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September 01, 2020

Call Center Philippines: Outsourcing Pitfalls

We all know and understand that the catalyst behind outsourcing starts with cost savings, but going too far in the name of savings is bad for business. Value is found at the crossroads of cost savings and quality. This is true when it comes to call center outsourcing to the Philippines, and they should lead every decision in this process for executives. 

There is an inherent risk at the beginning of any business relationship, but it’s important to note that more than half of all offshore call center outsourcing projects fail. This means that selecting the right call center outsourcing partner in the Philippines is crucial for long-term success. 

“First-time outsourcers often make the mistake that they select a call center outsourcing provider in the Philippines based on the hourly rate. And that’s almost always a recipe for disaster,” says Ralf Ellspermann, CEO of PITON-Global in Manila.

Outsourcing is intended to save businesses’ money and to make day-to-day operations easier. That said, finding the right partner organization for your business is a process that you should take seriously and put the legwork into.

Going offshore already saves you 50% vs standard US call center outsourcing rates, but sacrificing quality for an additional 20% in savings is juice that’s not worth the squeeze. 

“Companies should target cost savings of 50 percent when compared to standard onshore vendor rates. A 50 percent lower cost is not only realistic, but also provides the call center outsourcing provider in the Philippines with enough money on the table to make the necessary investments in best people, processes, technologies and state-of-the-art facilities, which are needed to make programs work. A vendor that charges US$8 per hour can’t compete with a company that charges US$12, unless they are located in the provincial areas of the Philippines, which comes with another set of challenges. The low-cost outsourcing provider is forced to make significant compromises on not just one, but all levels,” says Ellspermann.

The Philippines is home to one of the most robust and successful call center outsourcing industries in the world. While the aggregate of the industry makes for the best around the globe, not all companies in the outsourcing universe are created equal.

The contact center outsourcing industry is a specialized industry, but it’s not different from any business partnership. For it to work over a long period of time, there has to be a win-win arrangement. Both sides need to have their needs met in the short and long terms.

“For the outsourcing partnership to work, it has to be based on a win-win proposition. Only then, it stands a chance of succeeding. And that’s ultimately what both parties want,” says Ellspermann.

You may be asking yourself, what makes the difference between a good and bad call center partner? Let's start by looking at language proficiency. When you look at the ability to communicate in English as a whole, yes, the Filipino workforce has an edge. However, the variance from individual to individual can and does differ greatly. Speaking a language is one thing, but being able to understand and comprehend language is an additional skill set and is equally important. A call center is built on the strength of its ability to communicate - and your business depends on it. 

“Almost all Filipinos in the country speak English. But make no mistake, not all are highly proficient in the language. And that also counts for the agents in call centers. The English language proficiency can range from A+ to F, and anything in between. In order to be able to hire and retain the best agents, you have to pay them well. An agent with impeccable English and 3 to 5 years of work experience can easily earn between US$3.5-US$5 per hour with a globally leading outsourcing provider, or a captive operator. And a highly qualified and experienced agent won’t work for a company that can’t afford to pay them anywhere near that rate,” says Ellspermann.

All of this is to say that the quality of the communication skills of your agent is of the highest importance, and not all are created equal. Call centers that are promising up to 70 percent cost savings come with a completely different price. That price is the cost of doing business with a subpar partner that can’t afford to hire premium resources that are needed to make programs work. Next, you are looking for a partner that will help you improve your operating efficiencies. A successful outsourcing partnership depends on teaming up with a call center that has a time-tested structured approach. Experience is one of the most important ingredients for quality no matter what business you are in, and that certainly extends to the world of offshore call centers in the Philippines.

“A contact center that invests in cutting-edge technologies is able to increase operating efficiencies by up to 20 percent. And with improved operating efficiencies, you need fewer agents on the program. Take AI for instance, it allows the agent to get the info that is needed to service a customer request in real-time. This not only speeds up the average call handling time (AHT),  but also prevents the agent from making avoidable mistakes. AI guides the agent and can even detect the sentiment of the customer. If used correctly, it can enhance the customer experience, which translates to higher net promoter and customer satisfaction scores. And that’s ultimately what you want,” Ellspermann explains.

The overarching theme here is that you are looking to save operational costs for your business. You have to be careful that you don't go so far that you end up harming your business with a cheap outsourcing provider that doesn’t deliver the quality service that you are looking for. The big point here is, you are already saving money, so don’t take it too far and go too cheap. 

In business, it is best not to look at decisions in terms of upfront costs but in terms of return on investment (ROI). This line of thinking also applies to call center outsourcing. Again,  offshoring to the Philippines will already save you money, but it is premium vendors like PITON-Global that are actually capable of delivering a measurable and consistent ROI. 

No two call centers in the Philippines are the same, but here are a few best practices to remember on your journey: value quality, value strong linguistic skills, value cutting-edge technology, and value experience. Companies like PITON-Global are the holy grail, as they can provide both quality and cost savings that will help you enhance the customer experience, save on operational costs, and grow your business and bottom line. 

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