Business process outsourcing

Outsourcing

The method of transferring some portion of a business process to another individual or company.

Outsourcing

In business, _____ involves the contracting out of a business process (e.g., payroll processing, claims processing) and operational, and/or non-core functions (e.g., manufacturing, facility management, call center support) to another party.

Outsourcing

came from the American Glossary, "outside resourcing," and it dates back to 1981.

American Glossary

Outsourcing came from the ______, "outside resourcing," and it dates back to 1981.

Outside resourcing

Outsourcing came from the American Glossary, "_____," and it dates back to 1981.

Outsourcing

Includes both foreign and domestic contracting.

BPO (Business Process Outsourcing)

Outsourcing Types

This covers functions like HR, finance, and customer support.

IT Outsourcing

Outsourcing Types

Includes software development & Maintenance, Data Management & Services, Network & Systems Administration,

Offshore, Nearshore, Onshore

Outsourcing Types

Reflects the geographic location of the provider

Reasons for outsourcing

to cut costs;

gain access to specialized skills;

receive scalable flexibility;

accelerate time-to-market.

Digital Outsourcing

Involves delegating digital tasks such as IT support, content moderation, social media management, or digital marketing.

Management Processes

While outsourcing can streamline operations, it demands solid process management (e.g. SLAs, performance metrics, and governance frameworks) to maintain quality.

Communication & Customer Service

Outsourced customer service must reflect the company's brand voice, empathy, and quality consistency. This requires rigorous training, oversight, and cultural alignment.

Advantages of Outsourcing to the Philippines

Significant cost savings - with agent rates 50-70% lower than U.S. equivalents.

Excellent English proficiency - and Western cultural affinity make Filipino agents effective communicators.

24/7 support - made possible through time zone differences.

types of outsourcing

BPO (Business Process Outsourcing)

IT Outsourcing

Offshore, Nearshore, Onshore

Challenges

Risk of brand voice dilution and miscommunication without proper training.

Challenges

Mismatch in quality control standards between outsourced teams and in-house expectations.

Challenges

Ongoing oversight needed —regular audits, reviews of call recordings, and feedback loops are critical.

Challenges

Risk of brand voice dilution and miscommunication without proper training.

Mismatch in quality control standards between outsourced teams and in-house expectations.

Ongoing oversight needed —regular audits, reviews of call recordings, and feedback loops are critical.

Governance & Security

Sensitive outsourced functions (e.g. IT or financial services that require strong governance: compliance checks, risk assessment, continuity plans, and board-level oversight.

Insourcing

involves bringing previously outsourced services back in-house to regain control, improve quality, or reduce dependence on third parties.

Labor

Socio-Economic & Policy Implications

-Outsourcing creates jobs in emerging economies like the Philippines, powering economic growth. However, it also causes job displacement elsewhere.

Policy and Skills

Socio-Economic & Policy Implications

-Countries must adapt through education and workforce reskilling to keep up with automation and changing labor demands.

Socio-Economic & Policy Implications

Labor - Outsourcing creates jobs in emerging economies like the Philippines, powering economic growth. However, it also causes job displacement elsewhere.

Policy and Skills - Countries must adapt through education and workforce reskilling to keep up with automation and changing labor demands.

It's outsourcing work

usually non-core tasks — so the main company can focus on its key operations.

Common BPO services

include customer service, technical support, data entry, accounting, and HR.

true

Many companies use BPO to save costs, access skilled labor, and work around the clock thanks to time zone differences.

BPO's TWO (2) MAIN CATEGORIES

1. Front-office BPO

2. Back-office BPO

Front-office BPO

These are customer-facing tasks - anything that involves directly interacting with clients or customers.

Examples:

Customer service (phone, chat, email)

Sales and telemarketing

Technical support

Back-office BPO

These are internal business operations tasks that don't directly involve talking to customers but are essential to running the company.

Examples:

Data entry and processing

Payroll and HR services

Accounting and finance

IT services and software development

true

The Philippines is one of the world's BPO leaders, especially for customer service, thanks to a skilled, English-proficient workforce and a culture that values hospitality.

Early 1990s

The Seed is Planted

1992 by Accenture

*The first contact center in the Philippines was set up in ___ by ____ (then Andersen Consulting).

2000s

The Boom Years

2000

The government created policies to attract foreign investors, including tax incentives for BPO firms.

2003

Convergys opened, kicking off a wave of big players entering the market.

true

The Philippines had a big advantage:

High English proficiency

Neutral accent

Strong customer service culture

Competitive labor costs

2010

World Leader in Voice BPO

Voice based services - call center capital of the world

The Philippines overtook India in _______ (customer service, telemarketing) - earning the title "_____."

true

2010s to Present - Diversification

• The industry became a major economic driver , employing over 1.5 million Filipinos and contributing billions of dollars to the economy each year.

true

In some Philippine cities, BPO night shifts literally shape the local economy

- restaurants, coffee shops, and transport services adapt their hours to serve night-working employees.

Takeaways

Outsourcing can deliver cost and efficiency gains, but requires robust management and oversight.

Communication quality directly affects brand reputation especially with customer-facing roles.

Strong policies, governance structures, and worker protections are essential for sustainable outsourcing strategies.

Domestic

Onshoring

Foreign

Offshoring

Nearshoring