Michelle Fiegehen – Yempo Solutions’ Outsourcing Journey

Derek: Hi and welcome to Outsource Accelerator.  This is episode number 93 and I’m joined by Michelle Fiegehen.  We first met Michelle in an earlier episode number 87 so if you want to go back and hear her journey, her story then go and listen to that episode.  Today, we are diving into Yempo Solutions which is her outsourcing BPO service and this isn’t an infomercial I’m not getting paid for this, she’s not getting paid but basically, I want to deep dive into different outsourcing service providers and ask the questions that you could be asking or you should be asking so that you get to know the various offerings out there and the value adds that you get from such places such as Michelle’s Yempo Solutions.  So I had a really good conversation I’m sure you’ll learn stuff here and if you want any of the show notes or get in touch with Michelle then go to outsourceaccelerator.com/93

Derek: Hi and welcome back everybody.  Today I’m lucky to have Michelle Fiegehen join us again  Hi Michelle.

Michelle: Hi Derek.

Derek:  And in the previous episode which you might want to go and look back at we explore Michelle’s corporate career in outsourcing and now she’s sitting down in Cebu with her own outsourcing service provision and Michelle is very much blue chipped corporate background and she brought all of that experience now into her outsourcing service provider, Yempo Solutions.  This isn’t an infomercial but I want to talk to Michelle more about her Yempo and why she started Yempo and the kind of value that I feel that business owners can get from service provider such as Yempo but just outsourcing generally.  So thanks for joining us Michelle and for the benefit of those who haven’t heard your prior podcast do you want to just briefly introduce yourself.

Michelle: Yes sure, I’m Australian and I was first sent to the Philippines in 2009 by my corporate employer Macquarie bank which is 1 of the largest financial institution in Australia. My background is It Engineering and I was running a couple of teams in Sydney and they asked me to relocate for 3 months to Manila to established an it engineering function in the small office that they have there.  My 3 months turned into 3 years and I was asked to go to India, I spent a year in India and the end of that time I chose not to return to Sydney but instead to come back to the Philippines and start my own business and that was I guess 3 and a half years ago now it’s been a fantastic journey.

Derek: Nice. So you started the Yempo Solutions, you started in Cebu, there’s a lot I want to sort of dig into that but in Macquarie you were dealing with the very high end  you weren’t dealing with call centers, you weren’t dealing with VA’s you were dealing with a very high-end service delivery in the kind of financial and IT and infrastructure sector. What are you doing with Yempo and where do you see your happy point in the market?

Michelle: Well, Yempo has been an interesting journey following on from my Macquarie experience. I have a business partner in Sydney in Yempo in Parkin. He is also a former Macquarie colleague and together we decided to form Yempo but we kind of didn’t quite understand the value proposition at the time which in hindsight it’s quite bizarre, we expected to be actually providing exactly the type of services we don’t do a lot of now which is the VA’s and the call center type people but shortly after we established ourselves we caught the attention of some IT, some substantial IT outsourcing companies in Sydney that particularly wanted to deal with us because they knew that we understood their business, we understand IT Engineering, we understand IT outsourcing, we understand the language that they speak, we know how to attract and retain the sort of highly technical talent that they were looking for so despite having packed up my life and relocated to Cebu to start the business very early on wants some clients that needed very very highly skilled people solutions architects in fact which I knew we couldn’t actually find in Cebu so we shortly after we opened another office in Makati to source the type of talent that you don’t find in Cebu.

Derek: So do you then if I want a bookkeeper from Yempo.  Do you do that as well or have you found that you’ve signed it down into your specific niche and provide very technical services?

Michelle: No, we kind of say that we specialize in IT and finance but we have had a Canadian client that has a whole bunch of drafts people with us, Engineering type of drafts people we don’t turn away that sort of business, we’re still a young company we don’t turn away almost anything.  I do no longer take call center clients so if somebody comes to me and they say look we are looking for someone to do telesales I have a friend who runs a business here in Cebu and I refer them over to her just because I think that company can do a much better job of it than we can our sweet spot really is the technical highly specialized IT financed type resources.

Derek: And getting into the nuts and bolts can you give people an idea of the size of your operation and then also the cost or the billing structure do you have a kind of seat lease or is it a result based program?

Michelle: Size wise we are still very young, we’re quite small, we have about a 130 staff, we also have those 130 staff are spread across 5 location so we realized fairly early on we didn’t want to be the type of outsourcing company that has a whole floor with 500 seats all in a row in cubicles, it cost us more to have smaller boutique locations but we’ve really like that sort of we like to personally to work in and we think our staff like coming to on an office where they know everyone’s name, it’s small and friendly you can have a coffee or bite of lunch with pretty much everyone and you know what they’re doing so that’s a size wise.  In terms of our structure, I don’t call it seat leasing, there’s couple words that I don’t like using for my business though they are quite standard in the industry I don’t love the term BPO because a lot of people think of that as a call center, seat leasing to me implies not a lot of value ad, so we do call ourselves an outsourcing business outsourcing offshoring.  Our value ads are personally in our office environment, we don’t have cubicles, we have an open plan office, we don’t have any offices for senior people, I’m right now sitting at the bank of 6 desks with staff of all ages and seniority in terms of their growth, my desk the same size, my chair is the same, our office environment includes a very large pantry with a lot of freebies, free flowing tea and coffee, pot cooked rice every day. We’ve really gone about our way to create an environment that is exceptional for the staff so that we can attract and retain the very best staff that we can find and our billing model is all inclusive, we don’t charge extra from recruitment we don’t charge extra for social and welfare activities or the Christmas party or anything everything is included in the price that we pass on to our clients

Derek:  So which some of your senior professional roles. Can you give insight into the costs and the cost differential between what you’d be paying for an equivalent person in Sydney?

Michelle:  Most costly resource that we have which is a solutions of very very high end solutions Architect business analyst the salary of that person is about 5,000 per month which is $60.000 AUD per year in Australia you would be looking at well over $150.000- 200,000 per annum even that is the salary only cost even when we add on our cost the cost savings are phenomenal.

Derek: And so that is about 70% reduction but also inclusive in that $5,000 AUD a month that includes all of the office housing that includes all the HR support your oversight?

Michelle:Sorry no those numbers was salary only but including all of our fees if you’re looking at a $5,000/month salary our fees come in at under a thousand dollars on top of that so $6000 a month compared to what’s that $84000 a year compared to a couple of hundred thousand dollars per year in Australia and the salary component in Australia doesn’t include the desk and the real estate and internet and all of the overheads where is our numbers includes absolutely everything.  There’s a lot of people I think a lot of companies when they look outsourcing don’t actually realize all of the on cost that go with hiring people back in your home location the more the bigger you get the more admin overhead you have, the more office space you need you need to upgrade your interne,t all of those things are additional per head cost where’s when you look at an outsourcing arrangement everything is bundled in.

Derek: I mean the cost saving is extraordinary aren’t they?  When you consider all that bundling but also you go out and you find the staff member I mean to recruit a 200,000 year employee in Sydney you know your recruitment fees alone would probably cover the salary of getting someone in the Philippines to do the entire job

Michelle: Absolutely, and even on the recruitment side of thing, we’ve got a fantastic team of recruiters that are extremely talented in finding technical skills and they do all the screening, they all the short listing so if you’re working with us we just get you provide a job spec to us, little bit of context for the role and what you end up with is a very small list of perfectly suited candidates ready for you to interview and select so it’s so simple it’s such a simple way to expand  your business or to meet cost saving requirements.

Derek: What is the common beginning relationship period with the new client that you have and what do you suggest more businesses do to both get in to outsourcing and make a success of it from the start so that’s a bit of a loaded question but basically have you eased people’s integration in to outsourcing and allay their fears and concerns and things like that?

Michelle: For some context I have some clients, I’ve got a couple of clients who have never stepped foot in the Philippines and one of them I have ___ to verbally everything is based in San Francisco and everything’s been done over email and he’s extremely happy with the staff he has here. I think he was probably the fastest person I ever signed as well I think from zero to advertising the role for them was about 16 hours and going to another extreme I’ve got the companies that come to the Philippines and the meet with a lot of BPOs service providers  and they check out the locations, they do a lot of research into the culture, they go back they spend a lot of time thinking about it and sometimes they’ll start with 1 or 2 roles and then grow with us our largest client that has almost 30 roles where they started with just 1.  There are other companies that I think go in to a bit of analysis paralysis, they might come over here and get a bit overwhelmed but the options I think if organization that are looking at putting a large subset of their resources offshore then a visit to the Philippines is definitely an advantage but I do think a guided tour or a consulting arrangement is a better way to go because it’s difficult to identify which service providers are a good fit for you and you can waste a lot of time visiting lower end perhaps slightly less ethical service providers which might be a disappointment and turn them off completely I think if you can team up with someone or identify someone who can do a guided introduction to the Philippines it’s much more likely to be successful.

Derek:  Yes, I mean there’s by be aware with everything, even vendors in the west there’s bearing qualities and you certainly have to be aware of that in the Philippines but I find it exciting it’s just that you’re saving 70% on salaries but if people go with Yempo then they’re also buying in to your vast corporate experience and your knowledge of infrastructure and building systems you know there’s huge kind of asset value that people I think it’s easy to overlook the huge asset value incorporated in just the monthly fee that they paid you.

Michelle: Yeah that’s a good point and I do have some clients who have come to us from other BPO’s because they had a disappointing experience. I think it’s important to get to know for companies to understand what it is that they value and so that they can make sure they’re choosing the right partner.  I don’t think well almost positive that we are not the lowest cost service provider, I don’t think we’re the most expensive but we provide so much extra value because of the corporate knowledge and the level of professionalism that Ian and I have instilled in our business and also our very specific technical knowledge.  One of the reasons Ian and I works so well together, when I was building capability from Macquarie in Manila, Ian was sent to Philadelphia and Hong Kong and other international Macquarie locations, he was part of merger and acquisitions team so his job was to make sure teams that were merging with Macquarie that it all happened seamlessly with no business in fact and he was consuming the services that I was building in manila so between the 2 of us not only do we have a very good end to end view of the outsourcing experience but we also have a lot of experience in how to seamlessly in to great technology in an offshore location and people get people working together in an offshore location

Derek: Yeah that’s interesting cause integration there is a certain into it you know especially depending on how complex the role or roles in departments are but especially also in modern acquisition very common, those things are stuffed up and you come out of an acquisition with huge inefficiency and lots of finer edge of exploring those things.

Fantastic Michelle, it’s been a great insight into Yempo and your experience, If people want to get in touch with you how would they do that?

Michelle: They can either visit our website at www.Yempo-solutions.com or email me at [email protected]

Derek: Fantastic, and there was another episode with you earlier about your background and also we’re going to get you back to chat a little bit more about the broader Philippines and the business opportunities here and the future of outsourcing so look forward to seeing you again

Michelle:  Fantastic.  Thanks very much, Derek.  I enjoyed that.

Derek: Ok that was Michelle Fiegehen of Yempo Solutions, if you want to get in touch with Michelle or you want any of the show notes then go to outsourceaccelerator.com/93 or if you want to ask us anything drop us an email to [email protected]. See you next time.