Business process outsourcing and globalization are made for each other

Business process outsourcing and globalization are made for each other

When one talks about business and globalization, no doubt different people will conjure up different images to relate to the discussion. Some might think of Apple phones being produced in China and used by people in Nigeria. Another might think of TCS, an Indian IT company, building software for Citibank, an American company, in Hong Kong. Someone else might be thinking of himself, a New Zealander, in a bar in Argentina, drinking San Miguel, a brand of beer that originated in the Philippines.

And all of them are valid examples of globalization and business.

Another example that someone else might visualize could be that of an insurance company in the UK which gets a claim from a customer insured by them, who then passes it onwards, or backwards, to their partner in Poland, for reviewing the claim and arriving at the appropriate amount to be paid out. Or it could be a retail chain in Canada, whose customer calls are handled by a Call Center physically located in the Philippines.

Again, all are valid examples of globalization and global business.

Business process outsourcing and globalization, in fact, increasingly appear to be joined at the hip. Business process outsourcing, or BPO, itself connotes globalization, such are the strides made by the industry in the last few decades. In fact, it is possible that the exercise discussed earlier may throw up more examples of BPO than we have listed.

Young providers like oWorkers, all of eight years of experience, are thankful to the globalization set in motion by their predecessors. It has enabled us to put our best foot forward and serve clients anywhere in the world. It has enabled us to focus on our core strength, which is data and related BPO services, making us one of the top three providers in the space.

 

Early years of BPO

But it was not always like it is today. Nothing is.

The early years of business process outsourcing could be a study in gradual, step by step growth and expansion of an industry.

The growth of the industry happened in small, bite-sized, manageable chunks. Business process outsourcing and globalization were not synonymous like they are today.

With an expanding middle class and increasing prosperity that provided growth to business franchises, they, armed with volumes, started looking for opportunities for reducing cost. Identifying business processes that could be considered non-core and which could be located elsewhere, was the starting point.

These processes were moved to locations not far away which cost less and attracted a workforce which was also available at a lower cost. The strategy kept getting bumped to the next level, step by step. From cheaper real estate in the same city to an establishment in the next state and then gradually on to somewhere far away in the countryside designed to maximize savings.

Along the way specialized companies offering BPO services came into existence providing another option to outsourcers. These providers also grew geographically along a similar path, fuelled by increasing adoption of business process outsourcing.

Access to manpower has always been a key requirement in the industry. At oWorkers, we work closely with the communities we have set up delivery units in. On account of our deep roots in the communities, oWorkers is seen as a valued employer, and provides a steady stream of job applicants. This enables us to serve client requirements in the most appropriate manner.

 

The telecom and internet revolution gave wings to business process outsourcing and globalization

And the gradual expansion continued till around the dawn of the nineties.

Business growth had continued unabated. Companies had to continuously reinvent themselves to stave off competition and stay relevant for the times. The search for value continued.

The Aladdin’s cave of opportunity opened up in front of the hungry eyes of companies looking for opportunity for saving cost, to begin with, with the telecommunications, software and internet revolution. It was the inflection point for which the industry had been preparing, preparing, preparing.

No doubt other material developments around the world contributed to the winds of change blowing in. Glasnost and Perestroika had happened and communist USSR had broken into its constituent states. China under Mao and then Deng had been set on an ambitious path towards economic growth. India broke free of the shackles of a socialist mindset through a revolutionary budget that set it on the path to a free economy.

The large pools of skilled manpower, many of them proficient in English, could be put to work for the largest corporations in the world. As many of them were American, English language skills were a useful skill in the mix. India and the Philippines became the favorite destinations for companies looking to outsource business processes and would continue to define the industry for many decades to come.

Operating out of super secure facilities with ISO certification (27001:2013 & 9001:2015), oWorkers makes all efforts to ensure your data is safe. We are also GDPR compliant.

 

The role of manufacturing

In the decades since business process outsourcing and globalization became synonymous, one could be forgiven for assuming that it has been a Services play. In other words, the developments and growth has happened around Services industries.

While that may not be untrue, the role of manufacturing in the business process outsourcing industry bears telling. In fact, as we probably all know, manufacturing is all that companies were understood to be doing over a hundred years back, whether it was manufacturing bottles, or molding iron sheets for making equipment or making furniture. Apart from agriculture of course which was another world. Not much by way of Services was offered as a business, except maybe if we include services like those provided by doctors and lawyers.

It needs to be understood that business process outsourcing is a legitimate business activity not limited to Services. It was widely used in manufacturing, and continues to be, before the Services revolution caused manufacturing to somewhat recede from the public glare.

As an example, plants for bottling soft drinks in different parts of the world, managed and operated by partner companies, could be examples of business process outsourcing and globalization.

oWorkers operates delivery centers that are equipped to operate on a 24×7 basis. This equips them to serve clients from anywhere in the world. The concept of ‘shifts’ used in manufacturing is very much alive and kicking in the Services world.

 

Going beyond simple processes

A business, once it has the bit in its teeth, will not let go easily.

Why should BPO be different?

The initial flourish of the industry was driven by non-core business processes, with reasonably high volumes that would justify the cost of setting it up and managing it.

Once that was done, it got baked into expectations as well as company Income Statements.

Outsourcers wanted to deliver more savings every year while providers wanted to increase volumes and profitability. Though seemingly on opposing ends, these objectives of outsourcers and providers came together to create opportunities for business process outsourcing beyond the low-hanging fruit which had already been plucked.

While comfort with outsourcing business processes continued to grow, the technologies supporting the industry also continued to stabilize. Internet bandwidth continued to expand, becoming capable of carrying more and more information from one place to another. In this scenario, why would business process outsourcing not expand?

At first perhaps as suggestions, and gradually as full-fledged service offerings, providers attracted a wide variety of work such as Legal Process Outsourcing, Human Resources Outsourcing, Knowledge Process Outsourcing, Recruitment Process Outsourcing and many others.

Clients were able to deliver enhanced savings year after year as the scope expanded. Providers were able to get what any business desires, greater volumes that lead to increased revenues which are the starting point for better profitability.

As client needs grow and they expand, oWorkers is able to support them regardless of where they go. This is because oWorkers has the capability to support clients in 22 languages. Moreover, we work with employees, and not contractual and freelance staff that some of our competitors do. This gives us flexibility in deployment and enables us to build a competent cadre of supervisors.

 

Creating platform solutions and integrated offerings

Has BPO been a beneficiary of advancements in technology or has it been a catalyst in the development of technology?

It is probably not an either/ or answer that is most appropriate. Both are possibly true.

Telecommunications technology and the internet did not develop for BPO. There were other drivers for their growth and development and eventual commercialization. There were probably tools that aided the BPO industry to first get a toehold and then make advances as a value creator in the world of business.

However, once having got a look-in, BPO has not looked back. It has been instrumental in creating opportunities for itself.

Its pioneering work in creating a ‘work from anywhere’ model has probably been a catalyst in the development of cloud computing solutions.

Robotic process automation, or RPA, is being widely tried and used in the BPO industry to handle tasks that are repetitive and voluminous.

Many platform solutions have emerged for services like Banking, Finance and Accounting, Recruitment Process Outsourcing that have become standalone products by themselves.

The adoption of multichannel customer contact solutions has been greatly influenced by BPOs and Contact Centers and their experience in dealing with consumers.

With a wide set of alliances with technology companies, oWorkers is in a position to access the latest technologies and platforms, and use them for client work, something clients are not in a position to do themselves. Clients get the best technology for their work from oWorkers.

 

Making the world more equal

The power of BPO to create jobs, especially in communities with low levels of education and skill, is well known. In fact, in some ways, it is the business model of BPOs, as it provides the manpower to them at a lower cost which they then train and equip to handle contracts they have taken on from clients.

Political leaders are aware of this feature of BPOs and jostle for the rights to create a conducive environment in the areas they control, in order that BPOs come and set up shop there.

What is happening?

In a high-income society, the cost of labor is high. In a low-income society, it is low. Business process outsourcing and globalization come together to smoothen out the differences between the two, to some extent.

How?

A company operating in a high-income environment could take work to a low-income environment. While it will directly benefit from lower cost of work, this move will also trigger other changes:

With work becoming scarcer in the high-income environment, wages are likely to moderate. And, with more work being available in the low-income environment, apart from getting work for less privileged communities, this will also lead to increase in wages as more work chases dwindling resources.

oWorkers sets up facilities keeping in mind availability of manpower. We pay social and local taxes for our employees and are registered as local companies. Many of them become lifelong supporters, even when they no longer work for us. As an example, we get scores of 5.6 and above (on a scale of 5) from staff, both past and present, on independent platforms like Glassdoor.

 

Conclusion

Clients of oWorkers, especially the ones from the US and Western Europe, have consistently advised substantial savings, up to 80% at times, when working with oWorkers.

There are many soft benefits that our clients get. Ramping up at short notice is one of them. oWorkers, again because of its position in local communities, can hire an additional hundred people within 48 hours. This can save clients a huge amount in terms of the bench that they would otherwise need to maintain for handling the one-offs.

Our management team has been guiding the company with sagacity and wisdom. After all, they have over 20 years of hands-on experience in the industry.

Through business process outsourcing and globalization, we have created value for technology companies and unicorn marketplaces for many years. We hope we will soon count you as one of our clients.