Benefits And Risks Of Outsourcing To The Philippines

Probably, the most phenomenal advancement that hit the world in the new millennium is the growth of call centres around the world. What most people miss and perhaps do not know is that call centre service is a small part of a much larger Business Process Outsourcing. And that, a lot of companies abroad choose Asia to give off their outsourcing needs. Philippines, being one of the most favoured countries that offer outsourcing solutions, has given way to the idea that outsourcing to the Philippines means lesser cost yet with high quality work output.

BPO or Business Process Outsourcing is a type of outsourcing, usually offshore, that involves the contracting of operations and responsibilities of specific business functions or processes to a third-party provider. In the contemporary context, it is primarily used to refer to the outsourcing of business processing services to an outside firm, replacing in-house services with labour from an outside firm. BPO can include the processing of payrolls. BPO is often divided into two categories: back office and front office.

Back office includes internal business functions such as billing or purchasing. It can also include human resource management, finance and accounting. On the other side, front office involves customer-related services such as call centre services and tech support.

As with any outsourcing service, outsourcing to the Philippines has its own set of advantages and disadvantages.

First, BPO in the country is not exempted from the outsourcing services that help reduce the costs. In this method, the employers can reduce the cost by having process improvements done easily; and with easy control and administration.

Second, business functions that are outsourced are considered non-core. So, having them done by third-party providers actually helps as it lets the company focus on the main purpose of the business.

Third, outsourcing business functions can also increase the companys flexibility. Because tasks are carried out of the main brain of the company, they can pretty much do some experimentation of the things that make up the foundation of the company.

On the other side of the coin, there are also disadvantages. For one, there is a risk of failing to meet service levels. This is mainly due to limited communication as it is only through the Internet. Another disadvantage of BPO affects the individual worker. Because outsourcers should adjust to the time of their contractor, it disturbs their life. Odd and unstable working hours is the main problem experienced by outsourcers. This leads to more and more problems like health issues such as sleep disorders, heart disease and eyesight problems; abusive clients, especially when it is on the technical support department; and social issues.

Risk is also a major disadvantage with Business Process Outsourcing. Outsourcing of an information system, for example, can cause security risks both from a communication and from a privacy perspective. For example, security of United Kingdom company data is more difficult to maintain when accessed or controlled in offshore places. From a knowledge perspective, a changing attitude in employees, underestimation of running costs and the major risk of losing independence, outsourcing leads to a different relationship between an organization and its contractor.

Outsourcing to the Philippines has become a trend and is constantly growing every day since a lot of companies here and abroad start to trust Filipinos to do the jobs with more quality. However, there is no assurance whether you stay long in contract with an outsource provider. As long as you make clear with what you want for them to deliver from the assigned business function, there should be no problem at all.