The Philippines is one of the hottest destination for business process outsourcing. It just places a little notch lower than the India. A lot of call centers and other business process outsourcing ventures have cropped up all over the country. More than half of the available jobs advertised in the newspapers are business process outsourcing jobs ranging from medical transcription to customer and technical support and legal services among others.
Instead of being stagnant because of the dwindling dollar, our export sector has exhibited growth due to business brought about by business process outsourcing.
My brother who is our company’s vice president for finance wanted us to join the bandwagon. He was interested in involving our business in the business process outsourcing industry specifically in the call center operations. I expressed my reluctance that we do so since this is totally unrelated to our existing line of business although I acknowledge that business process outsourcing is the next big thing in business for the decades to come. So I decided to tag along and listen to the series of meetings between our proposed partners. A would be partners had extensive experience in the call center industry and is now currently a call center development consultant.
As the meetings progressed, I learned a lot of things that dispelled my misconceptions about call centers. These are as follows:
1.) Operating a Call Center still follows the traditional business processes – Contrary to what most people believe, Operating a call center does not spell instant big bucks in a short period of time. Just because the demand in the market is so big and because you are earning dollars does not necessarily follow instant profits.
According to the study presented to us, it is only in the second year that the call center starts to profit. In the first year, losses or a break even has to be incurred first. This is similar to any kind of business. You can’t expect to profit immediately. There is a window of time where sacrifices have to be made. Just like any traditional business you have to have a good management team. A lot of small time call center operations have been shutdown due to bad management. Most importantly your Human resource has to be very good as this is one of the most important departments of the call center operations.
Putting up a call center is just like putting up any other business. You will have to follow traditional business processes and rules. It’s just that a call center is more sophisticated since it involves international factors and hi-tech equipment. But the principles in handling the people, processes and profits are very much the same with traditional businesses.
2.) Operating a Call center requires intensive Capitalization – Most people believe that putting up a call center requires very much little capitalization. After all you just rent a small space, put up a bunch of computers hook it up to internet connection and viola !!! You can now begin operating right ? Wrong !!! Operating a call center requires intensive capitalization. The dialing software alone cost more than a million pesos. Add to that the computers, plus you have to get licensed copies of Windows XP. You have to set up a server, a good stable and fast internet connection, hook up the wires, buy i.p telephones that call center agents will use.
We are not talking here about setting up an internet café. During the early phase of the operation you have to shoulder to salaries of your people first as it takes time for your clients to process your bill. And the salaries of those in the call center industry are not cheap. The lowest you can give call center agents is P 10,000.00 otherwise they will transfer to another call center. So it is not as easy as it thinks.
3.) Call center operations requires intensive marketing – Some people think that because there is so much demand for call centers they can just build a call center and expect clients to come. This kind of thinking is very erroneous. Clients are not just looking for “call centers” per se. They are looking for reputable call centers. Call centers that can deliver services that their clients wants them to deliver. As a new player, you will have to establish yourself as somebody who is reputable. This requires that you present to them that you have sufficient equipment, the proper kind of people and more importantly the proper kind of management team. This requires that you market yourself intensively.
Big players in the industry have no problem with that. Clients immediately sign up to them because the have already established a name. But what about small players ? They usually only get the outbound. (Outbound refers to call center agents calling persons abroad trying to sell something or offering a service while inbound refers to catering to the needs of already existing clients of big companies who are outsourcing their services) There is money to be made in outbound but the problem is most outbound agreements are usually performance basis. So if your agents are good at selling or convincing people to buy your client’s products or services than you make money. If not, then you loose. It may take some time for small players to establish themselves as reputable and trustworthy with the outbound before clients entrust them with the inbound.
Again this is not an easy thing. Operating a call center requires intensive marketing just like any traditional business. I even know of someone who has built a call center expecting clients to just pour in, until now their call center is a white elephant and it has been there for more than 2 years.
With all these in mind, before you jump into the bandwagon of the business process outsourcing industry especially call center operations, think before you leap !