Posts Tagged ‘Philippines’

by Oliver Schmid


A very large collections call centre in Lakela...

Image via Wikipedia

Over the last 15 years I have participated and managed various different outsourcing initiatives. With the first undertaking, in 1995, I was involved in was the onshore or domestic outsourcing of a technical support group to a “local” call center. Eventually the whole project failed after approximately 18 month. This failure was not due to a lack of training, but rather due to churn at the outsourcing provider. They had such a high turnover of call center staff that the outsourcer was not able keeping up with training and retaining the know-how at the call center.

Subsequent studies and interviews with other organizations and 3rd party outsourcing providers I conducted, eventually uncovered that this was a common issue within the US call center industry. Being a call center agent that works in a support role can be a very demanding and stressful profession and there are not many people that can or want to be the ones dealing with other peoples problems, frustrations and complaints. It takes a special person to do that and still be able to remain calm but assertive.

Eventually the call center was pulled back in-house and we built a complete call center from scratch. Meaning we put the technology behind to support the call center agents, like a telephone system (AVAYA DEFINITY) that supported important call center functions, like:

  • call center monitoring application (BCMSVU) through wall boards and computer integrated telephony (CIT) as well as call center statistics.
  • Integrated Voice Recognition (IVR) application (PROLOGIX)

We implemented technology that provided call center agents the ability to log and research tickets, escalate calls to a higher level as well as recording calls for training purposes.

But the most important aspect has been that we hired people that fit the profile of a successful call center agent. People that did not mind dealing with other peoples problems. People that did not get upset about being yelled at or >on occasion<  being cursed at for no obvious reason, except the callers frustration that may or may not have been caused by the call center agent. It was important to support the call center agents in their task and function. The agents were given the ability to take frequent unscheduled breaks, especially after a extremely stressful call. All agents had the ability to conference in a supervisor if required, either through caller demand or if the agent thought it would be wise for conflict resolution. Call Center Agents were encouraged to talk to their supervisors and managers at any time if they needed to vent after a call or were in need of advise how to handle certain situations.

The call center eventually became very successful and was in operation for over 4 years with almost no turnover.

Eventually the organization increased its sales volume, which within a period of 2 years more than tripled, that the current call center setting just could not handle the onslaught of support calls anymore without increasing call hours and the number of agents. The budget in place did not support this.  Agents started to get burned out and leave, which in the long run led to not only a loss (call abandoned rate) of over 70% of all support calls but also tarnished the brand reputation.

Once more we looked into outsourcing opportunities. Briefly we evaluated nearshore call centers but came to the conclusion that this would not have been feasible since there would have been no cost savings and careful evaluation of these domestic call centers eventually revealed that they still had a fairly high turnover, which would have meant frequent loss of know-how and retraining (added cost).

We started to look into offshore outsourcing and what is the first country everybody thinks when talking about offshore outsourcing. Correct – India. We talked to call centers in India, talked to their clients and evaluated the supporting infrastructure (national telephone infrastructure in particular) in India. We also talked to some of our customers and their opinion if they would have to talk to a person in India and we discovered a resentment from our customers. This resentment mainly originated from the fact that they had to talk to a person with, as they perceived, limited language skills. Often these perception was based on a heavy Indian accent, even if the person had adequate verbal and grammatical language skills.

The fact is that most Indian people grow up speaking Hindi (or any dialect of it), while English is the secondary language and even with the most advanced training it is almost impossible for most of the population not to have an accent.

We then started to look into the Philippines as possible call center location. We performed the Philippine call center evaluation with the same scrutiny as we did with the Indian call centers and we learned that the English language co-exists with Tagalog or Filipino as official language and that English was already taught in kinder-garden. Filipino is an official language of education, but less important than English. It is the major language of the broadcast media and cinema, but less important than English as a language of publication (except in some domains, like comic books, which are meant to speak directly to the Filipino psyche) and less important for academic-scientific-technological discourse. (1).

Eventually, it was decided to outsource the call center to the Philippines. The corporate head quarter of this call center was  in the US (NJ). In a matter of fact this call center organization even operated its own LEC (LEBBSI a FCC 214 licensed carrier)(2), with its own fiber optics lines from the US (CA) to the Philippines. It allowed for 24/7 call center coverage while the call abandoned rate almost overnight dropped from 70% to less than 1%. Startup cost for the Philippine call center was higher than with an onshore call center, since we had to fly equipment and trainers to the Philippines for the initial training.

Many organizations make the mistake to walk away from their responsibilities once the initial outsourcing process has been completed and leave their outsourcing provider up to themselves. This often can have catastrophic results and may lead to a complete failure of the outsourcing initiative.

During my time of researching various outsourcing organizations and talking to not only their management boards but also to their floor supervisor and even some agents, I had learned how important an open line between the organization that is outsourcing  and its provider can be. After the initial phase we had a structured approach on dealing with the call center and issues that did arise. We had established frequent scheduled conference calls to deal with issues while still providing floor supervisors to call our internal resources direct if required. We established an escalation procedures which all agents and in-house staff was aware of. We provided frequent product training via video conferencing for new employees or if existing agents were not completely familiar with the product and its functionality. We had a complete line of our most sold products on the floor at the call center. This way agents could actually follow the customer and explain more accurate and provide better support.

Over time, as we learned and became familiar with the call center and as they became more familiar with our product the call center became more autonome  and more efficient. Over time we introduced more of our more complex products to the call center.

We provided the call center agents with incentives, like t-shirts, marketing gadgets like pens, note pads, etc. and we even provided for the occasional lunch or other social gathering, which became a huge success. We even learned that call center agents from other groups were eager to join our groups.

In a matter of fact we worked with 2 support groups. The first group was a group that provided very basic trouble shooting support based on a Top 10 trouble shooting list as well as up an cross selling, where the second group handled more complex problems that were escalated by the first group. When the second group was unable to help the call eventually came back to us for follow-up support.

This call center has been in place now since fall of 2003 and has been and continues to be very successful. Initially we were able to provide the increased (24/7 and almost no lost calls) support at the same cost as when we operated an in-house 25 agent call center.

This story demonstrates that outsourcing can be successful if done right.


Oliver Schmid  led and participated in other successful outsourcing initiatives, like:

  • Warehousing and Logistics to 3PL providers
  • Data Center monitoring and support
  • Data Center redundancy & sustainability
  • ERP Implementation Project Management and Coordination

Sources:

(1)  Wikipedia: Languages of the Philippines

(2) Cyber City Teleservices


Outsourcing-offshoring-resized

Image via Wikipedia

Even the article ”

“Top 10 Risks of Offshore Outsourcing”

by ZDNET.COM is already 7 years old, it still contains valuable advice about offshore outsourcing. Many business are doing any of it and are wondering why their offshore outsourcing projects are failing or do not show the expected result or success.

Today while companies are struggling to reinvent themselves it is even more critical to have a structured outsourcing plan in place. A plan that everybody from the top down agrees upon and is able to follow. Not all organizations have the resources and/or skills and experience to do it right the first time around. In today’s economy it is critical that all aspects are considered and only a person with the respective experience can help to make an outsourcing task or project successful. Talk to somebody who has the experience and has this done already  multiple times successfully.


Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.

The Face of Supply Chain Outsourcing!

Supply Chain outsourcing has changed significantly over the last decade.


Supply Chain Outsourcing to a Third Party Logistics Provider or 3PL started out as having a product stored at an outside warehousing facility and then have the 3PL move the product from one facility to another based on instructions provided with each transaction order.

Today’s 3PL providers offer a range of additional services that range from

  • Physical logistics operations, like shipping and receiving.
  • Provide warehousing.
  • Manage complex operational handling, that may include repackaging, product maintenance, product consolidation
  • Administration.
  • Information Management Systems that integrate into and from a client’s backend ERP System, and automate the flow of transaction data, therefore minimizing human intervention and reducing data errors.
  • Providing customer broker services.
  • International freight forwarding, which may include the creation of all required customs forms and complying with all customs regulations (import & export) as well as providing so-called “Free-Trade-Zones”.

The type and number of services provided by the 3PL are defined during the engagement and contract phase, which also includes Service Level Agreements. These add-on services can quickly multiply and must be considered carefully.

Most important in any new 3PL relationship is not to go overboard and assigning to many services to the 3PL or not enough. Both scenarios can have not only a negative impact on your business but also on the business relationship between a 3PL and its client and, “Very Bad”, the client’s customer.

Why wouldn’t you give away as many business processes as possible right away to the new 3PL? Can it not just be in my interest to reduce my internal processes and labor in order to justify the outsourcing cost?

The danger here is, since it is a new partnership the 3PL is not to familiar with the clients operational processes, its customers and its products. Giving to much control and decision making to a new 3PL will cause friction in the day-to-day business operations between the 3PL and its client due to misunderstandings, lack of familiarity of business processes, and other requirements that were communicated either insufficiently or not at all.
At the same time will the 3PL client’s staff not be familiar with the 3PL’s operations and its issues and challenges. For this reason the client needs to monitor the 3PL’s operations and be able to assist and intervene right away until both sides are satisfied with the final outcome of the processes assigned and its expected results.

Keeping to much control inhouse at the client will have similar effects.
To much back-and-forth communication is required which can lead to misunderstandings and untimely business process fulfillment.
It can lead to friction between both parties due to misunderstood instructions and can be seen easily by the 3PL as being micro-managed.
It can lead to delays in any physical operations as it may pertain to shipping and receiving products into and from the 3PL location or processing and submitting the required paperwork or electronic equivalent transactions.
It is imperative to define responsibilities clearly. It is to nobodies favor to have contract and service level agreements that leaves the agreement up to interpretation by either party.

Any relationship with a new 3PL should be setup in stages with clearly defined time-lines in order for all parties to understand the expectations and responsibilities now and in the future.
Not doing so may lead to increased cost and delay in business processes implementation as well as it can put unnecessary strain on the business partnership.

Having a clearly defined Supply Chain Outsourcing Plan, will be a win-win situation for all parties involved, starting at the manufacturing operation, over warehousing and distribution to the final customers. It can lead for all parties to a reduction in cost and increase profits, since each party can concentrate on their core business processes.


Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.


Are you aware of the fact that offshore IT development outsourcing puts your software rights and confidentiality at considerable risk?

Why is this, you ask? Offshore developers are not bound by the laws of your business location. If your rights are not adequately protected these offshore developers may come back one day and demand royalties for their programs, even if you have paid in full for the software development. Usually in the US it is customary that such contracted work belongs to the end-client.

Under offshore outsourcing has no longer legal validity. Remember offhore developers are not bound by US laws and they may also sell the development at ay time to other organizations without your consent.

It is imperative to protect your intellectual property.

Similiar is valid to off-shore outsourcing of IT Infrastructure. It means somebody on the other side of the world has access to your systems and your data.

The loyalty of any employee within the outsourced provider is naturally not with your organization but to their own, if there is any loyalty at all. If outsourcing to countries like India there may be even some employees that hate you for your beliefs or the country you live or work in.

Due to geographical distance, difference and time and cultural differences there are many things you may not be aware of and don’t know. And what you don’t know can hurt you. I have heard stories of service providers taking whole systems hostage because a client did not want to renew or renegotiate a outsourced contract. You may be completely at the outsourcers mercy, if you are not able to retain some inhouse control.

And here again, remember: US Laws are of no help at this time.

You may say that there maybe laws in the country you have outsourced to that will protect you.

Do you know how enforceable these laws are?
Which actions do you have to take to have these laws enforced?
What is the cost involved?
Judicial systems in other countries and cultures work in different ways than in the US or in your country of business.
All this does not mean that you should not outsource and many companies have done so successfully. It simple means beware of the dangers and risks you are facing. Make sure that you have the necessary means to protect yourself and your business.

Outsourcing, whether onshore, near-shore or offshore done right can provide a huge operational and financial benefit to your organization. Before considering outsourcing, talk to an experienced consultant and also to a lawyer who has the expertise in regards to the laws and regulations in the outsourcing country of your choice.

Always remember to protect your 3 intellectual property rights:

Physical
Electronic
Legal
Don’t make the same mistakes other companies have made during their attempts to outsource and have failed.


Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers. He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.

Should I outsource?


All about, if outsourcing in general makes sense and what to consider and how to approach outsourcing for it not to become a failure.

Who has not heard horror stories about failed outsourcing initiatives. Many organizations that attempt outsourcing often forget that the key to any successful outsourcing initiative is shared goals and good management.

Often outsourcing is only seen as a way to save money quickly and there for implementations are rushed into without the proper planning and without any detailed documentation of the business processes to be outsourced. As a matter of fact, documenting all relevant business processes as they exist today and the way they should exist in the future with the new outsourcing service provider will allow for a much smoother and painless implementation. Only developing the proper documentation will allow all parties involved to clearly understand all the needs, requirements and challenges of these processes.


Use your in-house know how

It is also important to take responsibility for requirements. Incomplete or misunderstood requirements can make an outsourcing project more expensive as budgeted or even may fail a project completely. Nobody knows your business better than you and the outsourcer probably ever will. It is up to you to gather requirements from your business perspective and explain them to the outsourcer. Only this will assure that your needs and requirements are understood and documented accordingly. The next important step is providing training. Very often training is ignored, but good training is an important key aspect.


Do not blindly rely on your outsourcing partner

In order to show quick saving, poor documentation is often thrown at the outsourcing partner, with the expectation that they would be able to deal with it, and then the partner will be abandoned. Such outsourcing deals will fail for sure. It is important to maintain control. Outsourcing does not mean abandoning and/or losing control. It is wrong to assume that the outsourcing partner knows it all and maybe even more and there for will be able to perform better, faster and cheaper. It is important to have key people that control and maintain relationships with outsourcing partners. These key people will maintain control and guide and govern the outsourcer.


Milestones and KPI

It is also important to implement metrics or key performance indicators (KPI) that are important to your business. Assign people that understand these metrics and are able to perform benchmarking of your outsourcing partner against these KPIís and present them in a readable and understandable format that will allow to draw conclusions and take the necessary steps if required. Last but not least, review your relationship regularly, as you would do with an internal department or internal staff. Make sure to review KPIís, technical infrastructure and operational infrastructure. Combine reviews with clear measures to indicate problems or progress.


Pros + Cons from the employees’ point of view

Horror stories as mentioned above, will often emerge from the employees of the affected companies. Indeed, it may be challenging to work with somebody else from a third party outsourcing company, especially if one has just experienced colleagues getting laid off. But if you look closer, discharging experienced personnel may sometimes results from prior mismanagement, and it is possible that a well-performed outsourcing concept may be the only way to keep things rolling.


Remember if managed correctly, an outsourcing deal will be a win-win situation for both sides.


Oliver Schmid, EzineArticles.com Basic Author
Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chainoutsourcing initiatives.


A Definition of Outsourcing


Outsourcing is all around us and has always been. It just has become more apparent in today’s difficult economic times.

 

Unfortunately, outsourcing today is mostly associated with “Offshore Outsourcing”; meaning sending a certain function, business process or job to an oversea third party service provider, who has the ability to perform the same for less money.

We have to get away from this mindset that OutSourcing is equal to sending work overseas. Think about it, outsourcing has always been a part of our daily lives; as well in business as at home.

Some examples of business outsourcing are:

  • Hiring of cleaning crews to clean offices
  • Having trucking companies or the post office deliver your products and your mail … and YES this is outsourcing in its most basic form
  • Hire external service companies to maintain office equipment, like copiers, faxes, computers, etc.

Some examples for outsourcing in everybody’s private life:

  • Hiring a student to tutor your children
  • Hiring a cleaning person to clean your home (occasionally)
  • Taking a bus or train to work … and yes this is outsourcing, since you give somebody else the responsibility to get you from point A to point B and you don’t drive yourself.
  • Visiting a doctor… again, this is outsourcing. Who can afford to have their own doctor or nurse on staff?
  • The list goes on …
  • … and also here the list could go on and on.

Anybody may come up with their own examples about what they do not do themselves anymore in their daily life. Next, I want you to think about why you “Outsource” this functions or tasks and I bet that in 99.9% the answer is either money or lack of experience.

 

The same is valid for businesses. Outsourcing today is done because it just makes sense. Rather then investing in resources and additional education to do something that is not really a part of the core business function does not make sense anymore. It is cheaper and more effective to hire somebody who specializes in this area and has the skills, knowledge and the tools to perform the same function often even better and for less money or to say the least at the same cost to you.

Outsourcing does not make sense if one pays more for a service than if it would be performed inhouse. There for any outsourcing initiative must be evaluated carefully and a cost benefit analysis must be performed at all times

Again, Outsourcing does not mean a function is send overseas. There is onshore outsourcing, meaning outsourcing is performed by an entity in a neighboring or close by country or domestic outsourcing, which means the function is performed by somebody local or at least the same country.


Oliver Schmid, EzineArticles.com Basic Author
Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chainoutsourcing initiatives.