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By Martin Conboy President Australian BPO Association

http://aca.ninemsn.com.au/article/8418768/call-centre-aussie-school

Please visit the link above and see how a major Australian TV channel presents outsourcing to the Philippines call centres. One of the reasons that we established the Australian BPO Association (ABPOA) was to rebut this type of myopic commentary. I am not an apologist for the Philippine BPO industry, I am however a champion of outsourcing be it onshore or offshore, and I defend the right of companies to see outsourcing as a legitimate part of the business landscape. My comments are below and are best viewed after watching the clip. We welcome your comments, positive or negative.

According to Wikileaks, A Current Affair (ACA) is often considered by media critics and the public at large to use sensationalist journalism – as depicted in the parody television show Frontline – and to deliberately present advertising as editorial content, as previously exposed on the ABC program Media Watch.

The future of parent company Channel Nine is uncertain as it waits for banks to decide whether to grant an extension on $3.6 billion of debt. (http://www.abc.net.au/lateline/content/2011/s3380662.htm) Moreover, it is regularly beaten in the TV ratings by its more professional and considered rivals and after viewing the video, one can understand why.

Its young and relatively inexperienced journalist, Tom Steinfort (age 24) has been caught out a number of times recently using poor journalism as a quick web search will attest to.

At the end of the story as he and the host of the program sat there smugly congratulating themselves, I realised that the ‘PR Hacks’ and ‘Spin Doctors’ that he was glibly calling them, were in fact senior executives from some of Australia’s largest publicly owned companies, who also called me and they were very angry. They were most concerned about the damage that this kind of rubbish does to Australia’s reputation.

This outsourcing story is poor story telling, masquerading as quality journalism and I use the word ‘quality’ in the loosest possible sense. It is a meaningless and directionless load of twaddle and clearly put together by a production team that has absolutely no idea about basic research or the subject matter that they are filming. In fact, I dare say that the story is borderline racism.

The story is somehow implying that it’s ‘un-Australian’ to outsource to a country like the Philippines. Is this any different to Australians not supporting their local tourism industry by taking advantage of the value of the Australian dollar and going on overseas holidays in droves? Our currency is the highest it has been for at least the past 20 years. “We have to face it. Australia is now a high-cost destination,” the former Qantas chief executive, Geoff Dixon told the Australian Financial Review a few weeks ago. “We can talk about it, we can wring our hands, but to spend too much time complaining about the currency is self-defeating.”

The value of the Australian dollar to the Philippine peso has almost doubled in the last 10 years, amplifying the commercial benefits to Australian companies who outsource there. However, by lowering the prices of imports i.e. BPO services purchased in the Philippines or India, it spreads the love to these countries. In effect, it transfers and distributes income to all those Asian businesses that supply BPO services. In terms of social justice, that’s a good thing as it makes these countries less dependent on foreign aid as they learn to support Australian businesses and the multiplier effect, as the money ripples through their economies and reaches into all corners of their economy, means that everybody gets a taste. There is no doubt that it helps to float the economy boat in the countries that have BPO service providers.

It is worth noting that Australia does not have a people shortage problem, what we have is a skills shortage problem. The mining and construction boom, mainly in Western Australia and Queensland has acted like a giant vacuum cleaner, sucking up all available labour resources to fuel the insatiable demand.

Not only do we have a skills problem, but our young people also have an adversity to working in the service industry – somehow it’s beneath them. So even if there was no mining boom gobbling up all of our human resources, we still cannot get people to work in call centres and local outsourcing shops.

So what choice do Australian businesses have? They cannot get people and they cannot get people with the right skill sets and the right motivation, and if they can get them they will not stay and they have to pay twice as much for them. Yet, we as customers still expect first class customer service, telephone calls answered in less than 3 rings by a happy, chirpy operator. Furthermore, it is worth mentioning that over 80% of all customer transactions in Australia go via call centres. They are an integral and important component in the way our society works.

So let’s start with where the ‘story’ fails its viewers.

The nub of the story is that somehow people who are starting a new job should not be receiving induction and skills training to better master their job.

What ACA has done is they have found a small private ‘school’ that is providing some form of basic language training. With selective editing they have managed to make the viewer believe that this is the ‘normal’ training. Anybody in the BPO business knows that the training conducted by BPO service providers – be it product, customer service, Australian idiomatic expressions and languages, including pronunciation syntax, etc. – is very comprehensive and conducted to international standards as mandated by their western clients. Therefore, what ACA has presented is in no way shape or form representative of what actually goes on.

Every company in Australia is made up of as many different nationalities and accents as there are nations on earth. Everybody in Australia, except the Aboriginal people, came from somewhere else. In fact, we pride ourselves on our multicultural make-up.

Being ‘Australian’ is a not a function of being somehow a white Anglo Saxon, as implied by the program, which is a major ethnic group of our population. However, according to the 2006 census, they only represent about 32 percent of our demographic make-up. As a matter of fact, the 140,000 Filipino Australians might be surprised to learn that somehow they were less Australian than Australians whose origins are in the UK. Being ‘Australian’ is an idea that is under pinned by the notion of a fair go for all, not one group at the expense of another. We live in a global, totally interconnected world and what we should be doing is exporting our sense of fair play, not pandering to some pathetic, outdated notion that unless you were white and British to your bootstraps, you are somehow inferior. It’s worth noting that there are more English speakers in the Philippines, than there are people in Australia. The Philippines is the third largest English speaking country in the world. Granted not everybody speaks business grade English; however, the Philippine government is investing heavily in programs to address this. English is the international language of business, and all countries are investing and improving those skills in their own communities to be internationally competitive.

Last week, I attended a BPO seminar and I listened as a spokesman for a major Telco in Australia, who outsource some of their BPO work to the Philippines, stressed that complaints about ‘accents’ in their call centres, irrespective of their geographic locations were more or less at the same levels be they in Australia or the Philippines. This is a function of the fact that their staff reflects the demographic makeup of Australia. Time and time again, respected studies show that what consumers want is ‘First Call Resolution’, and so long as they can be understood and understand the call centre agent they are satisfied. Portraying calls being answered in a foreign country as a ‘pet hate’ of Australian is most duplicitous.

Steinfort, (presumably of non – UK origin) was trying to sensationalise the story by saying that the call centres he was investigating were ‘top secret’ – the names of the companies on top of the buildings must have been a bit tricky for him. Like any business in any country in the world, they have a right to go about their daily routines and there are no sinister secrets hidden inside.

A quick call to BPA/P (The Business Process Outsourcing Association of the Philippines) would have helped him get his facts straight, and they would have been proud to tell him that there are in fact about ½ a million people working in the Philippine BPO sector and 17,000 of those are serving Australia. He would also have been informed that the hourly rate is a range between A$2.50 and A$4.50 an hour, depending upon skill level, etc. While this does seem low by Australian standards, it’s relative to what is known as parity pricing, in that, the cost of living is very low in the Philippines compared to Australia.
See http://en.wikipedia.org/wiki/Big_Mac_Index

Anybody who works in a call centre or in the Philippine BPO sector has a university education, and that is not always the case in Australia. I am not sure where Steinfort did his journalism training, but I can almost guarantee that his tutors would have frowned upon unethical sneaky tactics, like hidden cameras and lying to get inside a commercial building. Also, button-holing unsuspecting employees outside of their workplace and exploiting their vulnerability, was devious and underhanded in the extreme. I am confident that Channel Nine would not tolerate a rival TV crew who showed up unannounced at Willoughby, using such devious methods to get a story. Had he actually managed to gain access, he would have seen an orderly and businesslike environment that is identical to any facility in Australia. There are no secrets, just workers going about their day-to-day activities. This type of story gathering goes someway to explaining why Channel 9 is lagging badly in the ratings.

The angle about relatives phoning someone inside a Manila-based call centre is about as relevant as an Australian Guinness drinker in Melbourne phoning his relative inside the Guinness brewery in Dublin – not sure where he was going with that.

Ridiculous and tedious questions about who is the ‘prime minister of Australia’ and what is ‘vegemite’ are about as relevant as the journalist knowing that Benigno Aquino is the President of the Philippines and that Balut is a Philippines delicacy that also is an acquired taste. I am amazed that he did not throw in the question about “Who is Don Bradman?” That would have really shown them up for the ignorant fools that he was trying to make them appear. This is very low-grade, schoolboy rubbish. We live in a multi-polar world and we need to engage with Asia and show them respect, and this type of nonsense reporting feeds into racial hatred and cultural misunderstanding and panders to the very basest emotions in our community. Dare we forget the Cronulla riots and the disgraceful way that some sections of our community treated Indian students who were actually bringing their hard-earned money and spending it in Australia to buy themselves an education? We actually want people like that.

The simple fact of the matter is that global labour markets have restructured and highly skilled and less expensive Asian knowledge workers can and will do the work required of them. Gone are the days when Asia was a place where low value business processes were sent as a labour arbitrage play.

There are enormous markets up there and the last thing we need is Asian countries marking us down for the crass ignorant swill that the ACA program makes us out to be.

We must get rid of this jingoistic mindset that somehow coolies populate Asia. The intellectual horsepower in Asia is immense, and it’s understandable that in an age of cloud-based technologies coming into their own, companies would want to tap into these highly skilled workforces.

Vested interests in first world nations can complain about it all they want, but the drivers of BPO are very well-known and have been well-ventilated over the last couple of years. The world is governed by self-interest, and that is the nub of the issue.

So it follows with BPO, if companies can access talented and less expensive labour in somewhere like the Philippines, why would a business pay more for the same thing in their own country?

The shareholders of businesses expect to pay the least amount that they can to operate their business and have a duty to employ the least amount of people necessary to make their business work.

The security risks posed by the official representing the Australian Services Union showed that she had absolutely no idea about security in BPO environments. In fact, I would even hazard a guess that she has never been inside a call centre. The fact that the journalist and his camera crew were stopped by the very first levels of security outside one of the buildings is testament to how serious BPO companies take their security measures. Moreover, most if not all, have the following procedures in place as standard:

o No CSR access to external USB drives or floppy disks
o No personal use of internet in CSR’s stations
o Clean Desk Policy – no unauthorized writing instruments and paper inside or outside Operations Floor
o No access to external email
o No mobile phones on the operations floor
o Provide access to shredders for disposal of documents with customer information
o Regular 100% physical security checks

She would also know that most data or databases do not leave the country of origin and are accessed by very strict password protocols via cloud-based technologies or VPNs and the like.

If she has bothered to do a cursory examination of the Internet, she would have found that identity theft has more to do with Russian crime gangs than it does with Philippine call centres.

The section about phone etiquette was only useful in that it displayed the complete unfamiliarity of the reporter to standard business practices. It was like ‘Angry Customer 101’ and he still did not get it. To try and explain phone technique as some form of trickery and a ‘distraction mechanism’ shows that he has no idea or understanding of even the most basic business communication skills irrespective of location.
As I intimated earlier, in case you missed it they, ACA, sent a child on a grown-up’s job.

On the positive side, the footage did show nice, clean, work environments that are equivalent to anywhere in Australia or anywhere else in the world for that matter.

So why do firms send jobs offshore?

Although such decisions may be variously explained in terms of enterprises trying to focus on their core business and to increase efficiency, the conventional thinking is that the prime motive is usually to cut costs.

It may seem to be counter-intuitive, however our own research, which we will be launching early next month, tells us that reducing costs (79%) is the least important driver influencing a company’s outsourcing policy. When we recently canvassed the opinions of Australia’s major corporations, 71% of respondents told us that global expansion is the most important driver influencing their company’s outsourcing policy.

This is a major turnaround to conventional thinking and puts to rest the furphy about BPO 1.0 lift and shift and that cost is the major driver for outsourcing. What the research is telling us is that our business community has matured and moved beyond a pure cost approach to outsourcing. As we have argued all along, outsourcing and offshoring are a legitimate part of the business landscape. It also tells us that major Australian corporations are becoming less myopic and looking at the opportunities being presented by an emerging and fast growing Asia. An example that comes to mind is the insurance market in Vietnam. So mark this day down as the shift in thinking moves us along the journey to BPO 2.0 and beyond.

The main reasons for the growth of outsourcing in Australia are:

1. It’s too hard for companies to find suitable staff even if they want to – so what choice do they have if they want their phones answered. I did see a study years ago that said that of any given western population, only 2 % would be interested and suitable to work in a call centre.

2. There is tremendous pressure on companies from shareholders to reposition their capital in their business and change the make-up of their balance sheets and move to an operating expense environment with all of its attendant tax benefits. This means that they will look to outsourcing as a way of releasing capital, by off-balance sheet funding.

3. The surge in the value (spending power) of the Australian dollar against all other countries, has only amplified how inexpensive it is to assess highly skilled, well-educated, motivated and willing labour in Asia. 



4. There are tremendous opportunities for call centre / customer service knowledge transfer / consulting in Asia especially in China.

Interestingly, we are seeing different types of outsourcing opportunities being requested by our Australian clients, with requests for non-voice back office projects. By and large our clients are telling us that what they want is access to skills not readily available in Australia, and this allows them to focus on their core competencies and support their specialist higher-level employees in Australia.
These are the facts. These are indisputable, and please feel free to quote them to rebut all of the ill-informed nonsense that is currently doing the rounds!

Also we would be obliged if you would circulate this to all of your contacts so that we may balance the debate.