November 22, 2018
Jon Kaplan – Providing Effective Outsourcing Services
November 22, 2018
Derek’s guest is Jon Kaplan, the CEO and President of TeleDevelopment, which is a pioneering full-service BPO solutions company.
For over 25 years, TeleDevelopment provides effective outsourcing services, custom-built call center solutions and human capital support both locally and internationally.
- Jon considers himself as one of the front leaders of the BPO industry with his more than 25 years of work within the industry, which as old or even older than the BPO industry in the Philippines. He started his own service agency which is a boutique call center serving the automotive industry. He sold that company and started TeleDevelopment 28 years ago, in 1990.
- He projects that there will be a significant change in outsourcing services, back-office, non-voice, finance, healthcare, and ecommerce with advances in automation and digitalization as many of these functions will become self-fulfilling.
- High level automation and robotics will likely threaten transactional type of outsourcing activities. Service providers need to scale up particularly the small BPO. They may start looking for niche type opportunities where they can build up dominance and specialty.
- The whole aspect of 3D printing, 4D technologies will become prominent in the next ten years. The Western clients will demand for higher scale and more sophisticated services. This scaling up maybe exciting for the big players with higher capacity to scale up but maybe scary for the small providers.
- More and more things will become outsourced and market like the Philippines may be able to provide a lot of key operational support, but multinational organizations will continue to seek headquartered presence in dominant markets.
- In the coming ten years and up, automation and high-level digitalization will significantly change the profile of the BPO industry.
- The small BPO may build dominance and specialty in niche markets.
- There will be more and more outsourcing demand and the markets like the Philippines may be able to provide more and more operational support services.
Hi, and welcome to another episode of the Outsource Accelerator Podcast. My name is Derek Gallimore, and this is Episode No. 201. So today I have Jon Kaplan of TeleDevelopment with us. Jon is the CEO, and president and founder of TeleDevelopment. Now, TeleDevelopment is one of the grandfathers of the industry. Has been going 25 years, which is as old as the industry is itself.
Jon was responsible for bringing over some of the original outsourcing clients and facilitating some of the original deals and basically getting the original outsourcing projects off the ground here in the Philippines. So, it’s really great to have Jon on board. In this episode we talked about Jon’s own journey and his observations of the industry of this last 25 years.
So, it’s really interesting conversation and I certainly learn a lot. Jon very much deals in the big, big end of the market. And certainly, has done historically and you know it’s incredible to get that different perspective from what certainly I commonly talked about on this podcast which is more SMEs, more business oriented. So, it’s been a fascinating talk and I certainly enjoyed and learned a lot myself.
If you want to get in touch with Jon or learn anymore about TeleDevelopment, of course, all of the contact notes are in our show notes and in you can find that at outsourceaccelerator.com/201. Enjoy!
Okay, welcome back everybody. Today I’m super excited about being joined by Jon Kaplan of TeleDevelopment. He is the CEO and President of TeleDevelopment.
Hi Jon! How are you?
Jon: Hey, good morning, Derek.
Derek: Thanks for joining us. And Jon, I’m going to let you introduce yourself because you can do far better than I. But you are the President, and CEO and founder of TeleDevelopment, which is, it’s been going as long as the industry itself. TeleDevelopment has been around for about 25 years now, and it’s a full-service BPO solutions company serving the BPO industry over here. So really excited to have you today. I supposed initially Jon, just a brief introduction of where you are and how you found yourself here.
Jon: Sure. Sure. I don’t know if I’m one of the grandfathers or forefathers of the industry, but I certainly like to think of myself as the front leader. I started TeleDevelopment services in the US, 28 years ago. So, I have three companies; TeleDevelopment US, TeleDevelopment Philippines, which is fully registered recruiting[?] company and a company here called werk.ph. So those three organizations are kind of an HR support services organizations of the industry. We got started actually quite early. We won a contract in 1999 to support one of the first start-ups here in the Philippines, a company called eTelecare.
Derek: All right.
Jon: That was pretty exciting. We ended up designing some training, and balanced score card in quality. Send some trainers from the US over to the Philippines in first quarter of 2000 to help get started. So, we’ve been here as a registered company now for 15 years. I’ve been servicing the market for quite some time.
Derek: Right. So, you know, I often write and comment that the industry is about 25 years old and you know, you are right at the forefront of that. I supposed just as a bit of background, we might just kind of rewind completely. And if you can give us a bit of introduction to yourself and how you found yourself at the forefront of this development, of this nascent or brand-new industry 28 years ago. I understand that there’s a little bit of magic involvement in that journey.
Jon: And thanks Derek. Oddly enough and some of the people that know me here in the industry. I know that my first passion is really, I used to be a professional magician. And I paid 100% of my college performing at the pleasure of travels, traveled 16 countries in Europe and in purely by accident, magic got my foot in the door in what, we didn’t even call BPO, call center, BPM but got me involved in inside sales back in 1979. So, my BPO career, BPM career, if you will, spans 39 years. I first was an employee of the BF Goodrich company where we actually sold tire franchises over the telephone and meet some grannies[?] of the US where it was too much windshield time for a field salesperson and we built a wildly successful business there. And then after five years with Goodrich, I was recruited by General Motors and moved to Detroit and built an inside-sales, telesales operation as an employee of General Motors.
And then I was speaking at a conference because I had that General Motors Badge behind me and was solicited by a third-party service agency to join as a VP of Business Development, because still back in my early parts of my career, the telephone use for business to business was pretty rare. It was mostly business to consumer use. So long, long story short took that experience as working in a service agency. Started up my own service agency called Summit Marketing Services. It was a boutique call center serving the automotive industry. And for your listeners, get this back in the day, we used to charge $37.50 an hour for business to business, paying business to business work. Sold that company and started TeleDevelopment 28 years ago. So that’s kind of a high-level overview.
Derek: Wow! And so, the evolution then into, because it’s interesting to see the tracking then of, there’s initially telesales, I supposed even, and all of these were internal structures and then you started with the outsourcing of the services so that people could buy into that expertise and most services, but they were still onshore and still very much localized. But also, they were very limited then to telesales I supposed, potentially a bit of customer service anything that can be done over the phone because obviously there was no kind of data, internet, and so capacity was really limited. But what, fast forward 25 years can, did you ever sort of foresee that outsourcing would have taken this trajectory? And in terms of just, now people flooding over, people seen as very normalized, but also in terms of the breadth of roles, functionalities, kind of operational expertise that is, that is outsourced?
Jon: Yeah. I love the fast start and talk about it today. But let me do that with just a quick retrospect. So, so here in the Philippines we have an organization as we, as many know called IBPAP, IT Business Processing Association in the Philippines. Back in the US in 1994, I was the national president of a much larger organization at that time called the ATA. And we’ve talked about transformation. The ATA that time stood for the American Telemarketing Association and telemarketing then became kind of a dirty word, if you will, with some of the legislation, do not call. They changed their names to American Tele Services Association or inbound, more friendly. But today with Omni channel type application then we can talk about that, even that trade association has changed his name into PACE, the Professional Association for Customer Experience. So, if you look at the evolution whether we call ourselves contact centers, BPO, BPM, Omni channel providers, I mean the reality is, customer mindset has changed dramatically over the years and as an industry we’ve had to change to meet the needs, the growing needs, the changing needs of the consumer. And today, having a typically a single focus solution isn’t good enough.
You have to be where the eyeballs are. You have to be where a customer wants to be. And so that’s forcing a lot of change in dynamics through RPA, chat, etc. So henceforth, it’s changing significantly the way people have to think about supporting the industry in the hiring needs and the skills on training that’s going to be required to continue to support the growth.
Derek: And how do you sort of seeing the progression of adoption of this outsourcing more generally, tele services in terms of the user base? It was always, I imagined the big conglomerates that really access this stuff before and now it’s spreading out into the SMEs and because of the SME spread, they need more kind of broader roles, more agile roles. Have you, what are your thoughts on that evolution of the market?
Jon: Geopolitical concerns aside, which could be another topic.
Derek: Yeah. Let’s talk about that.
Jon: The US marketplace, which is still the single largest, most dominant outsource provider, certainly other markets are catching up quickly. But there’s a lack of jobs in the US, even with the desire to create nationalism and bring jobs back, and the desire to continue to repatriate some of the opportunities. The reality is it’s not going to happen the way many people think it might happen. There’s not, there’s a shortage of desirable workforce in the US that want these jobs. And when you look at markets like the Philippines, and other developing nations that really aspire to succeed in this industry with delight, with great customer service skills, with the sheer desire to succeed, it’s hard to compete. And companies that have already made their footprint offshore, they’re multinational organizations. They can’t decide just to turn back and they’re not going to. And there’s a proliferation[?] of small to medium size companies that need the support from both a labor arbitrage as well as a service perspective that countries like the Philippines has to offer but there won’t be assurance about prosperity[?]. We’re not going to see the double digit growth that we’ve experienced in years past, but we’ll still see high single digit crop.
Derek: Yeah. And it’s good that you touched on that because I think businesses ultimately, they’re obliged to move towards greater efficiency outright and that’s regardless of countries and borders and things like that. It’s efficiency with the parameters of quality, and ultimately kind of will win out over any kind of geopolitical intentions, I supposed. Have you, and I supposed staying on that subject where, where do you see that ending if people are actually trying to alter the course of this, do you think that it will have an impact, or do you think that this evolution will continue regardless of kind of geopolitical intentions?
Jon: Yeah, I think the future continues to be bleak for a long time to come. I think in today’s world besides Trump and Duterte, you’re getting on the way sometimes. You might want to edit that. I don’t know. I think the biggest fear factors for continued growth would be some data privacy issues. Would be some legislative issues around data protection. And I also believe as long as social media continues to be a very accepted means of ecommerce, communication, not a problem. There’s been some backlash recently, but it’s going to be very, very pale in comparison to what the opportunities for growth are on the super highway.
Derek: Where do you see the role expansion of outsourcing going because before the internet, it was telephone-based services and as you mentioned, it kind of started off in outbound sales, a lot of the more predatory[?] stuff. Then maybe it went into inbound assistance which probably evolved into customer service, but then really the floodgates opened when the internet happened and the capability of things built on the internet really kind of exploded and now, and maybe I have a slightly different perspective to you, but I’m seeing the majority of people that is starting outsourcing over here. The SMEs that are doing it. It’s not so much about telesales. It’s not so much about reaching out, but it’s more about getting back office stuff down. It’s about getting the accounts done, marketing done, digital functions. Are you seeing that in that sort of bigger end of the market? Because I sort of ultimately see that effect would be anything that can be done in front of your computer monitor will eventually be outsourced and has that potential now. Where do you see the spread of the industry provision from its original days of effectively outbound sales?
Jon: No question, Derek. The landscape has changed significantly in this tilted, in a huge way towards the fuzzy[?] and just expounded eye. The biggest concern from an industry perspective, whether it be voice or not voice for that matter is automation and other individuals that have spoken with you as well articulate the fact that over the next five years plus, a minimum of 20% of these transactional types of transactions or experiences are going to go to the wayside and bots and automation and so I wouldn’t necessarily say anything that can be done in front of the computer because some of that is going to become self-fulfilling through automation. But I would say that, yes from an SME perspective as well as from a midpoint perspective, back office, non-voice, finance, healthcare, ecommerce is changing significantly. Today, instead of taking phone calls, we’re doing contact modification. We’re doing a lot of a digitalization of functions that were formerly voice related. So, I see huge opportunities for SMEs to develop specialization whether it be IT related, finance related, analytics related on and on, but I think you’ve got to find your place. And your place in this market in terms of real growth is leaning much more towards non-voice.
Derek: Yes. Because as I mentioned, as we talked about it obviously was really only voice when they were only telephones. But now with the internet, it really opens it up, doesn’t it? But having said that and I am personally in contact with far more operational activities, but apparently still this statistic saying that about 60% of the outsourcing employment here in the Philippines is still a voice-based work, sales-based work, customer service-based work. So, still has an incredibly large strong foundation of its original roots, isn’t it?
Jon: Absolutely. I don’t think that’s necessarily going to go away anytime soon, but we just need to continue to provide more options. So, for those that’s been most comfortable transacting via chat, via telephone, so be it. But we also had provided other avenues which the more progressive companies have.
Derek: Do you find that in the big end of town there is a, I don’t know what it’s called, but sort of a greater skill adaption and they bring more and more operational activities into the country. I mean, I know that certainly happens with SMEs. They might’ve started with a bit of bookkeeping and then they move into far more operation activities. And I know Deutsche bank as well, they have a back- end operation here. They started with customer service, but now they’re getting PhDs here that are doing the most complex mathematical modeling. Do you see that with the bigger end of town or did they just kind of stick to customer service and don’t really branch out?
Jon: No. I think they’re doing both. They’re trying to branch out as fast as they can because they know they’re going to be left behind, but they can’t, they can’t forget about their core business. So, I mean, to your point, some of the bigger boys or the well-known brands here, they’re probably doing much more than 60% voice. When you’re talking about the TText, the Sitel, Teleperformance, and the Convergys, etcetera. It’s not until you get into some of the financial services organizations, the Accenture’s of the world, things of that nature that perhaps have a much, much lower percent of voice versus non-voice. But it’s apparent everywhere, I mean if you look at healthcare industry as an example. It used to be medical transcription, then went to medical coding, but now even though medical coding is still very, very important and very popular, that’s going to be highly automated here in the next few years. So instead of people that are doing coding medical records, they’re going to be doing data checking and quality, QA works on large databases of information. So again, the transactional type of stuff is very threatened. You’ve got to scale up and I would suggest to the SMEs to look for these niche type opportunities where they can build some dominance and specialty and be more select provider.
Derek: And so, we’ve kind of gone back to the beginning of the industry, but where do you see the evolution of the industry? I mean in a matter of 25 years, it’s just going to be another world I think, sort of in terms of international trade and networks. But where do you see the industry maybe in 10 years from now in terms of the breadth of offering, in terms of the adoption rates from the west? What’s the trend?
Jon: That’s a great question. Like it or not robotics will have major impact and influence in the way we think, in the way we transact, in the way we carry on our daily lives, whether it be from, so robotics is going to play a big part. I think it’s going to continue to be in a much smarter automated age. Will continue to become more Airbnb and Uber ride, it’s just in terms of how we transact. So, I think, quite frankly, I think the next 10 years is going to be very exciting and it’s going to be very scary. Because I think the West will continue to increase its demands on how they are served. I think this whole aspect of 3D printing and other 4D technologies that are going to impact our lives will be very prominent and I think in 10 years’ time the way we do business today will be very, very different.
Derek: Yes, incredible change sort of on the horizon, isn’t it? And do you see a day when the, when I call it the pyramid tilting upside down where the vast majority of US companies are kind of completely outsourced to a destination like the Philippines, where you have the entire corporate hierarchy here. I mean, that’s an extreme, but you know, we’re kind of corporate hierarchies, really built here as opposed to just supplemental departments.
Jon: I don’t know if I have that share of vision. I see significant growth, unparalleled growth, insurance services operations. I think more and more things will become outsourced, but in terms of the hierarchy and turning the pyramid upside down, yeah, I think a lot of the key operational support will come from markets like the Philippines. But again, these are multinational organizations that will continue to have a headquartered presence in pretty dominant markets.
Derek: Absolutely. I mean that’s key to be sort of dominant in the market where you’re dominant already, isn’t it? Fantastic. So, you know, just to come back to TeleDevelopment, I want to get you back so we can deep dive into exactly what TeleDevelopment is, but you know, you founded this in some form or another about 25 years ago and you’re really kind of [busted eyes][?] in this but you’re almost a BPO to BPO, so you provide outsourcing solutions support strategy and services to the thriving BPO sectors. So, you probably have better insight than most into the machinations of the sector, so incredible opportunity to talk about that. I suppose if anyone wants to learn anymore about TeleDevelopment and about yourself or get in touch with TeleDevelopment. How can they do that?
Jon: Yes, well, thanks for asking. First of all, teledevelopment.com, is certainly the easiest way to find us, or werk, W-E-R-K.ph, werk.ph, is the easiest way to find us. And of course, we would have all our contact information there. I would like to just share that we’ve been very blessed, I’ve been very blessed. Over the span of my career, I mean, in and over 750 contact centers globally, or BPOs globally. So, I think what our clients appreciate most, is the amalgamation of best practices and real-world solutions that we can bring. Like all the other industries that needs a lot of experience and a lot of exposure and we continue to learn, and we continue to share. We do about four to six start-ups a year, companies coming into the market, and we serve over a hundred entities, BPOs, here on an annual basis. So, we’ve been fortunate, we see a lot, have been exposed to a lot, learn a lot, and we share a lot. So, I would say, the best way to reach out would be teledevelopment.com, or feel free to give me a call on my mobile if you like, I’ll share that with you, 0920-9527335.
Derek: Fantastic! Thank you so much Jon, and of course will put all of that in the show notes. Thank you for your time, and I will foot to get you in back, so we can actually deep dive into what TeleDevelopment offers.
Jon: I look forward to that Derek, thanks!
Derek: Okay, that was Jon Kaplan of TeleDevelopment and I’m sure that you learned a lot from that, enjoyed that hopefully. So, if you want to get in touch with Jon, or want to know more about TeleDevelopment or anything we’ve discussed in this podcast, then go to our show notes which is at outsourceaccelerator.com/201.
And of course, if you want to ask us anything then please just drop us an email to firstname.lastname@example.org. See you next time!