The Myths of Outsourcing


Quite a number of misleading notions are being disseminated when it comes to outsourcing. This article attempts to explain each of these myths and the reason why it isn’t true.

1. Outsourcing can solve all of your company’s problems.

This myth, by far, is top on the list. If you’re having problems with your business, outsourcing is not a magic solution that can make them disappear in just a snap of your fingers. For instance, there’s this company who thought of outsourcing to the Philippines because what manpower they have could not keep up the number of  customer service calls they are receiving each day.

To cost cut, they thought of offshore outsourcing instead of hiring more employees. However,  an analysis of their call logs revealed that most of the calls pertained to the poorly designed software interface of the product. In this case, outsourcing couldn’t solve the problem.

2. Outsourcing enables you to save on expenses.

Well, this isn’t completely untrue because offshore outsourcing (most especially) can enable you to save on labor costs. It’s important though to keep in mind that this will largely depend in how well you negotiated your contract with your outsourced company.


Top Office Functions that You Can Outsource


Top Office Functions that You Can Outsource

A company can outsource any business process, that much is true; however, you still need to determine which area of your company would benefit from going into such a venture. Here are some of the usual office functions popularly outsourced:

1. Secretarial Outsourcing

Secretarial tasks like scheduling or confirming appointments and booking travels can easily be outsourced either onsite or to an individual based on another location. With today’s advances in technology, it’s possible to employ people from virtually anywhere in the map.

2. Typing or Transcription

Clerical tasks that require conversion to written words in a particular format could be either dictated or sent through email or snail mail to an outside service. Examples of these are legal or medical notes requiring written words conversion.

3. Call Center Outsourcing

iFor a manufacturer or distributor of products that are inherently technical, there is every tendency for your customer support to encounter major issues. However, if you venture into call center outsourcing, your employees can concentrate on more critical matters of your business. Different sizes exist to fit your requirements from small enterprises located locally to huge centers beyond the oceans.

4. Sales and Marketing

Unless your employees have the required training, it’s wise to leave this area under the hands of professionals. Among the areas that you can outsource are advertising campaigns, public relations and telemarketing tasks.

5. Human Resources Outsourcing

It takes a lot of paperwork, not to mention forms, when it comes to hiring employees. Outsourcing this department can be especially beneficial.

6. Accounting or Financial Outsourcing

There are many third party vendors offering opportunities in this particular area. Leaf through your Yellow Pages and you’ll be sure to find a long list of accountants all willing and able to aid your business in preparing general billing functions, financial statements, payroll processing and special services for medical and legal billing.

7. IT Support

As one of the biggest outsourcing areas, it offers a variety of services which include the following:

    • Telecommunications
    • Desk Top Support
    • Help Desk Operations
    • Software Development
    • Network Management
    • Hardware Support

Among all outsourcing options, IT offers a particular advantage is the sense that it doesn’t necessarily have to be an all or nothing arrangement as you can outsource only in areas where your people don’t have the expertise.

8. Distribution Outsourcing

You can outsource distribution of your products to courier companies like FedEx or UPS. For this to be cost effective, you need to meet a certain volume of deliveries per month. Each need may be different from the other though so it’s advisable that you contact your local sales representative.

Lastly, you can also outsource a vast array of highly specialized functions, some of which are engineering and project management.

How Outsourcing is Reshaping Cities of the Philippines

Photo Credits from www.thehungrykat.comOutsourcing has enabled cost differentials to attract Western corporations who are looking for cost savings but it’s playing out in diverse ways among the different countries and its respective industries.

What’s been attracting attention mostly is the flourishing scene of outsourcing to the Philippines. Just recently, a known developer of call center companies Megaworld has made a $5 billion dollar investment dedicated to constructing what they dubbed as ten townships for Philippine corporations and its workforce.

Bloomberg says these townships are going to consist of 16 million square feet of office space to be constructed within a 10-year duration. Note however, that these offices will serve as the focal point of planned communities composed of shops and residences. This is to enable call center workers to take up residence near their offices as they are often operating on another country’s time zone.

Megaworld is adhering to the development model set by Eastwood which is a 40-acre area which stretches a total of eight miles from Manila’s center drawing a hundred thousand people daily.

According to Bloomberg, Megaworld is replicating Eastwood in six other locations within Manila and developing other sites in the cities of Lapulapu. Iloilo and Davao, the first two of which are located in Central Philippines while the latter in Southern Philippines.

So with such remarkable developments, what services are most likely to be outsourced to call centers in the Philippines?

Basically, what makes outsourcing to the Philippines attractive to international businesses is the people’s fluency in English, high educational attainment and inherent friendliness. The Philippines usually comes as a first choice when it comes to offshore outsourcing.

1. Inbound Customer Service

The Philippines earned the reputation for being the number one destination for voice-based customer service within the ten years that call centers first opened in the country. Apart from being friendly and hospitable to callers, Filipino agents have proven to be the best when it comes to productivity as they are able to attend to an average of 64 inbound calls everyday which is preferable to India’s 47 average.

2. Multi-Lingual Voice Services

The trend going on among call centers in the Philippines these days is the rise of multi-lingual call centers. This is due to most companies opting to have their voice services operation in just one focal location to cater to all types of clientele instead of spreading it out among different nations.

Among the Asian countries, the Philippines comes top on the list because aside from having the economical labor rates, it is the most diverse cultured country in Asia with the Filipinos having an uncanny bilingual capability that makes learning a new language easy for them.

3. Management of Healthcare Information

Thanks to the promotion of affordable health benefits by the US, their health care providers were pushed to meet standards their government has set, go cost-cutting and improve overall quality of medical service.

To be able to concentrate on this better, they outsourced tasks like medical transcription and medical billing to the Filipinos.

The Success of Cebu City’s Call Center Industry

Keppel BuildingThe past decade has been a challenging but ultimately successful ride for Cebu City’s call center industry. From its humble baby steps in 2004 to the gigantic success it is this year of 2014, it now holds the title of being second only to the country’s capital, Manila.

One of the main reasons for the boom of this offshore outsourcing is the low labor rates that have attracted many foreign investors to set up operations here in the Queen City of the South. There are currently 92 call centers operating in Cebu and undoubtedly, this number will increase. Some companies who have headquarters in Manila have put up a second office here and there are even a number of companies who opted to set up their headquarters in Cebu City.

Compared to Manila’s P16,000 to P18,000 monthly rate, call center agents in Cebu earn an average of P14,000 to P16,000. This is mainly due to Manila being the country’s capital with a workforce that is more competitive in nature. Despite the difference in rates though, job satisfaction among Cebu’s call center workforce is still high.

On the other hand, foreign investors are also pleased with Cebuano employees. Not only have they proven to be hardworking, they are also very good when it comes to speaking English, having an accent that is easy to understand for callers from both the U.S. and Europe. Such skills are very crucial in a business that requires quality customer service outsourcing and telemarketing.

If we talk about costs of operating a business, it’s definitely more economical in Cebu. For starters, rental rates of offices and commercial spaces are 31% lower, most of which start at P250 per square meter. Utility expenses such as electricity and water are likewise 40% lower, having a monthly cost of P4,000 if you have a small to medium enterprise.

As per Outsourcing Consultant Kittelson and Carpo Consulting, Cebu’s increasing number of investors from other countries indicate that it’s fast becoming an important offshore outsourcing center in Asia.

Albeit Manila’s call centers work at a faster pace, Cebu currently enjoys holding the number one provincial destination spot for foreign investors who want to invest and open call centers. As this industry continually grows, so will the city of Cebu in establishing itself as one of the top Philippine destinations when it comes to outsourcing.