Polytechnic University of The Philippines

BUSINESS PROCESS OUTSOURCING ELIZABETH L.
PAMBUENA
POLYTECHNIC UNIVERSITY OF
Course Code:
BPO 101
Subject Business
THE PHILIPPINES Description: Process
Outsourcing
Compiled by: Elizabeth
L.Pambuena
and
Jemimah
Velasco
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1st SEMESTER 2021-2022 Hours: 54 hours
POLYTECHNIC UNIVERSITY OF THE

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BUSINESS PROCESS OUTSOURCING
==========================================================
HAPPY LEARNING!

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BUSINESS PROCESS OUTSOURCING
Course description: The course provides an understanding to the

fundamentals of Business Process Outsourcing concepts via understanding of the
techniques for using business practices and methods to create and improve business
process. The foundational study of business process provides a basis by which
performance improvement are identified and implemented across business
organizations. Business process outsourcing is introduced as a natural evolution of
business process management.
Upon completion of this course students should be able to:
1. Work effectively and independently in multi disciplinary and multi-cultural teams.

2. Perform the basic functions of management such as planning, organizing, staffing,
directing and controlling.
3. Apply the basic concepts that underlie each of the functional areas of business
(marketing, finance, human resource management, production and operations
management, information technology and strategic management) and employ these
concepts in various business situations.
4. Select the proper decision making tools critically, analytically and creatively solve
problems and drive results.
5. Plan and implement business related activities.
6. Apply information and communication technology (ICT) skills required by the business
environment.
7. Demonstrate corporate citizenship and social responsibility.
8. Exercise high personal moral and ethical standards.
9. Analyze the business environment for strategic direction.
Course References:
Textbooks:
a. Rick l. Click Thomas N. Deuning, Business Process Outsourcing
b. JNU, Jaipur, First Edition 2013 PDF book
Internet:
a. https://em,wikipedia.org/wiki/BusinessprocessoutsourcinginthePhilippines
b. https://www.slideshare.net/vk97999/bpo-17109912
Instructional Materials Compilation by:

Jemimah Velasco, MBA and Elizabeth L. Pambuena, MEM
Instructor PUPSPC Assistant Professor II PUPSTB
MODULE 1
THE BPO REVOLUTION

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Intended Learning Outcomes
Having successfully completed this module, you will be able to:
1. Determine the meaning, history and essentials of BPO;

2. Demonstrate awareness on the driving factors which describes BPO as a
Revolutionary phenomenon which enable companies to shift work to its lowest-
cost/highest-quality provider regardless of the provider’s physical location; and
3. Create a Mind Map on the meaning and nature of BPO using the BPO Drivers.
4. Understand nature of Business Process Outsourcing
5. Identify the problems and opportunities in Business Process Outsourcing
ESSENTIAL QUESTIONS
With regard to understanding, these are your guide questions:
1. What is the meaning and importance of BPO?

2. Why BPO is called a Sociotechnical Innovation?
3. What important role does the BPO Industry performed during the 2020
Covid Pandemic?
Overview
Business process outsourcing (BPO) has emerged as one of the leading

business and economic issues of our time. A natural extension of the free-trade
movement that has been a dominant force in global economics over the past two
decades, BPO has been met with mixed reactions. Workers whose lives have been
disrupted because their jobs have been outsourced to lower-wage workers overseas
have understandably decried “offshoring” as a threat to their way of life. Others,
especially those in the foreign locations where new jobs are rapidly being created, are
elated finally to have an opportunity to gainfully deploy their hard-earned skill sets. In
this manual, we attempt to examine BPO from the perspective of its application and
implementation in businesses of all sizes.
We do not address the political or economic controversies swirling around

outsourcing. Instead, we assume that the movement of service work to lowest-cost
providers, no matter where they may reside, will continue in some form in the coming

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years. It seems unlikely that new barriers will be erected that will seriously limit global
free trade. With that in mind, we have developed a rigorous methodology that
businesses can use to analyze the outsourcing opportunity, to make informed
decisions about choosing a vendor, and to manage change and execute an
outsourcing project.
Business process outsourcing (BPO) is 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.
Business process outsourcing (BPO) has emerged as one of the leading

business and economic issues of our time. A natural extension of the free-trade
movement that has been a dominant force in global economics over the past two
decades, BPO has been met with mixed reactions. Workers whose lives have been
disrupted because their jobs have been outsourced to lower-wage workers overseas
have understandably decried “offshoring” as a threat to their way of life. Others,
especially those in the foreign locations where new jobs are rapidly being created, are
elated finally to have an opportunity to gainfully deploy their hard-earned skill sets. In
this book, we attempt to examine BPO from the perspective of its application and
implementation in businesses of all sizes. We do not address the political or economic
controversies swirling around outsourcing. Instead, we assume that the movement of
service work to lowest-cost providers, no matter where they may reside, will continue
in some form in the coming years. It seems unlikely that new barriers will be erected
that will seriously limit global free trade. With that in mind, we have developed a
rigorous methodology that businesses can use to analyze the outsourcing opportunity,
to make informed decisions about choosing a vendor, and to manage change and
execute an outsourcing project.
Overview The Internet bubble bursts, and the world keeps turning. Terrorists
attack the World Trade Center, and the world keeps turning. The global economy
reels in the agony of a major recession, and the world keeps turning. Despite their
unpredictable—and sometimes despicable—natures, humans are nothing if not
innovators and perpetual optimists. In the face of doubt, ambiguity, and even terror,
we continue to strive to build a better world. We are fortunate to be so resilient. Even
as our hopes for an easy peace and new economy prosperity in the twenty-first
century were dashed within months of its arrival, we continue our pursuit. Part of that
quest is based on the technological breakthroughs that seemed to appear with
breathtaking speed in the 1990s. Standing on the shoulders of the innovators of the
time, a new generation of visionaries has jumped ahead. Of all the vast collection of
novelties introduced in the past few years, none is more important than the creation of

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the global communications and information infrastructure that has now searched into
nearly every city, village, hamlet, and encampment around the world. Fiber-optic
cable spans oceans and continents. Low-earth orbit satellites provide streaming
images, data, and voice to the most remote locations. No place on earth, or in near-
earth, is now beyond the reach of the information and data nervous system that was
constructed over the past few decades. This is revolutionary, and this nearly universal
telecommunications infrastructure is a major part of what gives life to the business
innovation called business process outsourcing.
BPO Defined Business process outsourcing (BPO) is defined simply as the

movement of business processes from inside the organization to an external service
provider. With the global telecommunications infrastructure now well established and
consistently reliable, BPO initiatives often include shifting work to international
providers.
Five BPO international hot spots have emerged, although firms from many
other countries specialize in various business processes and exporting services:
1. India. Engineering and technical
2. China. Manufacturing and technical
3. Mexico. Manufacturing
4. United States. Analysis and creative
5. Philippines. Administrative Each of these countries has complex economies

that span the range of business activities, but from a BPO perspective, they have
comparative advantages in the specific functions cited.
https://www.youtube.com/watch?v=ViISZowEBgo
COURSE MATERIAL READ
Chapter 1 The BPO Revolution
Essentials of Business Process Outsourcing by Thomas N. Duening and Rick L.
WATCH THIS VIDEO
Why Outsource?
https://www.youtube.com/watch?v=aqhjNJkvC9w

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ACTIVITIES/ ASSESSMENT
Activity 1: Submit the answer for these questions in our Learning Management
System (Google Classroom).
1. Explain BPO in your own words and why it has been called a Sociotechnical
Innovation?
2. How the BPO Industry supported the Philippine Economy from collapsed in the
time of economic unrest?
3. Differentiate between BPO, Call Center and Contact Center.
https://www.ttec.com/asiapacific/resources/blog/contact-centre-vs-call-centre-
6-key-differences-and-why-it-matters
4. What are the effects when companies in the United States started acquiring
their labor forces offshore?
• How did American people react from it?
• What solution have they found?
MODULE 2
THE BPO REVOLUTION
INTENDED LEARNING OUTCOMES

1. Implement a methodology to help identify which business functions in a company are

candidates for a BPO solution.
2. A three-tier analytic framework is used to map corporate operations and activities.
3. Defining and comprehending an organization's fundamental strengths
4. Prior to implementing the BPO effort, establish performance criteria and evaluate crucial
elements like as timing, cost, deliverables, and risks.
5. Create a compelling business case for which functions and activities could be better off being
outsourced.

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IMPORTANCE OF BPO IN OUR COUNTRY
The Business Process Outsourcing (BPO) industry is one of the Philippine

economy’s two primary ‘legs’, contributing $26 billion to the Philippine
economy in 2019. BPO employs 1.3 million people in over 1000 firms. Workers
provide services for overseas corporations including facilitating travel and
insurance cover, customer support for technology, and telehealth services.
BPO activities have been exempt from closure during quarantine periods.
However, the closure of public transport leaves many employees unable to
travel to work. Insufficient home internet connectivity leaves others unable to
work from home. COVID-19 has disrupted the BPO industry and the overseas
corporations it serves.
https://blogs.lse.ac.uk/seac/2020/09/22/covid-19-and-the-philippines-outsourcing-industry/
BPO: A Sociotechnical Innovation
Many executives and managers shy away from BPO because they wrongly believe it to be a
technical innovation—one better left for the chief information officer (CIO) or other technology
administrators. In part, this belief results from the IT origins of BPO. Many early adopters of
outsourcing were those who needed software development expertise or who sought technical
expertise to staff help desks and call centers. During the 1990s, the labor pool for such talent in
the United States was tight, prompting many leading companies to search abroad for the
personnel they needed. These organizations turned to international labor markets, where they
were able to identify and hire highly skilled technical workers who were far cheaper than their
U.S.-based counterparts. Today, the talent shortage in the United States has abated, but the
cost savings to be gained by using outsourced talent remains.
https://www.ttec.com/asiapacific/resources/blog/contact-centre-vs-call-centre-6-key-differences-
and-why-it-matters
BPO: A Socio-Technical
Innovation
Fundamentally, BPO is a socio-technical business innovation that
provides a rich new source of competitive advantage. By socio-technical
we mean that BPO requires skillful management, and organizational
culture. If left solely in the hands of nontechnical managers,
a BPO initiative is likely to fail for unrealistic expectations about the
potential and limitations of the enabling technologies.
BPO is one of those interdisciplinary workplace innovations that require a
diverse set of skills in order to be successful. The initiation and

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implementation of a BPO project in an organization requires focused

attention on several human factors, both within the organization initiating
the project and within the outsourcing vendor.
These human/social factors cannot be ignored and must be handled
correctly in order for the project to succeed.
Human factors include the following:
 Developing various teams to manage the BPO initiative throughout

its life cycle
 Reassuring staff of their role in the company
 Training people on the new way of doing business
 Dealing with job loss and/or reassignment
 Keeping morale high throughout the change process
 Encouraging people to participate in decision making
 Understanding
cultural differences between the organization
and BPO partner
BPO Transcends IT Origins
BPO has evolved far from these IT-specific roots and now encompasses nearly every business
process. To be sure, the implementation of a BPO initiative will always involve a technology
component, but for that matter so does implementation of a benefits administration office at the
local beer distributor. The point is, nearly every modern business innovation comprises both a
technical and a social component. Decision making, strategy setting, service delivery, and
virtually every other business activity are now sociotechnical in nature, involving humans
interfacing with technical systems. BPO is like that. Fundamentally, then, BPO is a
sociotechnical business innovation that provides a rich new source of competitive advantage.
By sociotechnical we mean that BPO requires skillful management of people and technology
(hardware and software). The manager who initiates a BPO strategy must find effective ways to
introduce people to technology and vice versa. If left solely in the hands of technical specialists,
a BPO initiative is likely to fail for lack of paying attention to the soft issues of human
relationships, change management, and organizational culture. If left solely in the hands of
nontechnical managers, it is likely to fail for unrealistic expectations about the potential and
limitations of the enabling technologies.
Human Factors and Technology Issues

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BPO is one of those interdisciplinary workplace innovations that demands a diverse set of skills
to be successful. Initiating and implementing a BPO project requires a focus on several human
factors, both within the organization initiating the project and within the outsourcing vendor.
These factors cannot be ignored and must be handled correctly in order for the project to
succeed. Human factors include:
• Developing various teams to manage the BPO initiative throughout its life cycle
• Reassuring staff of their role in the company
• Training people on the new way of doing business
• Dealing with job loss and/or reassignment
• Keeping morale high throughout the change process
• Encouraging people to participate in decision making
• Understanding cultural differences between the organization and BPO partner
The initiation and implementation of a BPO project also requires attention to technology issues
such as:
• Compatibility of systems between the BPO buyer and vendor
• Data and system security
• Backup and recovery procedures in the case of system failure
• Data interface challenges and strategies
• Software and database compatibility challenges
• Data and knowledge management
The Six Steps To Start A BPO

Business
Here’s how you can start and run a business process outsourcing
company in six simple steps:
1. Determine The Type Of BPO You Want

The first step in setting up a BPO company is identifying your business
niche.
Why?

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Zeroing in on a niche helps you determine:
 Your BPO industry sector.
 The activities your BPO firm undertakes.
 The type of clients you engage with.
For example, you could provide call center services to small companies
in the retail industry. Here, your BPO sector is retail, your activities are
call center services and the type of clients you work with are small
companies.
Remember, when starting out, select an outsourcing service you’re

familiar with. For example, if you have no experience handling
administrative work, don’t offer those services. Even though it may seem
straightforward, you’re better suited to offering services you’re already
trained in.
Once your company has gained enough traction, you could choose to
expand your business in one of two ways:
1. Horizontal BPO
Refers to BPO activities that can be offered across multiple industries.

For example, you could only provide technical support across various
industries like IT, financial, retail and marketing. In this scenario, your
service remains unchanged; however, the industry focus of your
business varies.
2. Vertical BPO
Refers to BPO services that are industry-specific. For example, medical

coding and billing are activities that are specific to the healthcare

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industry. Here, your industry focus remains the same while your
offerings expand to include other activities within that industry.
2. Develop A New Business Plan

The next step is developing a business plan for your company.
Ideally, your plan must be well-researched and comprehensive. You

need to analyze the intricacies of your chosen niche and look at what
your competitors are doing.
Your business plan should:
 Determine your company’s long-term direction.
 Set clear business budgets, objectives and milestones.
 Identify your business structure.
 Help lenders and investors understand your business idea.
While it’s important to develop a good plan, you need to review and
update it regularly. This ensures that you’re always able to adapt to any
new changes in the market.

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3. Do The Paperwork
Once your business plan is ready, you’ll have to handle all the necessary
paperwork involved in setting up a company.
As this varies on a country-by-country basis, you’ll need to find out how

the process works in your country.
For example, if you’re looking to start your BPO business in Bangalore,

Chennai or anywhere else in India, here’s how you can register your
business:
 In India, you need to register your business under the Companies

Act 2013. This law regulates the responsibilities and operations of
firms in the country. You also need to register with the National
Association of Software and Services Companies (NASSCOM) to
be certified as a BPO provider in India.
 If you are a call center or offer telemarketing and other IT services

in India, your business must be listed as a Private Limited

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Company. You also need to obtain the Other Service Provider

(OSP) license from the Department of Telecommunications (DOT).
 Once you’ve received the OSP license, you may also need to
register your business under the Goods and Services Tax (GST),
depending on your BPO offerings.
Laws and tax regulations are always complicated and confusing, so why
not consult a legal expert to help you out?
They can easily break down the complexities of your registration process
and identify laws that may be beneficial for your business.
4. Invest In The Necessary Equipment And

Technology
Regardless of the kind of services you offer, you’ll need to invest in some
essential equipment and technology.
For example, most BPO companies need resources such as:
 Office space and furniture.
 Computers and office supplies.
 A high-speed internet connection.
 Workforce management tools.
Some BPO firms such as call centres will also need specialized
equipment such as headsets and recording systems.

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Remember, the equipment you need will vary based on the type of
business process outsourcing service you’re offering. So go over what
you need and only invest in that software.
Most companies spend tons of money on tools they don’t need!
With that being said, here are a few key tools that every BPO firm should
have:
A. Communication Tools
You’ll need a set of good communication tools to keep your projects

running smoothly. These tools will help your team collaborate over
projects and share updates and relevant files.
Messaging Tools
Messaging tools like Fleep and Slack help you quickly collaborate over
projects and share relevant data with your staff. You can even create
individual channels for team-specific conversations. For example, you
can create a sales message channel for focused discussions with your
sales team.
Video Conferencing Tools
Video calling tools like Skype and Zoom help you easily interact with
your BPO staff. You can host team meetings and product reviews even if
your BPO staff is spread across the globe! It’s an excellent way to build
team chemistry and ensure that everyone in your BPO team feels
connected.
B. Performance Tracking Tools

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Performance tracking tools help you monitor the productivity of your

employees.
Most companies use them to:
 Determine how active their employees are while working.
 Identify if someone’s passing idle-time as work hours.
 Track how long projects take to complete. Create accurate records

of time worked to bill clients.
With tools like Time Doctor, you get all this and more!
What’s Time Doctor?
Time Doctor is a powerful time tracking and productivity monitoring

software.
It lets you:
 Track time an employee spends on each task.
 Monitor their web and app activity during work hours.

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 Identify poor-time usage to hold the employee accountable.
 Ensure that your staff is actively working.
 Access tons of accurate reports for client billing.
ESSENTIAL QUESTIONS
1. Why need a BPO?

2. What are the steps in Business Process Outsourcing?
3. How to use the tools of Business Process Mapping?
ESSENTIAL LEARNING
BPO is not right for every company, nor is it right for every process in a given
company. But its promise compels managers to seek out BPO opportunities and
exploit them where possible. Regardless of whether your company has formal
functional boundaries, it has processes that may be suitable for outsourcing to third-
party providers. BPO was pioneered primarily by large companies that were eager to
reduce their costs and bloated payrolls. Today, many small to medium sized
enterprises (SMEs) have discovered BPO advantages that enable them to compete
with the larger firms that have been using outsourcing for years. In 2001, for
example,75 percent of BPO users were firms with greater than $500 million in
revenue. By 2002, that number had dropped to 64 percent.1What is indisputable is
that any business that has grown to more than about $25 million in sales has begun to
encounter growth-related challenges in back-office processes that may be suitable for
handing over to an outsourcing partner.
Without question, the decision to implement a BPO solution for any

organization has far reaching consequences and risks. At the same time, these
implications should not lead to paralysis— there are too many possible benefits to fall
into the trap of doing nothing. It is important for decision makers to recognize that

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undertaking a BPO initiative is a strategic action. With the increasing sophistication of

BPO providers, the decision to outsource is no longer one of mere cost savings or
headcount reduction; it is also one of performance enhancement in critical functional
areas: Is your technical support team overwhelmed by customer inquiries? Consider a
BPO provider. Is your new product development cycle too slow? Consider a BPO
provider. Is your accounts receivable department tardy in tracking down late payers?
Consider a BPO provider. In each of these examples and many others, the choice of
adopting a BPO solution is based on improving the company’s performance in that
process. In each case, performance enhancement may mean much more to the firm
than simple cost reductions. Exhibit 2.1 highlights some of the reasons that decision
makers have cited as grounds for implementing a BPO initiative.
BPO Types
BPO has usually been discussed in terms of the international relocation of jobs
and workplace functions. In reality, there are three types of BPO: (1) offshore, (2)
onshore, and (3) nearshore, and they differ in both location and function served
(Exhibit 1.6). Organizations are prone to use any or all of these types, depending on
their needs and the BPO initiative being implemented. In some cases, firms use a
combination of types to achieve their objectives.
BPO is deemed "offshore outsourcing" if the contract is sent to another country where
there is political stability, lower labor costs, and/or tax savings. A U.S. company using
an offshore BPO vendor in Singapore is one such example of offshore outsourcing.
BPO is referred to as "nearshore outsourcing" if the job is contracted to a neighboring

country. Such would be the case if a U.S. company partnered with a BPO vendor
located in Canada.
A third option, known as "onshore outsourcing" or "domestic sourcing," occurs when

BPO is contracted within the company’s own country, even if its vendor partners are
located in different cities or states.
Offshore: Larger Challenge, Greater Reward Offshore BPO is the most

challenging type of this relatively new approach to conducting business, but it is also
the most potentially rewarding. It began with movement of factory jobs overseas and
has been made both famous and infamous with stories of suddenly prosperous
geographic regions mixed with stories of exploitative labor practices. Yet despite the
criticism leveled at some companies that outsource
The complexity of business functions being moved offshore continues to

increase. As such, organizations using the offshore approach have developed a

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variety of models to ensure continuity. Some have utilized a model known as offshore
insourcing, in which the organization establishes a wholly owned subsidiary in the
international market and hires local labor
It is important to note that there is no one-size-fits-all approach to offshore

BPO. With the growing list of companies outsourcing at least some business functions
to offshore vendors, the range of possible approaches will grow as well. This makes it
increasingly likely that the next adopter of offshore BPO will find a model suitable to
its needs.
Onshore: Onshore: Outsourcing to U.S.-Based Firms It would be a mistake to

see BPO as an international business phenomenon alone. Many U.S. companies are
outsourcing back-office functions 25 The BPO Revolution Two Giants Take the
Offshore BPO Lead GE Capital’s International Services unit, which provides
everything from risk calculation to IT services and actuarial analysis for GE worldwide,
has grown from 634 employees to 17,000 during the past five years. More than half of
those workers are in India, and they are not being used for mindless data entry. In
India every employee has a college degree, and more than 1,200 have a master’s
degree in business administration (MBA).
Nearshore: Outsourcing In North America Nearshore outsourcing is a

relatively new term that refers to the practice of outsourcing on the North American
continent. International issues will arise when American firms outsource to Mexico,
Canada, or Central 26 ESSENTIALS of Business Process Outsourcing 4377_P-
01.qxd 1/31/05 12:30 PM Page 26 America, but they are likely to be less complex
than those that attend outsourcing arrangements in, for example, India or China.
Nearshore outsourcing allows companies to test the BPO waters without the level of
risk associated with going offshore. Firms that go with a nearshore strategy are often
seeking cost savings, but they are also occasionally able to find best-in-class
providers of the services they need.
A Strategic Question: To BPO or Not to BPO? BPO has managers around

the world asking not only what it can do for them, but also what it might do to them.
They are excited about the potential for BPO to help manage costs and improve their
balance sheets. Under constant pressure from analysts to control head count,
outsourcing back-office activities to contract laborers in remote corners of the world
can provide welcome and quick relief. Whether the labor source is in India, Pakistan,
China, or some other international port, the prevalence of high-speed Internet
provides opportunities for real-time back-office support regardless of location.
READING MATERIAL
Chapter 2 Identifying and Selecting the BPO Opportunity

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Submit the answer for these questions in our Learning Management System (Google
Classroom).
1. When do you think it’s time for a company to implement and use BPO
Services?
2. What are the major reasons why companies adapt BPO opportunities?
3. Search further what entails a Process Swamp.
MODULE 3
IDENTIFYING AND MANAGING THE COSTS OF BPO
1. Understand the whole range of expenditures, both financial and strategic, that a
BPO initiative entails.
2. Use a total cost management (TCM) methodology to detect both visible and hidden
expenses in BPO.
3. Recognize and analyze the costs of a BPO initiative's analysis, implementation,

transition, and maintenance, as well as the methodologies and strategies that can be
used to reduce those costs.
4. Determine whether managing the BPO program internally or externally is in the

best interests of the company.

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5. Develop a good, strategic process for preparing BPO vendor requests for
proposals (RFPs), analyzing offers, and selecting the right partner.
6. Take charge of the situation.
7. Anticipate, adjust and map BPO costs throughout the project.
ESSENTIAL QUESTIONS
1. What is the meaning and importance of BPO?

2. Why BPO is called a Sociotechnical Innovation?
3. What important role does the BPO Industry performed during the 2020
Covid Pandemic?
ESSENTIAL LEARNING
Make or buy? That is the fundamental decision that faces all organizations
considering their alternatives for managing a business process. The decision involves
many factors, not the least of which is the cost associated with developing internal
capabilities (making) or outsourcing them to an external provider (buying). As
illustrated in the BPO Selection Matrix (Exhibit 2.8), cost is one of the three primary
elements of the BPO decision, along with productivity and mission criticality. Each
must be weighed when analyzing BPO opportunities.
In a perfect world, where all other things are equal, the decision to undertake a
BPO initiative would be based purely on cost-of-labor arbitrage—firms would simply
source business processes to the lowest-cost labor, wherever it may be. But this is
not a perfect world, and the various costs associated with a BPO initiative are not
always easy to identify or forecast. The savings that are most often associated with
BPO stem from the elimination of overhead, including jobs, capital assets, and real
estate. However, the true costs involve far more than head count and capital
investments.
Identifying and assessing the costs related to a BPO initiative are essential to
the outsourcing decision and can help organizations budget appropriately. There are
two primary areas of concern:

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1. Financial costs. Hard costs associated with activities that must be undertaken
to assess, launch, and maintain a BPO project.
2. Strategic costs. Soft costs that are difficult to quantify but can profoundly affect
the firm’s ability to compete.
INSTRUCTIONAL MATERIAL
Chapter 3 The BPO Revolution
1. Describe each step of the BPO Life Cycle.
MODULE 4
VENDOR SELECTION AND CONTRACTING
1. Identify and select the right vendor for a BPO project using a systematic
approach.
2. Create a vendor selection team and a charter for it.
3. Create a list of potential vendors, get the information you need from them,
and then narrow down the list to the most likely candidates.
4. Recognize the criteria selection process – and when not to use it.

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5. Manage the important period between vendor selection and contract

development. Recognize the difference between negotiating an outsourcing
contract and a traditional commercial contract
6.Focus on the 11 key components of an outsourcing contract, and know how to

consider and include them for maximum organizational advantage.
ESSENTIAL QUESTIONS
1. How to identify and select the right vendor selection team?

2. How to develop a vendor selection team and develop its charter?
3. Who are the key staffs need for VST?
4. What is the difference between outsourcing contract and a traditional
commercial contract?
ESSENTIAL LEARNING
Finding the right BPO vendor and developing an appropriate contract are
essential to an organization’s outsourcing initiative. Regarding the former, the promise
of BPO is always tempered by the perceived risks associated with handing
responsibility for an internal business process— no matter how noncore or mundane it
may be—to another firm. So getting the right partner is crucial. As to the latter, careful
consideration of the elements in an effective outsourcing contract can help avoid
many of the risks that contribute to BPO failure. The fact is, managing these functions
in a way that reflects the strategic nature of the buyer–vendor relationship—that is,
with an eye toward mutual satisfaction, trust, and precision—can go a long way
toward maximizing the potential for BPO success.
Identifying and Selecting the Right Vendor The vendor identification and
selection process has a life cycle of its own. It starts with scouring the Internet and
other sources to identify potential vendors/partners, and continues through the stages
of getting acquainted, evaluation, and selection. Although in some ways, this process

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is subjective—based in part on how well the buyer and vendor firms relate to one
another—it can also be conducted systematically. Large firms, such as Xerox, that
pioneered BPO have well-developed systematic approaches for identifying and
selecting outsourcing vendors. Fortunately, the systematic approach that has been
pioneered by the large early adopters of BPO has been refined and standardized over
time. The basic steps are now well known. This quasi standardization means vendors
have developed expectations of how they will be approached and how they will be
required to bid on projects. Becoming familiar with the standard procedures of vendor
selection, then, can speed the vendor review and selection process for buyers and
vendors alike.
Chapter 4 VENDOR SELECTION AND CONTRACTING

VIDEO PRESENTATION (Group 4)
Step 1: Assigned group will consolidate their respective reports and create a video
presentation discussing the topic assigned to the group.
Objectives:
Students will be able to:
a. Practice presentation skills using the English language.

b. Maximize the use of digital technology in this time of highly technological
revolution.
c. Students immersion on the use of technology in adjustment to new normal.
d. Require students’ active participation on the learning process.
Step 2: They will post the video on the You tube Channel of their professor. For
everyone’s perusal.
Step 3: Professor would be providing relative assessments, quizzes and evaluations

to be answered and performed by all the students.

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MODULE 5
MANAGING BPO-RELATED CHANGE
1. Increase the potential for executing a successful BPO transition stage strategy
2. Develop an effective BPO project management plan and determine whether the
project should be managed by an individual, a few people, or a team
3. Recognize the five principles that guide change management and understand
how they can be applied to support the transition stage of a BPO initiative
4. Identify three critical skills that serve as the foundation of a successful BPO
relationship
5. Better determine the depth and scope of a BPO relationship, and make
decisions as to whether to use the assets of the buyer or the vendor and whose
business culture to adopt
6. Understand what constitutes – and how to develop – a trusting, successful

buyer-vendor relationship
7. Minimize or eliminate the factors that can threaten the success of a BPO
ESSENTIAL LEARNING
As the BPO life cycle moves into the operational stage, organizations will find
themselves facing important changes. A great deal of time and expense has gone into

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preparation, and at this stage it is critical to protect that investment in two key
ways:(1) by recognizing and managing the risks that the BPO-induced change
represents and (2) by managing the often complex relationship that exists between
BPO buyers and vendors. An effective change management strategy—which should
not be implemented until the BPO contract is signed and the launch date set— can
identify the tactics that contribute to a smooth BPO transition. A formalized
relationship management strategy can solidify the vendor–buyer foundation, ensuring
that both parties respect each other’s role and operate within the parameters of a
well-designed project management plan.
Changes and Challenges Facing the BPO Organization It goes without saying
that any organization must assess its own unique challenges in undertaking a BPO
project. At the same time, there are general issues that almost all organizations must
confront, including:
• Establishing a vision of the future state of the organization
• Securing leadership as well as management of the BPO transition
• Communicating with internal staff about the BPO transition
• Managing organization culture beyond the process affected by BPO
• Managing job loss and changeover to new management
• Establishing business continuity and new performance benchmarks
To deal effectively with these issues, organizations need an overarching

project management plan, an understanding of basic change management principles,
and recognition of the numerous change-induced issues likely to arise. By paying
attention to, and planning for, these matters early in the process, organizations can
keep their BPO initiative on track.
Chapter 5 MANAGING BPO-RELATED CHANGE

Objectives:
A. Practice presentation skills using the English language.
B. Maximize the use of digital technology in this time of highly technological

revolution.
C. Students immersion on the use of technology in adjustment to new normal.
D. Require students’ active participation on the learning process.

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Go to the link to get the questions
MODULE 6
INFRASTRUCTURE CONSIDERATIONS AND CHALLENGES
1. Determine if the buying organization should use the BPO vendor's or the
BPO vendor's hardware systems, or whether the buyer organization should
create its own.
2. Ensure that vendor and buyer infrastructures are compatible in terms of
hardware and software.
3. Audit its infrastructure and architecture.
4. Ascertain that critical data and organizational knowledge are not lost
during the BPO life cycle's operating phase.
5. Distinguish between data and information infrastructure and knowledge
infrastructure.
6. Maintain information security and integrity. Understand develop and
conduct procedures for system backups
7. Create a thorough training infrastructure that supports the BPO transition
ESSENTIAL LEARNING
Working with an outsourcing vendor involves the integration of a variety of

formerly distinct systems, both technical and social. Previous chapters discussed the
social aspects of project and relationship management, including the difficulties
associated with intermingling organizational cultures and managing organizational

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change. This chapter focuses primarily on technical infrastructure issues that arise
after the BPO project has been launched and operations have begun. These issues
include hardware, software, knowledge, security, and training and support, some of
which were addressed in the total cost management sections of Chapter 3. The focus
here is not on the cost elements of the infrastructure considerations, but on the
management issues that will arise and questions that need to be asked and answered
during the transition and operating phases of the BPO Life Cycle .Companies
undertaking a BPO initiative may want to revisit their cost estimates as a result of the
more detailed discussion of the technical issues contained in this chapter.
Fundamentally, the goal of infrastructure integration is to embed and reinforce

the collaborative nature of the relationship between buyer and vendor. Before the
interlinking of their respective systems, the two companies have interacted only on a
surface level. There have been no process changes on either side and no threats to
business continuity. The integration of buyer and vendor infrastructures represents a
true turning point in the BPO relationship—the partners are now becoming familiar
with one another. The transition phase is characterized by sharing systems, data, and
knowledge. Each party now has additional risk exposure. The buyer is concerned
about data and systems integrity. The vendor is concerned with meeting the contract
terms established by the sales team. Cross-enterprise collaboration to improve
performance must be the overriding objective for each organization.
Chapter 6 INFRASTRUCTURE CONSIDERATIONS AND CHALLENGES
Objectives:
a. Practice presentation skills using the English language.

b. Maximize the use of digital technology in this time of highly technological
revolution.
c. Students immersion on the use of technology in adjustment to new normal.
d. Require students’ active participation on the learning process.
Step 2: They will post the video on the Youtube Channel of their professor. For

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MODULE 7
BUSINESS RISKS AND MITIGATION STRATEGIES
1. Identify, manage, and reduce any business risks associated with BPO.
2. Recognize the seven major risk categories that exist.
3. Analyze the dangers of equal opportunity, labor regulations, immigration, and
international trade agreements.
4. Analyze potential suppliers' human resource (HR) policies and prevent risks associated
with vendors whose business practices may be inappropriate in the Philippines.
5. Evaluate the organization's ability to implement a BPO endeavor and, as a result, lower
project risks.
6. At numerous levels, manage the BPO project's expectations.
7. Recognize the need of establishing and following best-practice rules to protect
intellectual property, including the use of third parties. At numerous levels, manage the
BPO project's expectations.
8. Recognize the need of establishing and adhering to best-practice standards to mitigate
intellectual property (IP) risks, including the usage of third parties.
9. to facilitate more favorable transactions, minimize or prevent legal difficulties.
10. Anticipate probable concerns and problems within a company. Overcome the challenges
to extracting maximum value for the BPO initiative
11. Estimate and plan for potential or unusual or unexpected events that can affect the BPO
plan
ESSENTIAL LEARNING

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Working with an outsourcing vendor involves the integration of a variety of

formerly distinct systems, both technical and social. Previous chapters discussed the
social aspects of project and relationship management, including the difficulties
associated with intermingling organizational cultures and managing organizational
change. This chapter focuses primarily on technical infrastructure issues that arise
after the BPO project has been launched and operations have begun. These issues
include hardware, software, knowledge, security, and training and support, some of
which were addressed in the total cost management sections of Chapter 3. The focus
here is not on the cost elements of the infrastructure considerations, but on the
management issues that will arise and questions that need to be asked and answered
during the transition and operating phases of the BPO Life Cycle .Companies
undertaking a BPO initiative may want to revisit their cost estimates as a result of the
more detailed discussion of the technical issues contained in this chapter.
Fundamentally, the goal of infrastructure integration is to embed and reinforce

the collaborative nature of the relationship between buyer and vendor. Before the
interlinking of their respective systems, the two companies have interacted only on a
surface level. There have been no process changes on either side and no threats to
business continuity. The integration of buyer and vendor infrastructures represents a
true turning point in the BPO relationship—the partners are now becoming familiar
with one another. The transition phase is characterized by sharing systems, data, and
knowledge. Each party now has additional risk exposure. The buyer is concerned
about data and systems integrity. The vendor is concerned with meeting the contract
terms established by the sales team. Cross-enterprise collaboration to improve
performance must be the overriding objective for each organization.
Chapter 7 BUSINESS RISKS AND MITIGATION STRATEGIES
Objectives:
a) Practice presentation skills using the English language.

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b) Maximize the use of digital technology in this time of highly technological

revolution.
c) Students immersion on the use of technology in adjustment to new normal.
d) Require students’ active participation on the learning process.

MODULE 8
BPO INDUSTRY: PHILIPPINE SETTING
1. Understand nature of Business Process Outsourcing in the Philippines

2. Identify the problems and opportunities in Business Process
Outsourcing in the Philippines.
READING MATERIALS
BPO Industry at a Glance https://www.senate.gov.ph/publications/AG%202010-

01%20-%20BPO%20Industry.pdf
The Philippines' business process outsourcing sector expands into high-value

services

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https://oxfordbusinessgroup.com/overview/strength-strength-sector-continues-expand-
higher-valueservices
BUSINESS PROCESS OUTSOURCING TO THE PHILIPPINES [COMPLETE

GUIDE]
https://grit.ph/bpo/
The Philippine Call Center Industry: A Brief History https://www.magellan-
solutions.com/blog/the-philippine-call-center-industry-a-brief-history/
A BRIEF HISTORY OF BPO IN THE PHILIPPINES

https://manilamuse.typepad.com/bpo/2007/06/a_brief_history.html
The Challenges of The Philippine BPO Industry and How These Are Being
Resolved
https://www.yempo-solutions.com/outsourcing/the-challenges-of-the-philippine-bpo-
industry-and-howthese-are-being-resolved/
Call Center Industry Challenges in The Philippines and How To Address Them
https://www.sodexo.ph/blogs/call-center-industry-problems/
Objectives:
a) Practice presentation skills using the English language.

b) Maximize the use of digital technology in this time of highly technological
revolution.
c) Students immersion on the use of technology in adjustment to new normal.
d) Require students’ active participation on the learning process.


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Make a write-up for each topic. Minimum of 5 paragraphs each.
A. Make a full write-up about the nature and history of Business Process
Outsourcing in the Philippines, and
B. Identify the problems and opportunities of this industry.
MODULE 9
WOMEN IN THE BPO INDUSTRY
• Understand the role of women in the BPO industry

• Identify the problems and opportunities in Business Process Outsourcing of
women in the Philippines
READING MATERIAL
WOMEN IN BUSINESS PROCESS OUTSOURCING INDUSTRIES

https://psa.gov.ph/content/women-business-process-outsourcing-industries
Activity 1. Make a write-up for each topic. Minimum of 5 paragraphs each.
A. Does Gender matters in the BPO industry?

B. How to Attract and Retain women employees in the BPO Industry?
Activity 2. Management of Stress Among Women Employees in BPO Industry in

India: A Contemporary Issue
Journal link: http://www.ijmbs.com/13/sonal.pdf
Create a Meta-Analysis using above study by answering the given questions below:
1. What Phenomena and /or Research Problem is the topic all about?

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2. What are the Theoretical Frameworks, Key Concepts and their inter-
connections with each other?
3. What Research Methodology/ies were used?
4. What Data are collected?
5. What are the Major Contributions of the article?
6. What Assumptions the Article is making with respect to Values, Human
Nature and Method?
7. What are the Major Weaknesses of the Work?
8. What Application of Ideas and Information were generated by the article?
9. Suggest Theoretical Framework and Research Method for the follow-up
study.
What are your Observations and Comments?
MODULE 10
CAREERS IN THE BPO INDUSTRY
• Identify the opportunities and challenges available in the BPO industry

• Understand the career path in the BPO industry
READING MATERIAL
The BPO Challenge: Leveraging Capabilities, Creating Opportunities

Journal Link:
https://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidsdps1536.pdf
Create a Meta-Analysis on the topic using the following questions as your guide:
1. What Phenomena and /or Research Problem is this all about?

2. What are the Theoretical Frameworks, Key Concepts and their inter-
connections with each other?
3. What Research Methodology/ies were used?
4. What Data are collected?

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5. What are the Major Contributions of the article?

6. What Assumptions the Article is making with respect to Values, Human Nature
and Method?
7. What are the Major Weaknesses of the Work?
8. What Application of Ideas and Information were generated by the article?
9. Suggest Theoretical Framework and Research Method for the follow-up study.
10. What are your Observations and Comments?
SOURCES:
The BPO Challenge: Leveraging Capabilities, Creating Opportunities

Journal Link:
https://dirp3.pids.gov.ph/webportal/CDN/PUBLICATIONS/pidsdps1536.pdf
BPO GROUP INTERVIEW
• Students exposure to hiring processes in the BPO Industry.
The class would be divided into groups of 5 and the professor would be
conducting a simultaneous and group interview related to BPO/ Call Center
position

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MODULE 13
IMMERSION
1. Students listening ability will be tested.

2. Students verbal communication ability will be tested.
Activity 1. Try to pass this Online Transcription Job Evaluation. Your listening,
grammatical structure and usage of punctuations would be tested here.
Link: https://app.qa-world.com/calls
Activity 2. Try to pass the evaluation exam on this User Testing App. You will be
tested on how you will be able to share your thoughts out loud.
Link: https://app.usertesting.com/users/sign_in

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SOURCES
Electronic Book:
Electronic Sources: BPO Industry at a Glance
https://www.senate.gov.ph/publications/AG%202010-01%20-
%20BPO%20Industry.pdf The Philippines' business process
outsourcing sector expands into high-value services
https://oxfordbusinessgroup.com/overview/strength-strength-sector-continues-expand-
higher-valueservices
BUSINESS PROCESS OUTSOURCING TO THE PHILIPPINES [COMPLETE

GUIDE]
https://grit.ph/bpo/
The Philippine Call Center Industry: A Brief History https://www.magellan-
solutions.com/blog/the-philippine-call-center-industry-a-brief-history/
A BRIEF HISTORY OF BPO IN THE PHILIPPINES

https://manilamuse.typepad.com/bpo/2007/06/a_brief_history.html
The Challenges of The Philippine BPO Industry and How These Are Being Resolved
https://www.yempo-solutions.com/outsourcing/the-challenges-of-the-philippine-bpo-
industry-and-howthese-are-being-resolved/
Call Center Industry Challenges in The Philippines and How To Address Them
https://www.sodexo.ph/blogs/call-center-industry-problems/
WOMEN IN BUSINESS PROCESS OUTSOURCING INDUSTRIES
https://psa.gov.ph/content/women-business-process-outsourcing-industries
MANAGEMENT OF STRESS AMONG WOMEN EMPLOYEES IN BPO INDUSTRY

IN INDIA: A
CONTEMPORARY ISSUE
Journal link: http://www.ijmbs.com/13/sonal.pdf
Video Source:
https://www.youtube.com/watch?v=aqhjNJkvC9w

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Class Code:
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BUSINESS PROCESS OUTSOURCING ELIZABETH L.

POLYTECHNIC UNIVERSITY OF THE

BUSINESS PROCESS OUTSOURCING

POLYTECHNIC UNIVERSITY OF THE

BUSINESS PROCESS OUTSOURCING

Course description: The course provides an understanding to the

Upon completion of this course students should be able to:

1. Work effectively and independently in multi disciplinary and multi-cultural teams.

Instructional Materials Compilation by:

THE BPO REVOLUTION

POLYTECHNIC UNIVERSITY OF THE

Intended Learning Outcomes

Having successfully completed this module, you will be able to:

1. Determine the meaning, history and essentials of BPO;

1. What is the meaning and importance of BPO?

Business process outsourcing (BPO) has emerged as one of the leading

We do not address the political or economic controversies swirling around

POLYTECHNIC UNIVERSITY OF THE

Business process outsourcing (BPO) is the delegation of one or more IT-

Business process outsourcing (BPO) has emerged as one of the leading

POLYTECHNIC UNIVERSITY OF THE

BPO Defined Business process outsourcing (BPO) is defined simply as the

1. India. Engineering and technical

2. China. Manufacturing and technical

4. United States. Analysis and creative

5. Philippines. Administrative Each of these countries has complex economies

COURSE MATERIAL READ

Chapter 1 The BPO Revolution

Essentials of Business Process Outsourcing by Thomas N. Duening and Rick L.

WATCH THIS VIDEO

POLYTECHNIC UNIVERSITY OF THE

INTENDED LEARNING OUTCOMES

1. Implement a methodology to help identify which business functions in a company are

2. A three-tier analytic framework is used to map corporate operations and activities.

3. Defining and comprehending an organization's fundamental strengths

POLYTECHNIC UNIVERSITY OF THE

IMPORTANCE OF BPO IN OUR COUNTRY

The Business Process Outsourcing (BPO) industry is one of the Philippine

BPO: A Sociotechnical Innovation

POLYTECHNIC UNIVERSITY OF THE

implementation of a BPO project in an organization requires focused

Human factors include the following:

 Developing various teams to manage the BPO initiative throughout

 Training people on the new way of doing business

 Dealing with job loss and/or reassignment

 Keeping morale high throughout the change process

 Encouraging people to participate in decision making

BPO Transcends IT Origins

Human Factors and Technology Issues

POLYTECHNIC UNIVERSITY OF THE

• Reassuring staff of their role in the company

• Training people on the new way of doing business

• Dealing with job loss and/or reassignment

• Keeping morale high throughout the change process

• Encouraging people to participate in decision making

• Understanding cultural differences between the organization and BPO partner

• Compatibility of systems between the BPO buyer and vendor