1. Business Process
Outsourcing
Winnie L. Constantino
Entrepreneurship
January 7, 2012

2. Roadmap
• Definition of Outsourcing
- Forms of outsourcing
- Models of outsourcing
• History of BPO
• Importance / Challenges of BPO to companies
• Philippine BPO Competitiveness
• Philippine BPO Drawbacks
• Conclusion

3. What is Outsourcing?
Is contracting with another company or
another person to do a particular function.
This role is considered as non-core to the
business. The outside firms that are
providing the outsourcing services are
third-party providers, or as they are more
commonly called as service providers.
Source: www.sourcingmag.com

4. What is Outsourcing?
BPO is defined by Department of Trade and Industry ….
“As the delegation
of service‐type business processes
to a third‐party service
provider”.
Source: Business Processing Association of the Phils.
BPAP

5. History of Outsourcing?
Recent Years
Companies develops strategic
partnership with third-parties
1990’s – as organizations began to
focus more on cost-saving measures,
they started to outsource those
functions necessary to run a company
but not related specifically to the core
business.
1989 – Outsourcing as business
strategy started. They outsources
those functions for which they had co
competency internally
Source:http://hsassociates.org/bpo/bpo-history.asp

6. Forms of Outsourcing
Other part of BPO is KPO – Knowledge Process Outsourcing – this
requires greater skill, knowledge, education and expertise to handle.

7. Models of Outsourcing
Offshoring Near-shoring
Outsourced business done Taking the outsourced work
in another country to a nearby country
On-shoring
Outsourcing within the
same country, domestic
outsourcing

8. OUT SOURCING
ADVANTAGES DISADVANTAGES
• Cost reduction • Poor quality control
• Concentration on core of • Decreased company loyalty
business
• Lengthy bid process
• Outside expertise
• Loss of strategic alignment
• Accommodate to changing
customer demands
• Revenue increase

9. Outsourcing is “In”
Philippine’s Advantage:
• Quality of Human
Resource
• Cost of doing business
• Infrastructure and
Utilities
• Business Environment

10. Philippines downside in BPO
• Security risks /
Political
• Investment
environment
• High cost of
electricity
Source: World Competitiveness Yearbook (2009)
Note: a) Availability of IT skills, on a scale of 0‐10 with 10 being
the highest

11. Philippines downside in BPO
Sources: a‐d) World Competitiveness
Yearbook (2009), e) Transparency
International
Notes:
a)Higher score indicates that corporations
more adequately protect data and
systems
connected to the Internet
b) Higher index score indicates the lesser
likelihood that bribery and corruption exist
c) Higher index score indicates more
transparency in government policies
d) Higher index score indicates lesser
likelihood that the bureaucracy hinders
business activity
e) Ranking in the 2009 CPI, with 1 being
the least corrupt and 180 being the most
corrupt.

12. Speech of Pres. Aquino at the 3rd Annual
International Outsourcing of the BPAP
October 12, 2011
“
….It is because of this that the European
Outsourcing Association named the
Philippines as one of three finalist
countries in the 2010 Most Preferred
BPO Country Destinations…..
you have given more than half a
million of our countrymen jobs
already where they earn a decent
salary, where they will be given the
means to provide for the needs of
their families…
Source: www.gov.ph

13. Philippines - Invest in BPO
This page is with Video taken from youtube:
Source Link: http://youtu.be/ljKYWKPgyCE

14. Philippine bags another NOA Award
Source: www.boi.gov.ph

15. Philippine overtakes India
Vikas BajajVikas Bajaj, New York Times | Nov 28, 2011,
“The Philippines, which has a population
one-tenth as big as India's, overtook India
this year, according to Jojo Uligan,
executive director of the Contact Center
Association of the Philippines”.
executives say they are worth the extra
cost because US customers find them
easier to understand than they do Indian
agents, who speak British-style English
and use unfamiliar idioms.

16. World’s Best BPO
1 IBM Global / Daksh
2 Accenture
3 Hewlett Packard
4 MphasiS
5 Ernst & Young/Capgemini
6 Wipro Spectramind
7 ICICI One Source
8 eFunds Global Outsourcing
9 Convergys
10 Affiliated Computer Systems
Source: The Black Book of Outsourcing (Brown & Wilson, Wiley Publishers)

17. Conclusion
• Recognizing what we are good at within our business and handing over those
duties that takes so much time because they are not where our passion lies or
where our expertise lies makes very good business sense.
• BPO companies should prevent the possibility of risks that outsourcing can
expose organizations to by working closely with their clients on three key
elements: confidence, motivation and transparency
• The government and BPAP (Business Processing Association of the
Philippines) should continue to support and should take substantial
efforts to promote Philippines as prime BPO destination.
• BPO is one of the key drivers for employment and economic growth.
Thus, it helps a lot of people feed their families through the vast
employment it provides to the Filipinos.

18. Insights with BPO
Real competitive advantage comes from
human talent—and that talent’s skills need
to be kept refreshed and upgraded. Many of
the world’s smartest companies are
outsourcing their learning function to
achieve this goal, and ultimately attain high
performance. Accenture Learning Business
Process Outsourcing (BPO) Services take
them beyond cost savings to the next
generation of outsourcing by generating
insights to drive business outcomes
Source: http://www.accenture.com/us-en/outsourcing/business-process-outsourcing/learning-
bpo/Pages/index.aspx?tab=2

19. Sources
Speech of Pres. Aquino at the 3rd Annual International Outsourcing of the BPAP
http://www.gov.ph/2011/10/12/speech-of-president-aquino-at-the-3rd-annual-
international-outsourcing-of-the-bpap-october-12-2011/
http://www.sourcingmag.com/content/what_is_outsourcing.asp
Board of Investments: Rising Business Confidence, annual report 2010
http://www.boi.gov.ph/pdf/publication/annual_report/Annual_Report_10.pdf
BPO Industry at a Glance, released January 2010
http://www.senate.gov.ph/publications/AG%202010-01%20
%20BPO%20Industry.pdf
http://www.pmpresearch.com/downloads/IT&BusProOutsourcing.pdf

20. Sources
http://www.outsourceronline.com/2011/11/types-of-outsourcing.html
http://www.indobase.com/bpo/bpo-benefits/benefits-at-a-glance.html
http://www.referenceforbusiness.com/small/Op-Qu/Outsourcing.html
http://hsassociates.org/bpo/bpo-history.asp
Philippine overtakes India, By Vikas Bajaj, New York Times | Nov 28, 2011
http://timesofindia.indiatimes.com/tech/news/outsourcing/BPO-biz-Philippines-
overtakes-India/articleshow/10902430.cms
http://youtu.be/ljKYWKPgyCE

21. Thank you