How To Choose Where To Locate Your Outsourcing Operation
SAMPLE GUIDE from “Outsourcing to the Philippines made easy”
Choosing where to locate your outsourcing operation is one of the key decisions you will need to make when outsourcing to the Philippines.
Today, you will find outsourcing operations located in almost every major center in the Philippines, including Manila, Cebu, Davao, Baggio, Angeles City, Subic Bay, and many more.
Regardless of which center you select, the decision on where to locate your operation / account should take into account the following key factors.
These are standard points you would consider no matter which country you decide to outsource to. Ironically, many companies fail to address them adequately as they are driven by price.Whilst price is important, it is NOT one of the points listed below. If you base your selection of a service provider or location on price alone, then the chances of getting caught out heighten. Price is something you look at AFTER you have answers / are comfortable on all of the below.
#1: Is The Expertise You Need Readily Available For Your Outsourcing Operation?
In the Three Ways To Find The Right Staff Guide, I mention a statement by a senior manager in one of the Top 3 operations in the country about how difficult this can be. That statement applies to Manila.
In provincial centers, the pool of “experienced” staff is often much smaller. However, they are there … as many people prefer to live and work close to their families. The benefit for you is that the cost is generally lower.
(Transportation to work is an issue everywhere. Manila’s transportation issues are well documented in the media. In provinces, many good people also have transportation issues for different reasons.)
If you are going to use an established service provider, then get a feel for the quality available by meeting some of their staff and satisfy yourself that the expertise you need IS available.
If you don’t want to travel to the Philippines just yet, organize a teleconference with staff so you can get a feel.
If you are going to go it alone, then make sure you get an experienced team leader / manager on staff and have them source, train and manage staff for you.
#2: Finding Senior Management You Can Work With
Having been both a supplier and user of outsourcing services, this is a “make or break” factor for me when it comes to outsourcing.
As a supplier, I have walked away from companies seeking a quotation for a requirement, and when wearing a customers hat, I have also told quite a few suppliers to go away … simply because I don’t feel comfortable with the style and / or principles of their management and how they run their business.
Fortunately, most service providers are committed to high levels of service excellence and understand what is needed to resolve problems so they can deliver agreed service levels.
However, with some organizations, you may confront a manager or owners whose ego gets in the way and won’t back down after making a statement which may end up in their “losing face”.
If you confront this and get a feeling that the supplier is arrogant, stubborn, a know-it-all, or one dimensional, then you will find it hard to resolve issues down the track. Walk away before you start. (There are some companies I have excluded from the list of service providers in this program for this very reason.)
The same principles apply to appointment of any senior manager you bring onto a team of your own.
Note: Many companies opt to work with service providers owned / operated by companies in their own country as often they have a contact point close to home they can deal with. This makes sense, particularly for back office needs.
#3: Is The Technology Base Suitable and Solid?
Technology is a key element in almost every function handled by outsourcing service providers. There are five key elements to this:
1.) Connectivity: Consumer Internet connections in the Philippines are the 2nd worst in all of Asia. However, quality service providers use dedicated, high speed connections capable of delivering VOIP and fast Internet connections as so much of what is being done nowadays is performed on the cloud. They cannot meet required service levels without them.
Some use facilities based in the USA rather than deal with local companies because of this.
Occasionally, these services go down and the service operator is off the air. Don’t over-react – this can happen anywhere in the world. Simply monitor the downtime frequency and, If it is too high and no action is being taken to resolve it, then start to look elsewhere.
2.) Computer Equipment: Many small service providers are still using very old hardware and, often when they replace it, they do so based on price and end up with hardware which uses 2-3 generations old processors. They forget that a processors speed impacts on the speed of the Internet and VOIP connection. You want the best.
Many service providers still use Windows XP. This hasn’t been a problem and probably won’t for a while even though Microsoft no longer suppport XP. The processor speed is the real issue.
3.) Communications Equipment: Everything from headsets to switching equipment, firewalls, and more.
Firewalls are a critical area as there are hackers around the world who tap into (particularly smaller) call centers and use their facilities as a channel for call centers they are associated with. When this happens Telecom charges can suddently go through the roof.
This is the responsibility of your service provider. However, if you are estabishing your own operation, you MUST ensure your firewalls are up to scratch.
4.) Data Security: Includes security of any payment (credit card, debit card, bank account) information you hold and your databases, even external databases you have secured on a rental basis and agreed to not share anywhere else.
There have been breaches in this area in the Philippines, just as there have been in other parts of the world. It’s up to you to ensure your data security is solid enough to ensure unscrupulous staff don’t do the wrong thing.
5.) Building: Many old buildings are not designed for technology based activities and so you need to check that the building you are considering has adequate electrical back up (i.e. generators) and that running wiring between floors won’t be a problem.
Fortunately, most new buildings – and quite a few old ones – cater for technology based activities with proper electrical wiring shafts between floors, high quality generators as power back-ups, etc. Large service providers have all of these covered. Smaller providers operating in PEZA approved buildings are also not a problem.
Nonetheless, ask questions relating to these.
If you are going to establish your own operation, make sure you consider all of the above.
#4: Who Else Is Using The Facility – i.e. Other Clients?
There are a couple of reasons for understanding this…
1.) Business Stability: Many service providers have faltered over the years because of a reliance on one big customer. If that client has difficulties and needs to scale back or moves their business elsewhere, your service providers business is severely impacted. Continuity of supply becomes an issue.
2.) In-house Accounts: These are accounts / businesses owned by the company or its principles. These businesses provide a base for the operation which is ongoing and the owners maintain and grow the operation in order to service them. This is generally a very BIG positive for me.
3.) Other Accounts: Some service providers use their operation as a front for illegal activities. This is extremely rare nowadays. However, there was one instance of a company (run by an Indian principle) I am aware of about five years ago which took up three floors in a premier building in Makati, the first level being genuine service provision and the other two being for illegal activities. When caught out, the genuine clients were impacted. I haven’t heard of any further cases but that’s not to say everything happening out there is squeaky clean.