By Jason Thurwanger
There are an increasing number of people that point to the meteoric rise of the BPO industry in the Philippines and suggest that the footprint here will only continue to grow larger. In short, they are of the opinion that the industry has already grown too big to fail. They point to large and continuous investments from abroad, a high English literacy rate, and a bountiful supply of warm bodies to staff the growing industry as evidence that they are set for the future.
The industry is projected to be on pace for $16 billion of revenue this year, with projected growth rates estimating annual revenues of $25 billion by the year 2016. Many people share the view that the Philippines is the BPO/contact centre capital of the world and will continue to be so moving forward.
Someone asked me very recently if I thought that the industry had grown too big to fail in the Philippines. I smiled and stated, “Of course”. It’s not too often that some entity can be deemed too big to fail. Consider the following entities that were also too big to fail:
- The Titanic – This modern marvel of shipbuilding was never formally advertised as being. However, in one interview, an executive from the company that built the Titanic stated that he thought the Titanic was unsinkable. Ironically, when he made this statement, the Titanic was almost completely sunk already.
- Persian Empire – In the Battle of Marathon, the Greek people sent 10,000 troops to try and slow down the advance of the Persians into Greece, so that the rest of Greece could have more time to mobilize a more robust defense. Their task was a suicide mission as there were hundreds of thousands of Persians on the way. Interestingly, the 10,000 Greeks sent to slow the Persians down actually destroyed the much larger attacking force. Some years later in the Battle of the Issus (modern day Turkey), Alexander the Great led his force of 40,000 troops into battle against hundreds of thousands of Persians…..and won decisively, precipitating the final demise of Darius III.
- GM & Chrysler – These two automotive giants were deemed too big to fail. However, through practicing an approach of listening to board members and unions much more attentively than listening to their customers, both organizations needed billions of dollars in bailout money from the US government to survive. Furthermore, Chrysler needed to be purchased by an Italian automaker to stay afloat.
We could go through many more examples of how entities that were “too big to fail” ended up failing (i.e. financial services, banking, etc.), but it’s not really necessary. If history has taught us anything, it has taught us that any entity can be too big to fail…..until it ultimately fails.
One must take a more critical look at the true operational health of the BPO industry in the Philippines when considering the long-term viability of this industry in this country.
Upon closer inspection, one will see that while the headcount of Filipinos in the industry has risen dramatically over the last 10 years, actual performance (most notably NPS/CSAT) has not seen a corresponding rise. This is due to many factors, including an underdeveloped workforce, weak Operations leadership, and a lack of understanding and appreciation in the realm of what the customer experience really is and how to optimize it consistently.
I am a fan of the Philippines. However, rather than trying to be “too big to fail”, the industry, and all employed therein, would be better advised to make their operations “too effective to pass up.” Otherwise, the outlook for the BPO industry in the Philippines is not quite nearly as bright as many assume.
After all, what is the going market rate and future demand for an industry that routinely underperforms, creates customer friction, produces inconsistently quality in the customer experience, and that lacks a vibrant understanding of how to effectively engage customers in the US, Canada, Australia, and the UK?
Yes, the industry has grown a great deal in spite of these weaknesses. However, the leadership in the Philippines need look no further than the history of the BPO/contact centre industry in India to better understand the cost of assuming that a continuance of mediocrity will be acceptable.
Jason Thurwanger is a freelance Operations Consultant with 20 years of experience in the contact centre/BPO workspace, including extensive experience in customer care/CRM, customer intelligence/market research, and sales (both inbound & outbound). Driving the customer experience and improving operational efficiency make up the centrepiece of Jason’s consulting engagements. email@example.com