Executive Boutique

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Your Call Center Partner in the Philippines

Business Process Outsourcing

Is the global economic crisis affecting the offshore call center industry?

There are a lot of opinions on whether the current financial crisis is going to hurt the Philippine call center and BPO industries or whether it could actually help.  In a recent outing hosted by Globe telecom, the host of the event talked about how great the crisis is going to be for the call center Philippines business because now many US companies are going to be looking for ways to save money so they will be more likely to outsource.


I have heard this “global crisis equals more call center work for Philippine outsourcing” argument many times and I wonder if it is really true.  Aren’t US companies and all businesses, for that matter, always looking for ways to save money.  I do, however, see  some logic to this argument because when times get tough, businesses are more likely to look for ways to save money that they may have overlooked when business was going great and outsourcing to the Philippines can prove beneficial to the bottom line.  But is the global recession the kind of catalyst that will make a company outsource to the Philippines and is the increase in outsourcing enough to make up for the lost revenues from other call center business that will be lost.


For example, lets say you own an airline and you use inbound call centers to process you reservations and ticket sales.  You may employ a vast number of call center agents when business is good but what happens in times like now.  People are flying less so there are fewer reservations and call volume is way down.  You probably aren’t going to need so many reservation agents  so you force the Philippine call center to reduce staff and employ fewer agents for your inbound calls.  Jobs are lost and business is not so good for that call center you were using.


This also works when thinking about a customer service campaign.  You partner with a Philippine business process outsourcing call center to answer customer service questions about the scooter your company is selling but now you are selling 40% fewer scooters.  Shouldn’t you expect to get 40% fewer inbound calls and therefore need fewer agents.


I spoke with  a human resources specialist to get his take on how the crisis is affecting hiring.  “On one hand, you have some call centers that have gotten really slow here in the Philippines.  But on the other hand you have a lot of small call centers that are growing fast.”  He added that some contact centers have had to drastically reduce staff because their clients in the US have been slow in paying.  But in general he feels that the slowdown is evident in Cebu City where he does recruiting.  “It has made it easier for us to find talented call center agents with lots of experience.”

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Cultural Affinity between the US and Philippines

American businesses that capitalize on BPO to gain global competitiveness make English proficiency of workers a major consideration when outsourcing. It is important that their offshore workers are able to communicate effectively with their clients. But language is not the only consideration when choosing a location for their outsourced call centers. Companies also focus on the culture affinity of the areas that they are outsourcing to. This is why the Philippines has been such a popular destination for American companies looking for offshore call centers.


The Filipinos have been influenced and exposed to US culture for the last century and are very familiar with US business practices and customs. Businesses that need call center services  can save time and money by using a Philippines business process outsourcing call center because they can get workers who already have familiarity with US culture and don’t have to be trained on cross cultural techniques and language skills.


Philippine schools start teaching English in the first grade and classes are taught in American English. 72% of the Philippine population is proficient in English and its the third largest English speaking country in the world. In addition, their verbal skills are clearer and more understandable to the U.S. buyers than other competitive English-speaking country destinations.


This English proficiency allows the Filipinos to take advantage of what really makes them relate to Americans…the media. When speaking with Filipino call center agents, they can tell you about how “Friends” “Grey’s Anatomy” and “House” have showed them some things about how life is in America but they also understand that these shows are really the visions of Hollywood writers. Oprah is probably a better example of what life is like in the United States and it is one of the most popular shows in the Philippines.

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What contact center services can be Outsourced to the Philippines

American companies began to outsource many business processes such as call center services during the late 1990’s to offshore locations in order to save money and increase efficiency.  New telephony technologies gave these corporations the ability to send high volumes of phone calls oversees at lower a cost than anytime in the past.  Companies embraced outsourcing and used this opportunity to set up call centers in nations that had large English speaking populations and lower wages.  The first country to take advantage was India but as the technology spread the Philippines soon became a player in the international outsourcing arena.

Now the Philippines is host to many American companies supplying them with inbound call centers, 800 answering services and basic phone answering services.  From its humble beginnings in Manila the industry has also spread to places like Cebu and Davao. Companies that use inbound services are now looking beyond the phone call and are also offering live chat services and email support services.  Most of the top companies and other have setup their offshore call center services in the Philippines. Several factors have helped in this explosive growth of business process outsourcing: favorable government policies, excellent communication networks, comparatively low wages and skilled English speaking workforce among others. Cost savings, improved quality and productivity have encouraged companies to outsource call center services to the Philippines or to scale up their existing offshore operations.

The 12-hour time difference between western countries and the Philippines has made it an ideal call center outsourcing location, as companies can benefit from 24×7 services by outsourcing call center services to the Philippines.  The Philippines offers both inbound and outbound call center services.  Examples of outbound services that can be outsourced to the Philippines are:

lead generation
database selling
direct mail follow-up
appointment setting services
data verification services

Examples of inbound contact center services that can be handled in the Philippines are:

help-desk services
up-selling and cross-selling
product information requests
product information requests
Claims processing services\Customer Service

Since the Philippines has a large number of English speaking professionals finding call center agents that can answer your calls accurately and efficiently should not be a problem.  And given the strong cultural ties between the United States and the Philippines many of the common communication issues between customers and offshore call center agents are eliminated.

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Definitions of Call Center and Contact Center

A call center or contact center is basically any office that a company uses to make or accept phone calls. Usually a call center is set up in order to maximize efficiency so call centers are can be very big with large numbers of agents. Some call centers employ hundreds of agents and are open 24 hours a day 365 days a year. Contact centers are increasingly popular for today’s businesses where centralized customer service and support functions can be managed under one roof.

Call centers offer many advantages to companies. By centralizing their customer support functions or outbound calling, call centers can take advantage of economies of scale. Having all of their phone agents in one place allows business to centralize training and supervision. With the rise of advanced telecommunications technology, call centers can be located anywhere. This allows companies to take advantage of time zones and cheaper labor rates in different states and countries.

Call centers are usually divided into two main function areas. Outbound: employing agents who make telephone calls out to potential customers or people being surveyed. An example of an outbound call center would be a telemarketing campaign that sells magazine subscriptions or weekly delivery of your local paper. Many non-profit organizations use outbound call centers to solicit donations. Inbound: employing agents who accept phone calls. Examples of inbound call center would be a skateboard company who takes sales orders over the phone and offers customer service to those who have questions about the product they purchased. Banks and credit card companies employ huge numbers of inbound call center agents around the world.

Many call centers use a number of different technologies to help improve performance and customer experience. Inbound call centers often use automatic call distribution, this technology assigns calls to representatives on the order they are received. Other call centers utilize call monitoring, in which customer calls are randomly monitored by staff to ensure that phone representatives meet customer needs. Outbound call centers have their own technology. Predictive dialers make automatic phone calls from a call list and give the agent a live call only when a customer answers the phone.

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Why Should I Outsource my Business Processes to the Philippines

There are many answers to the question of why you would want to outsource to the Philippines.Some are more obvious than others.Probably the most basic reason is that the labor rates for talent in the Philippines are much less than the salaries in the U.S.   And you will still be hiring a college educated English speaking person with similar skill sets.The Philippines is the third-largest English-speaking country in the world, has an excellent educational system, and produces more than 400,000 college graduates each year.

Not all functions in an office can be outsourced but when you think about it so many functions can be handled by an outsourced employee. Virtual assistants are becoming very popular these days because businesses see the cost savings of employing an offshore employee. You no longer need to set up a computer and deal with all the paperwork that comes with hiring someone in the U.S. A well established call center in the Philippines can have your virtual assistant set up in a matter of days.

The cost saving are even greater when you look at a function such as outbound telemarketing. Let’s say your business is looking to generate leads for a sales campaign. For the price of 1 outbound telemarketer in the US you could employ 4 outbound telemarketers in the Philippines. Also your Filipino employees are going to be college educated and probably have a good attitude about the work they are doing. A career as a call center agent in the Philippines is highly sought after and well respected. Many call centers offer opportunities for job advancement and salary that don’t exist in other areas of the Philippine economy.

Filipinos have a well-deserved reputation as hard workers and excellent employees with a positive attitude toward relationship building and customer focus. Call center agents in the Philippines business process outsourcing industry exemplify this reputation. Their success as outbound telemarketers, virtual assistants and inbound customer service reps can help small and medium businesses grow.

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Is Cebu the next Manila?

Ever since the beginning of the call center industry in the Philippines,  when people think of a Philippine call center they think of Manila. It probably stems from the fact that many people outside the Philippines haven’t heard of any other cities and Manila was the birthplace of business process outsourcing in the Philippines. The cost saving companies can capture by moving their telemarketing and inbound customer support to this thriving metropolis is now well known.

What about the rest of the country?

It wasn’t often we heard about Cebu, the second largest city and major shipping port.But as Bod Dylan said the times they are a changing.

Many U.S. companies who are looking to outsource are now seeing the benefits of moving their BPO programs to Cebu instead of Manila.The island boasts a population of about 3.5 and most speak English very well.Cebu graduates 20,000 students annually from its universities and offers a strong, educated labor pool.

Cebu is exploding with job growth in the call center industry because of their strong English skills and high productivity. Job creation has been very strong in the outsourced customer service field. But call center agents are also finding work in sales lead generation, as virtual personal assistants and surveys.

Cebu has become a destination for educated job seekers from all over the Visayas, which are the southernmost islands in the Philippines.The call center industry in Cebu is also being helped by the islands infrastructure which rivals Manila in its high speed data connections to the rest of the world.

Cebu is not in an earthquake zone or typhoon belt, and there are no volcanoes on the island. Cebu has beautiful beaches, rich coral reefs and has become a destination for international travelers. Business leaders in the U.S. who are looking for a Philippines business process outsourcing center are smart to look to Cebu not just for its call center expertise but also for the beauty of the Philippines second largest city.

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Small and Medium US companies are finding it easier to outsource offshore

A successful product launch is a great thing. It means your product development team marketing team and advertising all created a perfect storm of development. But what happened when your launch is too successful. What if all of the sudden you are flooded with customer service calls, product information calls and basic sales ordering calls that your current staff and possibly your phone system is not ready to handle. This is when you may be considering hiring an inbound call center to help.
Many small and medium businesses that are looking for call center assistance focus on searches in the U.S. and think they are too small to consider an offshore call center. This can often be a mistake. There are many offshore call centers in the Philippines and India who are happy to take on smaller projects. Some call centers even specialize in small business customer service.
Most offshore call centers should be able to set up a campaign very quickly and start taking calls for your business. Once the call center agents are trained in how you want them to present themselves and your product, you are ready to let them start taking calls for your business. Your in-house staff will now be able to focus on what they were originally hired to do and your business can run at peak efficiency.
Another advantage of outsourcing your call center is flexibility. Let’s say your product has an amazing launch but then starts to taper off a bit. Using a Philippines business process outsourcing call center will give you the flexibility to ramp down the number of agents. An alternative that is not as available if you hired the employees yourself and increased you IT and phone systems to handle the initial burst of business. Or if your product is seasonal you can work with your call center to plan your needs throughout the year.
There may have been a time when outsourcing was for the big and mighty companies with international reach but now it is available to companies of any size. There are small offices in Ohio who might employ one virtual assistant in India and a manufacturer in Kentucky who may have a room full of call center agents answering their customer questions in the Philippines. The world is becoming a smaller place.

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March 12, 2009: New York Business Trade Show

Executive Boutique
Executive Boutique

Executive Boutique Call Center was a big hit when it exhibited at one of New York’s largest business trade show events outside of New York City on March 12, 2009. The event was sponsored by the Business Counsel of Westchester County, which has over 1200 businesses as members ranging in size from Fortune 500 companies to small family-owned businesses.

Mark Shapiro, Director of Business Development for Executive Boutique (pictured above) presented at the show and focused his discussions on how small and medium businesses can take advantage of the outsourced customer service and lead generation services offered by Executive Boutique Call Center.  “Small firms in the US often need more help with these tasks but are not sure of the steps they need to take to outsource to an offshore location like the Philippines,” Shapiro said.   He also pointed out that using the flexibility and cost savings of a Philippines business process outsourcing call center can give a company a great advantage over their competition.

Shapiro reported that the attendees he spoke with were most interested in affordable customer support along with sales and telemarketing services and he is looking forward to working with many of the businesses he met with at the show.

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Will Philippine Outsourcing change with the Obama Presidency?

Philippine Outsourcing
Philippine Outsourcing
© W.Scott / Dollar Photo Club

In keeping with the tradition of incoming U.S. presidents, Barak Obama has made much talk about the outsourcing of business processes to other countries like the Philippines and Indian.  The average American is probably happy to hear that President Obama wants to protect US jobs from the world of outsourcing.  But business leaders may not agree with this.  It is hard to deny the economic advantages of using offshore firms to do work for US companies.

Firms who focus on telemarketing, lead generation, and inbound customer support find it more and more challenging to handle these business processes at home.  Obama’s threat to eliminate tax breaks will probably not cause great pull-back from offshore outsourcing that is talked about.

Obama has promised to end tax breaks to companies who send work to offshore BPO companies.  The new president is pushing a populist campaign promise to force American companies to keep jobs in the US, saying to US Congress: “We will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.”

The experts say this is all part of the usual rhetoric as there is really no direct tax incentive awarded to US companies who transfer jobs to other countries.  The US tax code does have a provision that allows American companies to defer income tax payments on offshore profits until they are repatriated back home, and this is one code that Mr. Obama does want to eliminate.

The Philippines does not seem worried.  Their call center and business process outsourcing are as strong as ever, and government officials are predicting a 30 to 40 percent increase this year in outsourcing.  Philippine business process outsourcing call centers that specialize in customer service and outbound telemarketing have historically had high growth rates and this trend should continue.  As one business leader puts it “Tax breaks can’t substitute for the realities of economics”

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