December 13, 2018
Jon Kaplan – Future Prospect of the BPO Industry
December 13, 2018
Jon Kaplan, President and CEO of TeleDevelopment, and co-founder of werk.ph rejoins Derek for another insightful discussion about the future prospect of the BPO industry.
Jon considers himself as one of the pillars of the BPO industry with his more than 25 years of experience working with big industry players.
- According to Jon, big companies don’t start out big. SMEs with the right vision, right talent, right management team, and support services have potential growth opportunities.
- The US market has about 3.3 million people employed in the BPO space while the Philippines has 1.3 million in a short period of time. This number is expected to grow in the years ahead.
- Jon’s company offer consulting services including options to market entry, HR support services including the executive search for three critical positions, country leader, HR Director, and Finance Director. They take advantage of assessment tools to hire the right people with the right skills.
- The BPO growth is swinging towards the boutique, SME market, and specialized service offerings. These small businesses likely start with 10 seats, growing to 50, then maxing out to 100 or more seats.
- There is a good chance of continued growth in the BPO industry for as long as there is strong positive customer experience, and the user experience is good. Outsourcing providers must not cut corners for the sake of earning quick profit to build the foundation of a lasting business relationship of a captive market.
- Most big players started small and so there is that great potential for SMEs to grow big.
- Service providers must be mindful of building a strong positive relationship by making sure that clients’ expectations are delivered, and the experience is worth the business.
- Cutting corners to profit will kill the business, there is no shortcut to a captive market.
Hi, and welcome to another episode of the Outsource Accelerator Podcast. My name is Derek Gallimore, and this is Episode No. 204. So today we have Jon Kaplan back of TeleDevelopment. Certainly, TeleDevelopment is as old as the industry itself. It is I supposed a professional services firm or an advisory firm or a solutions firm that services the outsourcing industry. As I’ve mentioned it’s 25 years old and Jon was responsible for bringing over some of the earliest outsourcing clients into the Philippines and has seen the industry grow up and all. So, I got Jon back to discuss TeleDevelopment and also Jon has another company called werk.ph. Again, you know, we aren’t an infomercial, this isn’t about getting Jon a business, I just find huge value in digging into Jon’s own personal experience and also the experience of TeleDevelopment because there is so much to learn and so much kind of interesting things to discuss about the evolution of the outsourcing market not only the history but where it’s going in the future. So, I have a great conversation with Jon, I’m sure you will learn a lot too. If you want to get in touch with Jon or want to know any more about this episode of course you can find all in the show notes at outsourceaccelerator.com/204. Enjoy!
Welcome back everybody. Today I am joined by Jon Kaplan of TeleDevelopment and werk.ph.
Super excited to have you here. Thank you Jon, how are you?
Jon: Derek, thanks. Thanks for having me back to be with you and the audience today.
Derek: Absolute pleasure and of course, we interviewed you previously in the previous episode where we deep dive into your background, but I want to get you back today to talk about TeleDevelopment itself and deep dive into TeleDevelopment. I maybe just going to let you introduce yourself but effectively I would say TeleDevelopment is almost a BPO to BPO, your almost like a professional services firm servicing the needs of the BPOs in the country and because of that, you’ve been active, you’ve been working for the last 25 years, which is literally the age of the industry itself. You said you’ve been involved with 750 BPOs or call centers, so have an incredible insight and personal direct experience on the market and the evolution of this market. So really excited about this conversation. I supposed initially Jon could you just give people, for those that haven’t heard your previous episode, an introduction of how you got into this industry?
Jon: Yes, thanks Derek for that intro already I think it just means some oldie experience. But I think for your listeners, I spent a number of years in-house, managing in-house call centers as an employee of BF Goodrich and General Motors, building a contact center for them back in the late 70’s or the 80’s. Because I’m the service agency side as VP of Business Development for my own service agency and then created TeleDevelopment or TDS US back in the early 90’s. We established ourselves here in the Philippines about 15 years ago, over 15 years ago. We brought TeleDevelopment Philippines and the company called werk.ph, which is a digital recruitment marketing platform, and we’ll talk maybe a little bit more about that.
Derek: Absolutely. And again, I interviewed a lot of BPO owners, most of them are sort of within the SME space. Certainly, most of them are under kind of 1,000-2,000 employees. You have started right at the beginning of the industry, you’re dealing with a lot of the giants in the industry, those BPOs that employ you know tens of thousands of people, 50,000 or 100,000 people. So, you’re really at the big end of town so it’s good to get in your insight into how this functions but how would you summarize what you do for these people. Is it like a professional services firm specifically within the outsourcing niche? How do you help these BPO partners of yours do what they do?
Jon: I love to answer that question. Let me just start up by saying the big players didn’t start up there. In the very early days of TDS here in the Philippines, we supported the company called eTelecare. They have less than a hundred people. They ended up growing and was acquired by Stream, and then they were acquired by Convergys. We started up with a company here in early 2000 helping called Amber Game[?] Solutions. There were less than 50 people when they started, when we got involved with them. Then they got acquired by TELUS. So, it’s a misnomer. Big companies don’t start out big. So even your SMEs with the right vision and the right talent, and the right management team and support services have really good growth opportunities ahead of them in this market if they apply good, smart thinking.
Derek: Do you think the heydays are over though for outsourcing, especially people listening in the West, you know people are just staggered by the numbers that this outsourcing and service firms have you know with tens and thousands of people and maybe 200,000 people for some of them. It’s just an incredible kind of feat, isn’t it?
Jon: You know, let’s put things in perspective really quick. The US market has about 3.3 million people employed in what we would call the BPO space. Here in the Philippines, we are already 1.3. So, look at the amount of growth that we’ve accomplished in such a short period of time and there’s a lot more ahead of us. And maybe if you don’t mind, I’d like to get back to your original question, which is a little bit about who we are and what we do. For those who are interested to learn more about the Philippines, one of our strong support services is consulting. We help companies understand market entry. You outsource. You dry lease, you build, you buy, you acquire.
So, we have huge amount of experience in helping companies from a strategic perspective understand what are the options from market entry. And then once they decided to come in, we have HR support services if you will, to support them. So, our best clients, just to give you a quick model, is a company that we might help with market entry, and again could be outsource to a somebody[?] or to a larger provider. It could be a build by, acquire etcetera. And then often times the first thing that kicks in after we helped them through registration is our executive search. So, we have an executive search team that typically the first three key critical positions would be the country leader, there would be an HR Director, and then Finance Director. Again, let’s not get hang up on titles depending upon the size of your organization and you don’t always need to start there. But typically, Operations, HR and Finance. Then our staffing business kicks in. And we help through recruitment process outsourcing our clients’ staff and ramp up. We often times take advantage of a suite of assessment tools that we have to make sure that they hire the right people, with the right skill sets. They may choose to outsource their payroll to us. So, if you are starting to get a picture, we’re kind of an HR support services organization. Everything from consulting, training, staffing, management recruiting, assessment tools, payroll, etcetera.
Derek: And you help establish the processes overall because outsourcing is all about automatization of processes now, and that’s where the Philippines is very specialized. If you had new companies that come in and then maybe not as familiar with that, I think there is a huge amount of value transferred there, isn’t there in kind of automatizing processes? Do you see that as a specialty of the Philippines of outsourcing and then also of TeleDevelopment as a derivative?
Jon: Well, it’s certainly one that we do often times from a consulting perspective but it’s also one that you have to really peel back your potential partner very closely. Once you get past the websites and the [browsing literature 10:18], being able to really audit and assess the capabilities and [stance 10:24] of the management team, their operating processes. And yes, for the most part their very solemn, their very good because let’s face it, there’s a tremendous amount of experience here. It used to be a very, very large expat population here, operators, senior level directors. But today that isn’t necessary because we have a lot of great talents and so that’s a big part of understanding the operational side. You need your potential partner or resource is what the strength and experience of the management team.
Derek: And so, what is your I supposed ideal client versus what is your standard client in terms of maybe is it a hundred-million-dollar company, or a billion-dollar company and do you see like the bigger companies are kind of drying up? Because I have kind of a hypothesis that any big company, any of the big multinationals, they’ve already outsourced. You know, it’s kind of there’s no more left. I can’t imagine once that have not yet ventured into it. So, I supposed that’s a double question there.
Jon: Yes, I mean exactly right. The door has swung both ways but it’s swinging more towards the boutique, SME opportunities as well as specialized service offerings. And so, what I mean by that we’ve been involved in some very, very large start-ups, EVP, Capital One, Wells Fargo. From the early days of their entry into the market place, we were there supporting them and many, many others. But today it’s more boutique organizations that are starting with 10 seats, quickly growing to hopefully 50, and maybe maxing out to 100 or 200 seats.
Derek: All right.
Jon: And they’re looking for somebody that can pair up with them based on cultural fit, based on specialty. So, I would agree with you. I think most of the major players are here with the exception of a few late comers. I mean as early as just recently in a big way we have Amazon coming to Cebu, they are coming to Manila. Airbnb’s are here. So, you got somebody’s start-up…
Derek: Yes, but I mean it’s the fresh big business, isn’t it? You know, I supposed Uber have come, yes. But have come by the [crosstalk 00:13:15]
Jon: Yes. It’s digital people or those companies, corporate organizations that have Finance applications or benefit administration applications, or backend processing applications that are looking for partners and still bringing staff all over in some velocity.
Derek: Right, yes. I mean it’s good. What do you say of the true SME that maybe has 20 staffs in the US. Is it something that you can serve, or do you find that even for the SME, there’s not even the scale for them to really benefit from outsourcing or what’s your view on that?
Jon: Here in the Philippines, we can handle problems of any type of complexity, however that being said some companies are often times of the mind set of course that nobody is going to do that better than them. So, depending upon how technical or complex or key some small operations are in a particular organization they may choose to keep them internal, which also driving decisions is the bottom line, the profitability. And see operations[?] being challenge with cost reduction, and as minimum wage increase, and operating expenses continue to increase, many of them can’t help but outsource some of the smaller functions.
Derek: And so, we have done a white paper exploring the size of the SME market in the West. We have identified that there are about 35 million SMEs. They employ a hundred million people with a combined 12 trillion-dollar revenue and this in about 9010[?] key English-speaking high cost countries. And I suggest that maybe 1% of those outsourcing and you know I think that there is potential eventually for all of them to outsource because technology would mean that it is almost normal. The abnormal is just to be restricted to employing in your hometown. Do you see though that the market is maturing or is it fracturing, are things becoming a lot more flexible or rigid, how do you see the evolution of the market both in terms of clients, but then in terms of client’s requirements, in terms of roles that are executed a bit here?
Jon: It’s a lot. I think the mind set had shifted a long time ago. People sometimes can’t picture where the Philippines is located but they certainly can understand if you’re speaking to somebody in India or the Philippines or somebody that is non-native English-speaking person. And so, I think as long as the experience is good, it’s all about the customer experience, it’s all about the user experience. As long as we can continue to set the bar and keep the bar high, in terms of backend results then the chance of a continued growth is awesome. I think for those companies that lower their standards as they’re extremely price conscious [inaudible 00:17:19] and as we know it only takes a few of the bad apples to spoil the bunch. And so, I think as long as Westerners do proper due diligence in selecting the right partners they’re going to have a wonderful experience and as long as we can continue to provide good quality experiences, we’re going to be golden. There has been proposed legislations in the past that we might need to gear a caller, we’ll talk about voice for example. If you give the caller the option to be routed back to the US. And you know if you look at that type of damaging legislation because you’re not doing a good job in fulfilling expectations then it’s going to be damaging. And quite frankly that gets back to one of our service, we have pretty widely used product called Versant, which is an English skill assessment tool for non-native English speakers. So, we can fully assess the quality of the communicator in about 18 minutes, using technology, using machine learning. But it’s tools like that, that would be utilized to make sure that your having a good customer experience.
Derek: And let’s talk about that issue because I feel, you know I’m very I supposed fraternalistic for the Philippines and the outsourcing industry and the potential that it has. But a lot of people are very skeptical and scaving and I think there is a huge hangover in terms of just general day to day consumers, you mentioned outsourcing and the kind of gloominess and I think that when they last phoned their bank. And they had some of, they couldn’t really understand their issues, there were communication problems, but I see that as unpenalized[?] or kind of call back the hangover of olden day teleservices, do you think yourself, have you seen the industry improve and do you see now the actual quality being offered is kind of lightyears away from what was being done 20 years ago? Do you see that a lot of the issues that people still pinned on the industry are actually as a result of prior bad experiences?
Jon: Well, most of these Western markets are a melting pot of cultures if I would just start with, have a similarly poor experience in any country. I found that there’s nothing more important in the outsource world than to a) reject your client’s brand and b) to make sure that you got that strong positive user experience. So, to you point, if organizations cut corners because they want to be the lowest class provider, or they cut corners in not doing a thorough assessment in their onboarding and recruitment process, then you are going to get that negative feedback and to me particularly when we talk about that SMEs that would be my single most, there’s two things that I would tell the SMEs that maybe listening to this is number one, strive to have strong operational practices in place and don’t cut corners when it comes to people. And then secondly, be very careful and wary about the type of clients that you accept because not all business is good business. So, getting back to your question, about the image, yes. Is the image still tainted from time to time? Absolutely. But it’s the old saying, right? Negative situation had been held much more outcast in terms of communication and positive experience. But I would tell you that most conversations are positive unfortunately we hear about the negative ones and the social settings, and today more than any social media will beat you up. If you have just a couple of bad experiences even though it might be less than one half of 1%, social media aspect of a poor customer experience can kill you. So, you have to be more careful today than ever. I think they are more tolerable and accepted of offshore and nearshore calls, but you can’t cut corners and you have to deliver quality.
Derek: I supposed finally, what is your view on adaption right of outsourcing? Obviously, outsourcing is somewhat controversial in the US at the moment, but you know my position is that the big boys had been outsourcing now for a decade. It’s ingrained into just standard operations, yet the SMEs they’re kind of slow to adapt to this, slow to sort of see the huge opportunity that there is. How do you see that sort of the adaption rights in the smaller entrepreneurial market and you own experience in the US?
Jon: The good news is there’s not much adaption in SME because the smaller end of the market can’t afford to do what the larger end of the market has done. If you look at what the biggest growth has been here in the last several years, it’s been those companies that used to outsource, and still do to a certain degree but are also vault captives [?]. And so, they feel that they can protect their brand and now that they have these experiences in the Philippines and attracting scales and everything has been proven, they’ve gone captive and they’re bringing even more shared services operations and they’re continuing to grow in the captive environment. For the SMEs, it would be very different. And so, I see still tremendous opportunity because those types of opportunities that go the SMEs are not likely to go captive. So, if you create the right relationship with a client that could be a long-standing partnership for many, many years to come.
Derek: Fantastic. Again, that is a very similar message to what I tell people as well. Thank you so much. I’m just being mindful of your time, f anybody wants to get in touch with TeleDevelopment, you have been in the market for as long the market has existed, TeleDevelopment has been here for the last 25 years. It amalgamated the best practices of the 750 BPOs or call centers that you’ve been involved in. It’s just an incredible wealth of experience there. So, if anyone does wants to get in touch with you or learn more about TeleDevelopment, how can they do that?
Jon: Yes, thanks for asking Derek. Please visit us, teledevelopment.com, or visit us at werk.ph. We’ve got some really, really, leading edge, mobile first technology that were offering and bringing to the market that is top of the funnel recruitment, that’s very gamify, lots of challenges, and getting right results that we love to share.
Derek: Yes. Should we just talk about Werk here because I’ve overlooked that. But Werk, what is that? That’s an online recruitment platform specifically targeting the needs of the BPO industry? Is that right?
Jon: Thanks for asking Derek. Yes, we actually do three or four things pretty well. Number one, we’re a job portal. Pretty focus to the BPO space about 12,000 applicants a month coming in to Werk. We do digital recruitment marketing where we deploy digital strategy, social media strategy for the likes of Capital One, Citi Bank, 51 Talk, Harte Hanks where we actually create micro sales for them and put out Facebook advertising and different campaigns by using Google and SEO, SEM.
Derek: Because a lot of the communication here is over the social media, isn’t it? Your bringing in or kind of connect to reach out to the population there.
Jon: In this part, you’ve got to be where the eyeballs are. And the eyeballs are mobile.
Derek: And then so the platform there, kind of automate the processes, does it?
Jon: It does.
Derek: Matching the candidate to the roles.
Jon: It really does. So, yes, if anybody would like to learn more, please give us a shout out, werk.ph, or please email me at firstname.lastname@example.org
Derek: Fantastic! Thank you so much for your time Jon.
Jon: Hey, thank you.
Derek: That was Jon Kaplan of TeleDevelopment, and also their other business, which is werk.ph. If you want to get in touch with Jon or know any more about his companies, you can of course find all of the details in our show notes, that is at outsourceaccelerator.com/204.
And as always, if you want to ask us anything, then please send us an email to email@example.com.
See you next time.