The role of quality in IT-BPO

Michael Alan Hamlin

Posted on December 13, 2011

An article in The New York Times November 25 reporting that the Philippines was, “A New Capital of Call Centers,” caused quite a stir recently. Not because of its timeliness. The first reports by Everest Group and IBM that the Philippines had surpassed India as the world’s largest provider of call center services appeared a full year earlier. But the Times report—because it is the paper of record in the United States—resonated far more profoundly with legitimacy.

Regrettably, that resonance also helps to perpetuate a great myth about IT-BPO in the Philippines. That’s the myth that the Philippines is primarily—and always will be—a low-cost voice services provider. Just two sentences of the lengthy report provided information on the high-value, non-voice services being performed in Manila, and that brief mention was used to preface a shift in focus to India’s dominate position and threats the Philippine industry faces.

That mattered little compared to the fact that the Times had proclaimed the Philippines a global leader, and industry executives—including me—wasted no time sharing the link to the article with other executives, government officials, and their families. One industry executive told me he had received 19 emails with the link. A tier-one broadsheet thought so highly of the report that it reprinted the piece on its own front page.

No doubt the industry appreciates the visibility the Times report provided. Perpetuating the myth that the Philippines can’t and doesn’t provide the high-value, non-voice services its competitors do perhaps is a reasonable tradeoff for the opportunities the visibility the Times report provides. The tradeoff is that companies that want to outsource high-value, non-voice services won’t consider the Philippines, and Filipinos therefore won’t get to do that work.

There are other serious challenges to the Philippines’ IT-BPO industry than visibility—or lack thereof for its fastest-growing segment—however. One was tackled in the third of a series of CEO Briefings organized by the Business Processing Association of the Philippines (BPAP) and Outsource2Philippines several times every year. “Best in Class: Towards Operational Excellence” took place last week, and was attended by about 100 IT-BPO executives.

(Disclosure: BPAP is a client of my firm TeamAsia, which has been engaged to organize the briefings, and I am a founder and the president of Outsource2Philippines.)

Anyone familiar with the accolades heaped on the Philippine IT-BPO industry over the past year may be surprised that it trails every mature and most emerging competing services centers in the area of implementing quality frameworks and standards—by significant margins. A Quality Road Map commissioned by BPAP and developed by ECC International shows that the Philippines trails Brunei, China, India, Malaysia, and Vietnam in quality certifications.

That doesn’t mean that Philippine service providers don’t deliver quality, but it does mean that they don’t have third-party certification for core practices including operational, service, people, and security processes. “How,” you might reasonably ask, “can the Philippines emerge as a global outsourcing leader without demonstrating that it adheres to globally accepted best practices?” And that would be a reasonable question.

The obvious answer is that it doesn’t—or at least hasn’t—had to so far. India, China, and Vietnam primarily provide IT infrastructure and software services to their clients. These services are highly structured and process mapped, and therefore lend themselves to best practices certification. So do professional services such as accounting, health management, and legal research. The Philippines has prospered not because it adheres to best practice in customer relationship management, but because Filipinos have a unique talent for delighting customers.

Will this continue to be the case? Odds are that while Filipinos will always be better at empathizing and understanding Western clients and customers, as the IT-BPO industry continues to transition to high-value, complex services that talent won’t be enough. It will be important, but it won’t be enough to provide the same level of success the Philippines has enjoyed delivering customer service when most Filipinos are creating value.

Although trailing competing centers, the Philippine IT-BPO industry currently employs about 20 quality frameworks and standards—mostly because their customers require them to do so. Client requirements drive implementation of quality frameworks and standards all over the world, so we’re no different in that respect. What makes the Philippines different is that it is only now that the industry’s clients are getting serious about frameworks and standards.

Because of the reality that the industry is shifting from low-value, voice services to high-value, non-voice services. It’s a different game, with different rules. And to win this game, we either have to follow the rules, or remake them. Which will it be?

(Michael Alan Hamlin is the managing director of TeamAsia and a Manila-based author. His latest book is High Visibility: Transforming Your Personal and Professional Brand. Write him at mahamlin@teamasia.com and follow him on TwitterFacebook and LinkedIn. Copyright © 2011 Michael Alan Hamlin. All Rights Reserved.)

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