative ways to do that and I think that those statistics demonstrate the fact that that is absolutely the case here.

Wayne Bucklar:  Is the Philippines’ young workforce different from the rest of the world?

Jamie McBrien:  Yes, on average the Philippines is young. In countries like Australia, we’ve got a growing an ageing population, well above 22, and increasing every year. Having a young pool of talent to be able to support an older generation in our own countries, it is critical and that’s what the Philippines can provide.

Wayne Bucklar:  What is optiBPO’s view on outsourcing stealing jobs from home countries and exploiting third-world workers?

Jamie McBrien:  I think that’s absolute nonsense Wayne. We live in a global world, knowledge is global. Australian businesses that are embracing this are not leading edge, and not ahead of the curve. This is a mature business strategy. In the last 10 years it has really started to take off, and we haven’t seen our employment rise in Australia. We’ve seen a change in the jobs mix, and at the same time we haven’t seen unemployment decrease in Philippines. Both countries are in a situation where the rising tide floats all boats, and we’re all coming up to a different level. We’re all working in different ways, and that is creating success for everyone.  For me, I think that’s a fantastic outcome, not only the businesses in Australia, and New Zealand and Europe, but for the Philippines and the world at large.

Wayne Bucklar:  What is optiBPO’s target market?

Jamie McBrien:  I think the opportunities open for a range of businesses. I don’t think anyone is truly excluded from this as a strategy. We always talk about the fact there’s the like-for-like replacement but there’s also taking certain activities and pushing them to an offshore layer or building new and exciting services. So, in every organization, if you think for those areas – there’s an opportunity there for everyone. Lots of people are embracing it, there’s a long way to go, and I think that it should be part of your consideration in your business strategy mix.

Wayne Bucklar:  Which parts of the Philippines is suitable for outsourcing?

Jamie McBrien:  There’s lots of locations people are outsourcing and offshoring to but for me, the big three – Manila, Clark and Cebu. But out of those three, the two really that I like to focus in on are Manila and Clark. Manila is the National Capital Region, it’s the capital of the Philippines. It has 22 million people and a couple of main CBD areas that are focused on outsourcing and offshoring one of the most densely populated greatest city regions in the world. So, it’s a fantastic catchment area for a range of highly capable skill sets with an international airport, that supports the US, Europe and Australia. The other location Clark, 80 kilometers north of Manila. Great government support out there with over 380 foreign companies and a catchment area around 3 million people is also a great choice. The decision between the two is based on customer requirement, the sort of skill sets that you’re looking for, and the functions that you are looking to build. It also has an international airport so it’s great you have access from Hong Kong, Singapore and South Korea or via a stopover in Europe, in the U.S. and Australia or you just drive up the road, that’s 80 kilometers from Manila.

Question:  How do people get in touch with optiBPO?

Jamie McBrien: I can be found at jamie.mcbrien@optibpo.com. Shoot me an email or look at our website optibpo.com. It’s got a contact form on there as well as our general office details and some explanation on how we work.

Wayne Bucklar:  Jamie McBrien, CEO of optiBPO. It’s been a pleasure having you with us today.

Jamie McBrien:  Thank you Wayne. Thanks for having me.