Flattening & Topography

Leafing through my new favorite local business intelligence tool, BusinessWorld, I ran across a review of the book Redefining Global Strategy. Although I've not read it (yet), I am intrigued by Eddie Evans' review wherein he contrasts the work of Pankaj Ghemawaht, with that of Thomas Friedman, the author of The World is Flat. The reasons for my interest should be somewhat self-evident: as a self-professed expert on certain things indigenous to the Philippines, I believe that the difference in locale matters in a deep and abiding way.


Moreover this position interests me since the nuances of location and all that it implies can compound themselves adding up to differences that, in sum, are significant. This year will necessitate greater efficiencies than ever as a variety of factors conspire to complicate what used to be a simple labor arbitrage a scant eighteen months ago. The dollar's increasing weakness, energy costs, familiarity with the outsourcing model, and talent sourcing challenges all conspire to force organizations to become more efficient to protect their margins.

The World is Flat

I've seen mistakes that cost time and money as they made assumptions that made entrée into the Philippines more arduous than necessary. Indeed, I'm guilty of a few of them myself. These typically fall into two major buckets:

• Underestimating the local business environment or, more accurately, assuming that prior knowledge in one geography/culture/industry translates with algebraic ease to the Philippines.
• Managing people using the same techniques and cultural biases prevalent in their original business location. In most cases, it translates into forcing "Western" biases onto local talent who have a very complex world-view that emanates from a unique history.

We intend shed some light on these matters for those that are looking for some insight on activities that require engaging personnel for service delivery. As an organization that traces its own development to the second wave of BPO growth here, we focus most intently on sourcing, managing and educating people who are remote knowledge workers.

Call Center Listing

A list of Philippines call centers posted here looks a bit thin to me, but it's a start. Feel free to post your updates — perhaps among all the listings of local centers, we can take a run at a comprehensive and current version:

24Care Inc.
3i Q2 HR Solutions
Accenture Call Center Solutions
Acquisix
ACS (Affiliated Computer Services, Inc.)
Advanced Contact Solutions
Alorica Philippines
Ambergris Solutions
AOL Member Services
APAC Customer Services, Inc.
AscendAsia
AskMeNow
Branders.com
CallBox
Cinnovation
ClientLogic
Convergys
Cyber City Teleservices
Dell International Services
Dynatec
ElectraServ
ePacific Global
ePerformax
Epixtar International Contact Center Group, Inc
ePLDT Ventus
eTelecare Global Solutions
Global Sky
GlobalStride
HSBC EDP
IBM Daksh
ICT Group
Infonxx
InteliRisk Management Corp.
iTouchPoint
Link2Support
Logicall
Mindbox Solutions
NCO Group
Orchid CyberTech
OSRP PC Mall
PacificHub
Parlance Systems
PeopleSupport
Pilipinas Teleserv
Pivotale
Siemens Business Services
Sitel
Source1 HTMT
SUPREMNET Solutions
Sutherland Global
SVI Connect
Sykes
TeleConnect
TeleDevelopment
TelePerformance
Teletech
Touch Asia
TRG
Vision-X (VXI)a
Vocativ Systems, Inc.
West Corporation
WinSource Solutions

Desitination English

According to an article I recently read on The Philippines Travel Blog, Koreans — as most Asians — favor the Philippines as a destination for English language instruction. The author cites our Tourism Secretary, Jospeph "Ace" Durano, telling a group of Korean academics that "the Philippines is one of the leading education destinations in Asia, particularly in learning the English language."
This confirms my anecdotal observation that English language is a big business in other areas outside of the BPO domain — I see applicants to Epixtar's education department that come from English schools all the time. These applicants (and we have a few on staff) are both fluent speakers and accomplished instructors of the language.
It's great to see this kind of information getting a little airplay instead of the constant dire predictions of dwindling English skills and a lack of available talent.

A Brief History of BPO in the Philippines

A brief overview we developed for a Brand A client engagement:
Business Process Outsourcing started (meaningfully) in the Philippines with Accenture in 1992 thanks to Frank Holz, the Partner responsible for developing and marketing the first Global Resource Center in Manila. Currently its main facility (one of eight) is located at the Robinson’s Cybergate 2 Tower in Mandaluyong City, the facility houses around 5,000 seats of a total of 10,000 seats currently in the country.
With 15 years of operations, Acccenture expects to have a total of around 15,000 Philippines employees by the end of its current fiscal year in August. The majority of these are IT professionals performing system design and software application development, as well as application management and maintenance. The Company has recently built out a teleservices group to support clients with voice requirements.
SPI, recently acquired by ePLDT, entered the picture in 1983 founded by New Zealand expatriate Alan Fraser. The Company confined its activities to simple data entry work until 1997, when the new CEO Ernest Cu started making acquisitions and increasing SPi’s service portfolio. Cu is by far and away the sharpest operator on the Philippines BPO scene.
The firm provides Content Editorial and Production; Content Coding, Abstracting and Indexing, and Electronic Data Discovery; Content Transcription; and Transaction Processing for the Healthcare, Legal, Publishing and Transaction markets. SPi’s software development is dedicated to creating common platforms for its other practices.
Acquired in July 2006 for $158.8 million by the call center unit of the Philippines PTT, PLDT, the combined subsidiary placed ePLDT Ventus at the forefront of the local BPO game with 11,000 employees distributed across 26 locations in North America, Europe, and Asia.
The Company formerly had a stake in one of the early call center players, eTelecare Global Solutions, which it subsequently divested itself from in April 2004 as a publicly listed company (with SPI holding a majority share). eTelecare was founded in November 1999 by Jim Franke and Derek Holley, two McKinsey alumni of its call center practice. Currently the Ayala Corp owns 11% of eTelecare. Ayala is the considered the first conglomerate in the Philippines and controls Ayala Land Corp, Globe Telecom, Bank of the Philippines Islands, Manila Water and Integrated Microelectronics Inc. Ayala and its subsidiaries account for a third of the Philippine Stock Exchange’s Index.
eTelecare launched its first program in Q3 2000, and currently focuses on complex transactions for American Express, AOL, Cingular Wireless, Dell, Intuit, Sprint Nextel Corporation and Vonage delivered from four delivery centers in the Philippines and seven in the United States, with approximately 9,800 employees.
With revenue of $195.1 million and operating margin of 9.9% eTelecare is considered one of the founding call centers in the Philippines and its vice president and general manager Benedict Hernandez is widely respected and credited with the firm’s operational success. Hernandez is also on the Board of the Contact Center Association of the Philippines (CCAP) and has been an articulate advocate of BPO growth in the RP.
In 1995, President Fidel Ramos signed legislation creating the Philippine Economic Zone Authority to promote “the establishment of world class, environment friendly economic zones (ecozones) all over the country to respond to demands for ready-to-occupy locations for foreign investments.”
At the heart of the legislation lies fiscal and non-fiscal incentives to developers of economic zones, export producers, and I.T. service exporters. The focus is on developing “ready-to-occupy locations to foreign investors who are export producers or IT service exporters in world class and environment friendly Economic Zones and I.T. Parks / Buildings. “
SYKES entered the Philippines two years before eTelecare, in 1997, and is considered the first multinational BPO player to enter the Philippines. SYKES’ entrance was the result of its acquisition of 19 seats from McQueen LTD. Prior to acquisition, McQueen was headquartered in Galashiels, Scotland focusing on inbound call centre support, software fulfillment and customer service application and foreign language translation and localization.
Another early mover was PeopleSupport, co-founded in 1998 by David Nash and Lance Rosenzweig. The model was very similar to 24/7 Customer’s — email and chat support for dot-com clients. After struggling from their Los Angeles outsourcing center PeopleSupport, in 2000 and 2001, restructured its business by relocating outsourcing operations first to St. Louis, Missouri and then to the Philippines. Subsequently the company closed operations in St. Louis and completed the migration of operations to the Philippines. and closed their facility in St. Louis. Essentially the move to the Philippines not only rescued the Company, but invigorated them into a significant “local” player with eight outsourcing facilities and, roughly 8,400 personnel in the Philippines, 400 people in Costa Rica and over 150 in the U.S.
At the outset of operations in the Philippines, PeopleSupport employed 40 employees. This move was executed at the behest of Rainerio (“Bong”) Borja President of PeopleSupport Philippines and Vice President of Global Operations since May 2000. Bong is widely regarded as the most articulate and consistent voice of the Philippines BPO industry and the architect of much of the industry’s growth.

Teledevelopment Training Conference

Last week I was privileged to speak at my friend Jon Kaplan's Call Center Training Conference hosted by his company, Teledevelopment Services. Obviously the topic of conversation was Training and how to do it more effectively and more economically. Talking about how BPO people learn seems to be the trend of late.

No wonder: Discourse on the lack of qualified candidates for BPO positions is considerable (with justification). Mushrooming call center academies and English training centers have recently created an industry paralleling the BPO scene.There is even an English-is-Cool initiative in a bid to attract hipsters and tastemakers archipelago-wide. Growth has created a real sense of urgency amongst recruiting staffs and industry pundits.

Urgency is just what the industry needs. That and with thoughtful ways to deal with the challenges that stand before us. These challenges pale compared to those faced during the early days of the industry when, for example, eTelecare secured an exemption to Article 130 of the Labor Code of the Philippines to allow women to work at night.

One way to address these obstacles is effective communication within the industry. Group-think about how we can cohesively build upon government initiatives like TESDA's recent scholarship program to provide subsidies for prospective BPO employees that require additional education to qualify for entry-level positions in the industry.

I think Jon neatly summarized this during the closing remarks for the speakers of the Philippines' first BPO training conference after-party. The notion that professionals can put aside competitive differences and openly address common concerns of learning engagement and organizational management is truly gratifying. His observations — how cooperation transpires within a group of competitors so tightly concentrated — speak well on the relative harmony of the Philippines BPO industry.

Philippines 2.0

Lately I've been thinking about Social Networks, Web 2.0, and all that stuff. One of Wikipedia's (many) entries on the topic describes the phenomenon as "... embracing an approach to generating and distributing Web content itself, characterized by open communication, decentralization of authority, freedom to share and re-use, and 'the market as a conversation." Indeed the trend seems to be shaping up into something of a bubble in itself with the profusion of redundant and/or pointless 2.0 networking sites clogging our mailboxes with invitations from people who we don't know.

Why am I interested in this well-trod topic? Because I'm keen to use some of these tools in the interest of attracting and educating call center agents — I'm a big advocate of self-service solutions as the talent market becomes increasingly competitive. Moreover, I believe there are contextual factors that make Web 2.0 a part of life in the Philippines like few places in the world — of the top fifteen popular sites in the Philippines as rated by Alexa. Eight of those site fall under the Web 2.0 moniker.

Social networks, cyber or not, are a fundamental part of life here as anyone who spent time in country will attest. In an excellent survey, A Short History of South East Asia, edited by Peter Church and published under the auspices of the Asean Focus Group; an anonymous Filipino business man is quoted observing, "We have no institutional loyalty, only personal loyalty." In the context of the Philippines this bias toward personal relationships is extended to encompass online relationships.

Like the Philippines' "natural" language advantage in call center services and BPO delivery, the capability to deliver content within what is becoming understood as the Web 2.0 is of significant interest to potential BPO operations in the web marketing arena. From another angle, there is a great deal to be gained by developing social networks in the pervasive recruiting project. A blog that comments on the life of an agent just starting out, for example, might be a great way to simultaneously elaborate upon and personalize the experience of the people coming to work at our call center. Perhaps a networking site that lets agents network their friends into position for evaluation and screening would be worthwhile since staff referrals provide the balance of quality agents for any center.

More broadly, this trend opens up opportunities for enterprising types (read BPOpreneurs) to develop services and support functions riding existing 2.0 services or using the underlying tools such as Ruby on Rails. If the world has moved to a relentlessly networked world of interactions fostered through shared interest, nationality, desire, or profession; then those that can fluently navigate (as a majority in the Philippines can) these spaces are the site of new services like high-trust marketing through blogging and social seeding much as many organizations are using YouTube to accomplish.