Industry Commentary

Driving Offshore Opportunities for Smaller Outsourcers a Good Commercial Model

By February 3, 2017September 7th, 2021No Comments

The modus operandi of any BPO vendor has long been the provision of services done at a more affordable rate than could be done in-house. However, in an age where efficiencies are paramount, outsourcers face significant pressures in driving internal savings. This challenge is especially daunting for smaller players as they seek to expand their global delivery presence. Thus, new delivery models that help emerging contact center providers realize operational savings are understandably finding more resonance than ever.

Outsourcers are under real pressure to manage overheads to ensure adequate levels of profitability. But, in today’s business environment, this is easier said than done. For instance, when dealing with human capital management, vendors are constantly facing cost increases related to the recruitment, retention and attrition of their front-line workforce. This is not to mention the ongoing training required for effective support of products and services. And what of technology? An omnipresent requirement for the latest solutions associated with security, network infrastructure and connectivity is a never-ending source of expense for vendors. Coupled with the need to find modern facilities in optimal locations, and an outsourcer can quickly find that profit margins are quickly eroded.

This issue is especially acute for small to mid-sized players that are looking to outsource/offshore for the first time, for which large economies of scale are simply not available. Such companies need ways to lower their own operating costs, if they are to remain competitive in the current marketplace. This is especially pronounced for those falling into this demographic when entering new offshore locations, in which they have limited resources and experience.

One firm that is seeking to alleviate some of these concerns for small to mid-sized service players is Satellite Office. Based in Manila and Sydney, this organization has begun providing turnkey services to emerging companies looking to establish operations in the Philippines (widely acknowledged to be one of the most in-demand markets for servicing English language consumers). However, their business model goes beyond simply providing office space; rather, Satellite Office has developed a value proposition that includes talent management, recruitment, HR, technology / connectivity provision and compliance adherence. For small to medium organizations concerned about the costs of entering a new offshore market with perhaps only a few dozen seats, accessing such services can substantially reduce their own overheads. Effectively, this business model has the potential to level the playing field for smaller BPOs wanting to enter the Philippines, which for so many with limited resources to invest, has been untenable. Whereas it has been successful for customer care type operations, results in other areas such as technology development, accounting and financial reporting and graphic design have also been encouraging.

There is no escaping the pressures of escalating overhead costs in the contact center sector, no matter whether captive or outsourced operations. However, with more interest among emerging BPOs in finding new methods by which to drive efficiencies onshore and overseas, expect more suppliers to step up with full-service offerings the likes of Satellite Office. Not only does this business model help rationalize costs, it also affords smaller vendors the chance to leverage new delivery market opportunities.