Not all BPOs (Offshore Providers) are Created Equal

The following is the transcript of an interview recently conducted with Wayne Bucklar from Vertical Internet Radio. The video of the interview can be watched here.

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:  Do BPO companies vary from one another?

Jamie: Yes. Anyone can call themselves a BPO. All you need to get started is an office, an internet connection and a desk. It is a mistake to think that this makes a BPO, as when you are looking to manage your risk and get it right, there is a lot more to it if you want to ensure success. 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 a corner shop. Unfortunately, there’s a low barrier to entry but that also means that quality is highly variable, and comparison is often not apples with apples.

Wayne: How does location affect BPOs?

Jamie: The big locations are Manila and Clark, and to a lesser extent Cebu.  For many of the organisations we work with, Clark is the best location, overcoming some of the logistical issues of Manila.  However, even within these two cities, all locations are not created equal. There are a range of different building qualities, locations when compared to transport hubs, and a range of other factors that impact on the ability to attract and retain staff.

Wayne: How does location play a big factor when looking for a BPO company in the Philippines?

Jamie: If you’ve been in Manila and if a lot of us have and a lot of the audience would have, Manila is a difficult city in terms of logistics. The team members that you’re going to hire 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.

You need to dig deeper and you need to have a look at that to say to yourself, “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 is not enough, we need to go to the next level.

Wayne: How does a BPO company’s recruitment model make a difference?

Jamie: I think we all know there’s places that we all prefer to work, and I know personally 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, 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. The successful BPOs have the right momentum and size, and naturally attract the right team members to work there.

We all know in our home countries there are certain employers and certain places that people want to work. We will apply to jobs at organisation’s intentionally because that’s where we want to be. So, unless you’re a larger BPO provider in the right location, you just aren’t going to get the right team members. You won’t even see those candidates. So, there is whole pool of people that are you going to miss out on.

Wayne: Do retention strategies make a difference?

Jamie: Yes, absolutely. Again, you can be lucky and attract a candidate in a lesser BPO, but then I’ll wait to see how well you retain them. 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 sauce is pretty critical. In the better BPOs, people want to be there, and will invite their friends to apply, and we all know one of the best ways to build a high performing team is through referral.

Wayne: How does the company size affect BPOs?

Jamie: There are lot of 100 to 200 sized BPOs that have made a start, but they are going to start hitting barriers in their growth.  IT support becomes a problem, HR support becomes a problem, facilities become a problem. The larger BPOs at 500 or 1000 people have worked through these teething problems. At 100 or 200, you’re taking the risk of them actually making it to the next step. You need to ask yourself the question if you want to be the client that helps them work through that evolutionary step.

Wayne: Are there BPO companies that have not become successful?

Jamie: Yes, absolutely. Many get to that 200 number, and then realise they don’t have the right infrastructure, HR, facilities, or recruitment. They don’t have the right reinvestment in systems and people, and they don’t have the cashflow to reinvest. There is a litany of smaller BPOs that have gone out of business. 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.

We’ve walked this path many times. I’ve been doing this myself now for 20 years, and optiBPO is part of optim2 which commenced business in 2008. So, we’ve been around a long time in terms of this market. We only work with strong providers that have been out there a long time. So, while it can be attractive to venture towards the smaller providers, you get what you pay for, and in the end the risk is to your business, and the cost of remediation high. I  just don’t think it’s worth it.

Wayne: What does optiBPO do for their clients?

Jamie: 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.

From there, we support the management of 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 ringing up the Philippines each day to talk through issues? We manage those issues on behalf of our clients.

We deliver BPO as a managed service, which means that clients can get on with running their businesses, while manage the risk of offshoring. We’ve been in business since 2008, and I personally worked for other large consultancies prior to that providing similar services.

Wayne: What types of activity does optiBPO outsource?

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, IT 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, and don’t do hardcore IT development.

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

Jamie: Thank you Wayne.