bpo

• In 2010, The Philippine Information Technology and Business Process Outsourcing (IT BPM) industry garnered recognition from around the world
• The UK's Nation Association determined the country #1 in business process outsourcing service in its Global Business Trends report
• The Philippine is a major player in global IT-BPM
• The global offshoring services market is seen to more than double by 2016
• The industry has the potential to bring USD25 billion in revenue, and employ 1.3 million individuals by 2016
• Offshoring and Outsourcing (O & O)


  One of the most unique developments in business and industry where firms now adopt a truly global scope with the opportunity to situate their Operations across the world
• Outsourcing first flourished


  Beginning of the second millennium
• IT processes and Operations were migrated to India as some American and European companies focused on dealing with the Y2K problem
• Reasons why companies outsource

  • Capacity Management
  • Lower Cost
  • Better Performance
  • Faster and Continuous Service Delivery
  • Part-based Activities
• What is being outsourced

  • Support or Auxiliary Services
  • IT services
• Advantage of outsourcing for employer and employee
• Advantages of outsourcing - Employee Perspective


  • "Work Abroad, Live here"
  • Professional Growth
  • Financial Independence
  • Employee Assistance
  • Enjoy your favorite food
• Disadvantages of outsourcing - Employer Perspective

  • Cost can be higher
  • Buyer does not have full control of resources doing work
• Disadvantages of outsourcing - Employee Perspective

  • Shifting schedule (possibility to work at night)
  • Dealing with irate customer
• Two types of outsourcing

  • Third-Party
  • Shared Service Center
• Strategies for outsourcing


  • Multisourcing
  • Crowdsourcing
  • Onshoring
  • Nearshoring
  • Offshoring
• What to outsource


  • Core Activities-Tasks-Processes
  • Non-Core Activities-Tasks-Processes
• What NOT to outsource are core activities, tasks and processes
• What to outsource


  • Well-defined/documented tasks, standard outputs
• Typically outsourced activities-tasks-processes


  • Business Process Outsourcing (BPO)
  • IT Outsourcing
  • Support Function/s
  • Routine activities or activities that can be automated at larger centers
  • Seasonal Requirement/s
  • Part-based Activities
• Key technologies that support outsourcing

  • Video conferencing
  • Web-based conferencing and workflow tools
• The client company is concerned with quality transition of processes and efficient operation in business functions that were once handled in-house
• The service-provider company is concerned with scope of service, performance measures, and benchmarks to ensure objective standards in assessing work quality
• The BPO contract is a unique, "tailor-fit" agreement captured in a document that resembles a performance contract
• Business process outsourcing (BPO) contract

  A formal agreement between a client and a service provider to take over a "pre-agreed portion" of the client's business operations
• Master services agreement (MSA)

  The BPO contract, with all its attachments
• Main elements of the Master Services Agreement


  • Service to be provided
  • Performance management, issues, change management
  • Country laws
• Scope of Work (SOW)


  Describes specific work to be delivered, by when, at what cost
• Core elements of the BPO contract

  • Services to be rendered or provided as documented in the Scope of Work (SOW)
  • Performance standards expected from the service provider; Service Level Agreements (SLA), and, Key Performance Indicators (KPI)
  • Timeline of the contract; start date ("go live"), and, duration
  • Costs to the client
• Master Service Agreement (MSA)


  Covering agreement that summarizes terms applicable to every job-order with the service provider
• Main Elements of MSA

  • Service to be provided
  • Performance management, issues, change management
  • Country laws
• Group (A) and (B)


  Operational elements, used day to day
• Group (C)


  Just-in-case terms
• SOW


  • Can be similar to a "job order"
  • Generally an attachment / addendum to a Master Agreement, points to covering terms
  • May state that in case of terms inconsistency, the SOW or Master Agreement supersedes
• Core Elements of BPO Contract

  • Services to be rendered or provided as documented in the Scope of Work (SOW)
  • Performance standards expected from the service provider; Service Level Agreements (SLA), and, Key Performance Indicators (KPI)
  • Timeline of the contract; start date ("go live"), and, duration
  • Costs to the client
  • Other Specific Operational Requirements
• Services to be rendered or provided as documented in the Scope of Work (SOW)


  • Out-bound sales calls
  • In-bound inquiries or subscriptions
  • Delivering food or flowers or mail
• Performance standards expected from the service provider; Service Level Agreements (SLA), and, Key Performance Indicators (KPI)


  • "Handle Time" and "Average Handle Time"
  • Sales attainment
  • Customer satisfaction rating
• Timeline of the contract

  Detailed schedule of when the transition period starts and when the service provider assumes control of the contracted processes
• Contract Duration


  Most contracts are typically multi-year contracts, however and when deemed most effective, on-demand contracts may also be put into effect
• Cost to the client

  Payment made by the client to the service provider for honoring contractual agreements