[Ask TBM] What Aspiring BPO Owners Should Keep in Mind

The business process outsourcing (BPO) industry is one of the fastest-growing industries in the country. The owner of Coefficients reveals how you can use this to your advantage.

The business process outsourcing (BPO) industry is one of the most lucrative industries in the country— bringing in $29.1 billion in revenue (approximately PHP 1.60 trillion) in the first half of 2022 alone! Given this, it’s no surprise that many aspiring business owners have set their sights on the industry, whether to use its services or start their business in that field.

Defined as “the delegation of one or more IT-intensive business processes to an external provider that, in turn, owns, administrates and manages the selected processes based on defined and measurable performance metrics,” BPO—by its very name—is often outsourced by companies. What’s more, BPO offerings come in two major categories: horizontal offerings, which can be leveraged across specific industries, and vertical-specific offerings, or vertical process knowledge which applies to a specific industry.

Simply put, a BPO is a business practice, wherein a company gets the services of an external service provider to perform essential business functions or tasks for them. These include call centers, payroll, accounting, and other administrative tasks.

However, starting a business in the BPO industry can be tricky, especially if you’re unfamiliar with how it works. To help out those who are interested in exploring business opportunities in BPO, we asked the owner of Coefficients, Mary Rose Cadiente, for tips and advice.

Prior to becoming a BPO owner, you spent many years working in the industry first. What did your experience working for different BPOs teach you about running a business?

Throughout my experience working for a variety of BPOs, I’ve learned four main takeaways that are particularly relevant to running my own business:

1. Foresight

This skill sets a business owner apart from an employee. As the industry trains people to ensure the seamless operation of the business from our end of the world around the clock, working for the BPO industry [has] made me develop the skill of approaching problems with an entrepreneur’s mindset and taking ownership of whatever task is given to me.

2. Problem-Solving

A major focus of business process outsourcing is the resolution of issues. The BPO profession was a great fit for me since it allows me to put my problem-solving skills to use while helping clients concentrate on what is really important to themwhich is their business’ goal.

3. Find Ways to Get Around My Weak Points

The difficulties we face individually do not, however, have to define us. We can always build a system that would make sure that you don’t cave into your weakness. My experience working for several BPOs has taught me that despite the difficulties posed by geographic and cultural barriers, we can overcome them with the use of technological solutions.

4. Take Risks and Adopt a Growth Mentality

I learned the value of having a growth mentality. From my perspective as a leader, the key was resisting the urge to prove oneself right at all times. The ego is a powerful motivator, but one must be prepared to set it aside in order to make room for development.

What did you have to invest in to get your BDO business started?

Given our limited capabilities when we were starting out, our strategy [back] then was to start small and hire more people as we gained clients. So we invested in desktops, software, cloud-based tools, and other equipment as needed and we make sure that we are getting the most cost-efficient ones that are right for our needs.

What challenges or struggles did you encounter when you were starting out, particularly with clients? How did you overcome them?

As we built our relationship with our clients, I realized that eventually, they wanted higher levels of service at cheaper costs. So we make it a point to always look for novel ways to distinguish our services from those of our competitors. [We] created the best support models for newly developing, high-growth markets as a result of increased competition and shrinking profit margins. We needed to constantly expand our offering by enhancing our team’s capabilities. 

We [would] look for solutions that would allow us to broaden our service offerings, provide more value to our clients, and still allow them to maintain their profit margin in order to capture a larger portion of the market. 

For example, if there’s a client who would need to hire for a role with very specific skill sets but they are considering some budget constraints, what we do is whenever possible, we cross-train our existing staff, hire more people to fill in the most basic tasks for that client, and eventually cross-train them, too. 

It’s a win-win for both Coefficients and our clients because we get to resolve their manpower requirement while increasing business opportunities for [the company]. On the part of our employees, it’s also beneficial for them because it increases their marketability, which paves way for their career development.

How about the challenges you faced as a business owner?

The second challenge, as with any other BPO company, is employee turnover, most especially during the early stages of the company. Factors were multifactorial—there are the socio-economic and business factors, geography, and even differences in culture

Along the way, it’s inevitable for employees to seek more privileges and benefits. Some would not be fit to work longer hours and erratic shifts. We also have the so-called maturity turnover factor, wherein once the employees have been trained by the company, they then realize the increase in their marketability and that they can offer their services to a competitor and so they start demanding a higher wage. 

Not seeing any career growth is also another factor. And of course, the stress from work and [having] no work-life balance. 

We tried to address all these issues to improve our employee retention capabilities by developing proactive strategies, such as:

  • Creating a flexible working environment for some of them
  • Providing them opportunities for career growth like exposing or assigning them to other projects other than the ones that they currently handle
  • Developing individual roadmaps for their career development.
  • Giving them progressive and competitive basic benefits and salaries

Actually, one of the highlights of our retention strategy program is that we provide our employees with a VUL plan (or a type of permanent life insurance policy that allows for the cash component to be invested to produce greater returns). Employees who have reached a 5-year tenure with the company qualify for the said program. So it’s a combination of life insurance, critical illness benefits, and mutual funds.

What concrete tips and advice can you give to those who are planning to start a business in the BPO industry?

1. For the most part, I take life’s detours—and the inevitable rejections they bring—as God’s way of pointing me down a more beautiful path.

Learn to profit from both good and bad times by keeping an optimistic outlook and making the most of opportunities as they arise. More than our successes, it is our failures that educate us. By reflecting on our failures, we gain insight into our own weaknesses and develop compassion for those who are also experiencing difficulties.

2. Management is based on what can be measured

In the BPO sector, where performance is all about [key performance indicators or] KPIs, companies tend to put their money only into things whose return on investment can be easily calculated. Human relationships and emotions are intangible and [are] therefore, difficult to quantify.

As a leader, sometimes you have to trust your instincts and realize that the reward for making people happy is so great that it can’t be measured.

3. Have a combination of fierce determination while maintaining humility when leading.

Put your drive toward a goal that has greater significance than your own success. Give other people the spotlight rather than basking in it yourself.

Mary Rose Cadiente is the owner of Coefficients—a BPO company that is known for providing inbound and outbound voice-based services, web-based and email-based services, back-office services, website design and development, graphic designs, video editing, content creation, project management, and services related to data processing and data analytics.

Prior to starting her own business in the BPO industry, she worked for different BPO companies for many years—taking on positions such as Customer Service Representative and Process Trainer.