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Editor's Notes

1. IntroductionEverything is a process – or a part of a process. Your presence here is a result of a working process – air transportation, hotel booking, conference registration, food preparation. The mere fact that you are sitting in this room right now means a very effective process is in place – digestion process. Whatever learn during this conference is also a result of a process – absorption process.So if process is very much a part of our daily lives, why are so many of us taking it for granted – especially in our businesses?Executive Summary Offshore outsourcing is here to stay. But while it promises to be a very lucrative long term service business, so many companies can only tell stories of how their outsourcing programs have failed to live up to their expectations. Add to this the number of startup BPO service providers that went out of business in a year’s time, failing to capitalize on and realize the promise of outsourcing. The BPO industry is not just for the ‘big boys’ and should actually be more profitable for the Small/Medium BPOs (SMBs). However, the recent rise for the demand on best practices and standardized operations have kept the SMBs in the cellar, mainly because they don’t have the resources to implement standards-based processes implemented by their bigger competitors – Six Sigma, ISO, CMMI, etc.However, if you are an SMB, do you really need to acquire certifications for your operations standards? If you have the money and people to do it, you should! Else, you will simply have to be adaptive – get the best practices and dovetail this to fit your company’s business model and service delivery.
2. Case In Point:In its survey, the Aberdeen Group reported that: Nearly 50% of outsourced projects fail outright, or fail to meet expectations76% of companies said that vendor management effort and costs were much higher than expected30% reported ongoing issues with outsourcer management processes (e.g., inadequate governance and conflict resolution procedures)51% reported that outsourcer was not performing to expectations Why is this so? One of the reasons is that because either or both client and service provider think outsourcing is easy, especially in the SME space. They failed to realize that once the gears are engaged, they need more than a simple contract to keep the outsourcing deal working seamlessly. They took for granted the need of ensuring that efficient processes are in place prior to getting the engagement into live operations. They failed to factor in the need to have effective processes in place even before contract negotiations. This failure is common among Small and Medium BPO Service Providers, especially those that are operating on the countryside.Key Points:In this session, we will discuss about the key role that processes plays in your outsourcing service delivery, any why it is important for you as a Small or Medium-sized BPO service provider to ensure that processes are in place if you intend to be competitive in the industry.We will discuss the following Key Points quickly:Most Outsourcing Engagements Fail – let’s look at the some of the factors whyThe Importance of Processes – how it will benefit you and why you should give it more value in your companyBecoming Process-Aware – how to kick the “ad-hoc” mentality out of your door and make your company “process-aware” 
3. I. (WHY) MOST OUTSOURCING ENGAGEMENTS FAIL In some outsourcing engagements, both parties seem to be moving forward blindly! They don’t really share the same vision and look at the same page!1. Lack of clear/repeatable business model and client acquisition process Effect of following the herdJust because other guys were successful in their BPO business does not necessarily mean you will tooDo you know what your core business is and what your company’s core competencies are? Are you into Development or Project Management or Human Resource Management?  Example: I receive a lot of emails from small outsourcing companies in India asking us to send them some work. In the email these companies promote themselves to be having the capability to do anything that can be outsourced – the typical “we can do that too” tact. 2. Lack of clear understanding of client’s requirements Generalization is very dangerous in the outsourcing engagementEven clients sometimes don’t know what they really need 3. Lack of clarity in service agreement What are the key deliverables?How will the project be managed?How will change be managed?What will be billable and non-billable? Once the outsourcing wheel starts, the “scope creep” also sets in, expanding project requirements with the costs mostly absorbed by the service provider.What are the expectations in terms of service quality? Is there a mutually accepted quality management in place?How will documentation be done?How will attrition (employee turn-over – hiring/firing/promotion) be handled?How will the project be closed?
4. 4. Lack of sustainable service delivery process(es) Is there a clear understanding by the service provider of the client’s business process?Is the service delivery process clearly defined?How will the services be measured? 5. Lack of flexibility of service delivery and engagement process Engagement and service process should be adaptive and unique for each clientNot all processes are reusable as each client’s business process is uniqueProject implementation must be agile6. Cultural differencesJust because you are effective in dealing with the Americans does not mean you can be effective in dealing with the Canadians, the Australians, the British and the Kiwis! Have you ever tried to put together in a bar one citizen from each of these countries? These guys don’t like each other! Their English are even not the same. I know, my Australian client does not even want us to use the American dictionary for their Wiki!Then add to that the culture of the service provider – you and your people!
5. II. THE IMPORTANCE OF (WORLD-CLASS) PROCESSES (IN THE OUTSOURCING ENGAGEMENT)  1. It sets you apart from your competition Clients prefer only to work with those who know what they are doingA well-implemented process assures your client of operational stability 2. It makes you a vital part of the client’s business It helps build and strengthen working business relationshipsAt a minimum, it takes at least one year for the OSP to fully integrate into the client’s business processOver time, your team achieves what is commonly called the “institutional memory”It allows the client to focus on their expansion assured that a partner is able to support their growth. 3. It ensures long-term engagement The client will think twice about giving the project to someone else.Have you ever tried firing a client? I did. We were having some collection issues so instead of charging the client penalties, I simply offered to pre-terminate the SA - and they simply do not want to go away easily. I even asked the client to take the entire team with him, yet they offered to stay! Our collection is now on schedule after that. The client knows about the pain they will have to go through if they decide to work with another service provider again.It makes “institutional memory” work on your favor
6. 4. It drives the quality of your service deliveryA good process ties everything together!
7. 5. Gives you more time to yourself and relax!Note: the guy in photo is my client from Canada. I cannot mention his name as I did not ask permission to use it for this presentation (just grabbed the photo from his FB album!).Question: When was the last time you went out with your family to the beach?The BPO industry is a 24x7 operation and requires 24x7 attention. If you don’t have the right process and people in place, you will turn into a zombie.You need to be able to get the right amount of sleep, sun and sand if you should grow your business. Don’t work yourself to death!We have instituted processes in the company and are blessed with great people that even though our center operates 24x7, I can now afford to work regularly from 9am-5pm, Monday-Friday only. I seldom open my PC in the evening anymore. I reserve that time for my family. YOU CANNOT OUTSOURCE QUALITY TIME WITH YOUR FAMILY!When you really come down to it, as an entrepreneur, the main reason you want processes to be in place is so you can spend more time with your family (yes, my friend above was with his wife, his wife took the photo!). You can be a successful businessman but up to what extent? If your wife left you or your children comes next only to your business, you have failed as a businessman!“ADP, and the US Senate won’t be on my tombstone. My kids' names all will be.” US Senator and Former CEO of ADPQuestion: Are you still able to sleep an average of 8 hours each night? If not, then you maybe you have a process issue. You can’t switch off at night because you are wary that something wrong will happen anytime and you don’t know how to respond.
8. III. BECOMING (A) PROCESS-AWARE (ORGANIZATION)1. Clearly define your business model and focus on your core competencies Learn to say “No” to other things which are not in your ‘zone’You cannot be everything to everyone so don’t try to do everything for your client (don’t go over your head) “Learn to say no to 1,000 things and focus on the main thing” – Steve Jobs Also, decide which best practice or standard to use as your baseline – ISO 9001 or Six Sigma? Both can be expensive but can provide guidelines and principles you can use. Use principles only, not templates. 2. Prepare well-documented processes ((it is different from your Business Plan;Are you able to discuss with a client over coffee your operations process without the aid of Powerpoint?Do you know which form in your company corresponds to what?When someone leaves, does it affect your operation or are you able to put one in right away into the business?3. Your overall process should be iterativeLao Tzu one said: “Gentle and yielding is the principle of life. Thus an Army that is not flexible will not win any battle.” You should be able to adopt your processes to your client’s business. This the only way you can optimize the client’s business as well.
9. Service Delivery Process Top View: EngagementClient AcquisitionService EngagementTransitionProject SetupTalent Acquisition and PreparationProject DocumentationImplementationProject ManagementTalent ManagementQuality ManagementImprovementChange ManagementProject Closure Anywhere in between those key processes as what we call sub-processes. That’s where we iterate to meet the client’s requirements.It is important to make your process as proprietary as possible – do not “Copy+Paste”! It should be unique to your own business!
10. Client-Specific Service Delivery Process Sampler (Outbound): 
11. Client-Specific Service Delivery Process Sampler (Inbound): 
12. 4. If you cannot be the Process Specialist, hire/assign oneIf it’s your business, its your process. But let’s face it, not all business owners are process-savvy. You will need someone to handle it for you so will not be bugged down by the details. 5. Regularly review /revise processes (see also Iterate) Do not allow trends or changes in client touch points (i.e. social media) to impact your processes, use these instead to enhance them.Processes needs re-alignment as client’s business needs also change due to growth or expansion 6. Make processes and agility a part of the corporate culture Some employees “freeze” when confronted with a highly likely change to existing processEmployees must be able to transition well from the old process to new processAnd this is where you should also hit the balance between process and people. You should not make your process so rigid that you overlook the welfare of your people. Processes are made for people, and are executed by people. At the end of the day, your people are ones talking to your client. If they are not happy or taken care, don’t expect to grow your business.Process can only take your business to a certain level, use it to maximize the potential of your people!
13. Copyright 2012 Xavier Eric B. Manalastas, Next BPO Solutions, Inc. This document is prepared for its intended audience only. No part of this document may be reproduced/distributed without express permission from the owner.