Business

Not All BPOs Are Created Equal

Not All BPOs Are Created Equal

The BPO industry in the Philippines is getting more competitive over the years. As the competition tightens, it is just natural for BPO managers to adapt new practices and upgrade technologies to keep up with the evolving demands of clients.

According to Jamie McBrien, Director of optiBPO, outsourcing is an easy business to set up and anyone can call themselves a BPO. All you need is an office space with a reliable access to the internet. Unfortunately, not all BPOs become successful.

To attain success, these important factors must be in perfect sync – location, recruitment, staff retention, and technical infrastructure.

 

Transcript of the Interview:

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:  I’ve noticed you’ve sent me a caption that says, “Not all BPOs are created equal.”. Now BPO is a Business Process Outsourcing and we’re talking about outsourcing into the Philippines, particularly. Why do you say not all BPOs are created equally?

Jamie:  Yes. Wayne, unfortunately anyone can call themselves a BPO. All you need to get started is an office, making a connection and a desk. The mistake though, is to think that that is BPO and the problem is though, when we look at organizations that are trying to do more than a looking to manage your risk and get things right, that’s not the correct solution. 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 someone who’s just set up shop on the corner. Unfortunately, there’s a low barrier to entry but that also means that this quality is extremely highly variable between them and in comparing one with the other just based on price or another factor. It’s just not the way to go about it.

Wayne:  Now, I’ve got a little list of factors that affect BPOs here, and I’d like to go through them. The whole list is about location, and recruitment, and retention and infrastructure, but I’d like to take you through them one after the other. Now, the Philippines has got more than 7,000 islands and the great big ones start with Davao in the very South up to Luzon in the North. When you say location, are you talking about which city or island you’re on or are there other factors as well?

Jamie:  The big detail of locations as we’ve talked about previously Wayne, are Manila and Clark and to a lesser extent Cebu, but it’s a low location. But within those cities just saying, well the best option is Clark, which it is for a lot of teams and functions. I think there’s more to the thinking about that Clark is a fairly large expanse and a large area and there’s a range of different locations within that. Same is true in Manila, there’s a range of different locations. There’s a range of different building qualities. There’s a range of different locales compared to transport hubs. These are all the things that impact on the sort of staff that will be applying for roles with your organization.

Wayne:  I guess everyone is looking for the best BPO in the Philippines, is location a characteristic that has a big impact on that?

Jamie:  Yes, totally. If you’ve been in Manila and if a lot of us have and a lot of the listeners, podcasts would have been on this video, Manila is a difficult city in terms of logistics in getting around and not the same in Clark. The team members that you’re going to hire at and 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. And of course, it could be attractive because a lot of people that aren’t on those hubs which are of course more expensive. On paper, when you first look at them, you think, “Well, that doesn’t seem crap. That seems fantastic and in great value.”. You need to dig deeper and you need to have a look at that to say to yourself, “Well, 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 and even go Manila, Ortigas or Makati, just doesn’t cope. We need to dig into the next level.

Wayne:  So Jamie, you touch then on staff and that leads me to recruitment. Why does recruitment make a difference? Isn’t recruitment just recruitment? Recruitment, recruitment?

Jamie:  I think we all know there’s places that we all prefer to work and you’re on a location side and I know personally in my experience 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, all the recruitment to getting that right and 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. It’s important, the right organizations and the right BPOs have the right momentum and size, in this way size is critical. I have a natural attraction for team members. Team members want to work there. We all know where we live in our local countries. There’s certain employers and certain places that people want to work. They will apply to jobs at those locations intentionally because that’s where they want to be. I now actively and proactively seek those out. So sure, you might get some good okay candidates at other locations, other places reactively, unless, you’re a larger BPO provider in the right location, you just going to get the right team members and there’s a point for you. You won’t even see those candidates. So, this is whole pool of people that are you going to miss out on.

Wayne:  Well that’s the attraction of strategy I guess. The natural balance for attraction is retention. Do retention strategies make a difference?

Jamie:  Yes, absolutely. And again, you can’t be lucky in a smaller BPO, in a natural location to get some people. I’ll then wait to see how well you retain them. You think and look at your own life and your own cities onshore, people don’t change around the world who want to work in certain places for certain employers and when they get those roles, they will stick with them. And 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 sources is pretty critical. I have team members actually want to be there and then want to invite their friends to come join them to be there, and we all know that one of the best ways to sell is from referral and then same for candidates in a recruitment market. You can have an attractive location that works with the right level of support. You’ll have team members recommending to their friends and family, “Come join us here”. So, it becomes a self-fulfilling story if you get it right.

Wayne:  Now Jamie earlier on, you mentioned size of BPOs. How does the size of the BPO factor into this?

Jamie:  A lot of the 100 to 200 sizes are personnel that made us start and getting out there. They’re going to start getting barriers. They’re putting up an IT team, two, three, four maybe even five, as they grow and they start doing bigger more complex things, they’re inevitably going to hit a point where they’re going to struggle. The larger BPO is whether you like it or not, the 500 or 1000 seat BPOs have worked through those teething problems. At 100 or 200, you’re taking the risk of them actually making it to the next step. And don’t fool yourself, you see they’re here. They’re going to be smaller and they’re going to look after me a whole lot more. There’s a 300 or 500 seat BPO, they’re going to get their at same stage. You want to be the organization that helps them work through that, that deep. So, the larger organizations – more stability, more finances behind them that work through those issues, that work through the teething problems and they provide I think above grade level support. I wouldn’t take any of my clients to any of the small providers.

Wayne:  Jamie, you talk about the different sizes of BPOs and the risk of the smaller ones. I guess if you go and look on Google, you don’t see the ones that have gone out of business. Have there been BPOs that have just fold it up and disappeared in the night?

Jamie:  Yes, absolutely. What I was talking about before was, they get to a hundred, 200, they think they’re on to a good thing. They start realizing, they don’t have the right infrastructure for an IT perspective. They don’t have the right recruitment. They don’t have the right HR support and they don’t have the right reinvestment in systems to get things right. At that point in time, they’re likely to be cash flow positive and the idea of reinvesting those things brings them to a standstill. I was just said recently a clip on another BPO they say, “Jamie, he is a competitor of yours. Have a look at them. They’re doing exactly what you do.”. Only to find out they went out of business 18 months ago. 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. And I think, that when you work with us and the sort of organizations we work with, they’ve trod on that part. I’ve been doing this myself now for 20 years, optiBPO was part of optim2 which kicked off in 2008. So, we’ve been around a long time. We only work with strong providers that have been out there a long time and we now have the financial backing to be successful. So, while it can be attractive to see a swipe cost saving at another location that’s smaller and cheaper, I think you get what you pay for and you need to be careful because at the end, you’re managing risk about your business and taking that risk of service disruption. I just don’t think it’s worth it.

Wayne:  Jamie, I think you’ve touched on something we haven’t talked about this time and that is what optiBPO does. Can you just give us a quick burst for those people who are not familiar with optiBPO, about what it is you do?

Jamie:  Yes. 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 providers. And then from there, managing 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 bringing up the Philippines each day to talk through issues. We manage those issues on behalf of our clients. We’ve delivered BPO as a managed service which means that clients can get on with running their businesses and they can also build those risks managed and working with someone like us that has done many times and as I said, I’ve been in this business since 2008 and previously before that for my whole career and similarly for the other directors of the business.

Wayne:  And Jaime, is there a scope of activity that you outsource and a scope of activity that you don’t outsource? Or what sorts of positions or occupations are you involved with?

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, 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. We leave call centers to someone else and we don’t do hardcore outsource to IT development. Although, we do our IT support and IT resources for our clients. If you’re looking for a hard, one of those hardcore IT outsourcing businesses, that’s not us and we focus on that process-based knowledge to outsourcing.

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

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

 

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