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More than decades ago, companies started outsourcing their business processes and functions to offshore locations, primarily to cut down on costs and focus on core business activities at home. Since then, the global outsourcing industry has come a long way.

Advancement in technologies has made it much easier to perform work from a remote location, and consequently, the offshore outsourcing industry has grown tremendously. Research studies have been conducted to provide insights and statistics on popular outsourcing destinations and the outsourcing providers that offer their services to customers from all over the world.

Outsourcing statistics

We've compiled the ultimate list of outsourcing statistics to help stay up-to-date with the trends. Check out this infographic and read on to learn more about the global outsourcing industry.

Outsourcing Statistics Infographic

The Global Outsourcing Industry

According to Deloitte's 2016 Global Outsourcing Survey, 78% of respondents claim that they feel positive about their outsourcing relationship.

When asked about the reasons for outsourcing, 59% of businesses cited cost-cutting as the primary reason, while 57% claims that it enables them to focus on core business functions. Another 47% of businesses claim that outsourcing solves business capacity issues.

Other reasons for outsourcing include the enhancement of service quality, critical to business needs, access to intellectual capital, business environmental management, and wider transformational change.

This is why more industries are outsourcing their business processes, especially IT and customer service. Outsourcing sectors include IT-BPO, healthcare and pharmaceuticals, energy, travel and transport, telecommunications, and media.

In KPMG's recent Global IT-BPO Outsourcing Deals Analysis, telecommunications sector consistently remains one of the top contributors to the outsourcing industry. It's because this sector is increasingly leveraging information and communication technology as well as social, mobile, analytics, and cloud technology.

Adoption and Revenue

Another study revealed that since the Great Recession in the United States, the country had outsourced more than 2.4 million jobs. In fact, 57% of companies in the United States increased their use of outsourcing, while 34% significantly restructured outsourcing agreements and only 9% terminated their outsourcing agreements.

When KPMG analyzed the deals closed in the first quarter of 2017, they found that albeit decreasing, the Americas is continuing to be a major outsourcing region that contributes 42% of the total deal value (from 68% the previous quarter). Of these, 41.5% came from the United States alone.

Meanwhile, the EMA (Europe, Middle East, and Africa) and ASPAC (Asia and Oceania) regions are not far behind and have increased their adoption of outsourcing. In the previous quarter, EMA contributed 27% of the total deal value, but during the first quarter of 2017, their contribution increased to 35%. Of this percentage, 22.07% of deals came from the United Kingdom.

ASPAC, on the other hand, contributed 23% this quarter as compared to only 16% in the last quarter. Australia and India were also identified as a key outsourcing market in the same report.

Since the advent of outsourcing, revenue has almost doubled. In 2000, the global market size for outsourcing was at 45.6 billion U.S. dollars and that number has continued to grow until it reached 88.9 billion U.S. dollars in 2015. However, the same source reported that last year, the global market revenue went down to 76.9 billion U.S. dollars.

Automation and Outsourcing

The global outsourcing industry has evolved, as automation technology is taking over much of business processes. Traditional IT-BPO offshoring models are evolving. In the past, operations of an entire business function are contracted. Today, specific services can be contracted and delivered across distributed environments in the world.

But, because automation is a relatively new technology, it still needs to be closely monitored. As a result, new jobs are created as human decision-making and critical thinking are still required in creative and more complex processes. These new positions require more advanced skills for the building, training, management, troubleshooting, and improvement of the technology. In effect, the demand for low-skilled jobs in offshore BPO companies is declining, and the demand for higher skilled workers that can manage and improve automation technology is rapidly increasing.

As such, new offshore positions are being created in rhythm with the trend of outsourcing higher-skill jobs, and creative tasks that cannot be automated is rising. According to MicroSourcing, the most common business processes that companies nowadays outsource are for small or one-time projects, photography services, administrative tasks and repetitive processes, accounting and bookkeeping, and graphic design projects.

The Philippines as a Top Outsourcing Destination

Because SMAC and automation technology is rising, A.T. Kearney took digital competence in consideration to identify the top outsourcing destinations in its Global Services Location Index (GSLI). Along with this, they used 38 metrics surrounding financial attractiveness, people skills and availability, and business environment. In this GSLI, the Philippines ranks as the 7th best offshoring landscape.

Meanwhile, the Tholons Services Globalization Index added digital innovation this year as one of the metrics in coming up with the top outsourcing destinations in the world. It places the Philippines 3rd on its list of top digital nations. Manila is also ranked 4th on their list of top super cities.

These rankings confirm that the country is holding steady as an industry leader in outsourcing. As one of the world's largest English-speaking nations with a 95% literacy rate, the Philippines is an undisputed leader in customer service and BPM (Business Process Management). In fact, 16 of the top 20 offshore call center projects in 2016 were located in the country.

More importantly, the Philippines is gaining ground in high-value fields including legal-BPO and engineering. The country is constantly updating the skills and knowledge of their talent pool to keep up with the evolution of outsourcing trends and automation technology.

Final Words

Digital forces such as robotics, AI, cloud storage, social media, mobile technology, and big data are shaking up the traditional model of outsourcing services. As such, the global outsourcing industry is becoming increasingly competitive, with Canada, Chile, Israel, and Brazil disrupting its landscape. Outsourcing companies and third-party providers need to innovate and re-invent their services to keep up with evolving demands.

At MicroSourcing, we enable organizations and enterprises to get the most value for their money and grow their business exponentially in response to today's digital demands. Whether you're a startup company or an established enterprise, we make sure to offer a strong outsourcing option to help your business thrive.


Regardless of the size of your company, whether you own a startup, an SME, or a large enterprise, financial management plays a big role in the success of your business. When a business fails, it's often, if not always, because of poor money management.

Accounting comprises time-sensitive tasks that should be always kept up-to-date. However, when you have limited time and resources, there will be a tendency to fall behind. A great way to ensure that you are always on top of your accounts is to outsource accounting.

One of the top outsourcing destinations is the Philippines. With BPO as one of its most dynamic and fastest-growing industry, more and more foreign companies are looking to outsource their business functions, including accounting and finance, to the country. In 2017, Manila placed fourth on Tholons' list of top global outsourcing destinations.

The strength of the BPO industry in the Philippines is driven by the benefits it offers. When it comes to outsourcing accounting to the Philippines, here are some of the advantages that businesses worldwide can get.

Save on Costs

Outsourcing, in general, helps you reduce overhead as you don't have to worry about the expenses that come with having an in-house staff, such as new hardware and equipment, employee benefits, and others. Outsourcing accounting work to the Philippines means lower labor costs. According to PayScale, as of writing, the average annual salary of an accountant in the Philippines is Php292,416. In the United States, the average annual salary of an accountant is $49,749 or around P2.6 million.

Save on Time

With accounting as one of your time-consuming back-office functions and not the main focus of your business, then it would be more efficient to outsource accounting tasks. This way, you can have more time to focus and be more productive with your core business functions. Outsource accounting work such as payroll and bookkeeping to accounting outsourcing firms so you can focus on day-to-day operations and growing your business.

Access to Expert Skills

Making accounting mistakes can seriously damage your business and even your reputation. Outsourcing gives you access to highly skilled accounting professionals, ensuring that your accounts are always accurate and up-to-date.  The Philippines has a 96.3% literacy rate and a strong education system. Accountants hired by outsourcing firms in the Philippines have a wide knowledge of tax codes and laws and the ins and outs of the industry.

Access to Advanced Technology

Third-party providers that specialize in accounting use the latest accounting tools and applications and have training courses to update their skills in using these tools. When you outsource, you instantly get to take advantage of these technologies without having to purchase them. By taking advantage of technology, not only would you save on operational costs, you would also be contributing to saving the environment. Many accounting providers use cloud data storage, hence, reduced paper use.

Data Privacy Act

Many businesses are hesitant to outsource their accounting work because it involves sharing confidential data. But outsourcing to the Philippines gives you the peace of mind that your data is protected under the Data Privacy Act of 2012 that prohibits unauthorized access and use of personal and confidential information.

Let MicroSourcing take care of your finance and accounting needs. From hiring highly-skilled accountants to setting up an offshore team for a financial services account, we can help.


Outsourcing back office operations is efficient and beneficial to any business, especially startups and SMEs that have limited resources. It reduces operational costs and allows you to focus on core business functions.

To give you an idea how your company can benefit from back office outsourcing, here are good examples of businesses and the benefits they get from these services.

Banks and Financial Services

Tasks in the businesses in the banking and finance industry involve a lot of paperwork that are time-consuming. These companies deal with a lot of data, which in most cases are very time-sensitive. They outsource their back office operations so they can dedicate their undivided attention to their core tasks. Furthermore, outsourcing data management, a type of back office operation, allows for faster turnaround time as most of the data is digital and can be accessed and processed remotely.

Media Companies

The digital era keeps on transforming the industry, creating more channels where people can access multimedia content and opening new growth opportunities for media companies. The ongoing digital transformation prompts media companies to outsource non-core business functions as a way of boosting revenue while reducing costs. At the same time, outsourcing also helps them effectively engage with their audience and boost their reach in both traditional and digital platforms. While they focus on producing and distributing multimedia content to grow their community, they engage with outsourcing providers to handle content moderation, community management, online marketing, and analytics.

Retailers and Manufacturers

Retail and manufacturing businesses need to compete globally and their margins are under constant pressure, so cost savings are essential to their survival. To keep their competitive edge, they cut costs by outsourcing their back office operations. Reduced expenses will result in increased profits that they can allocate to improve their products and level up their business strategies. Furthermore, many manufacturers already work with a global supply chain and may already have production facilities overseas. With that said, establishing an offshore operation for handling their back office is not going to be a big challenge to them.

Outsourcing companies offer scalable solutions that fit your business needs. To know more about how you can make the most of outsourcing, get in touch with MicroSourcing today. We'll help you identify your pain points and advise the best delivery models for you.


Top 8 Most Outsourced Back Office Functions

by: Sidney Liquigan

Wednesday, April 4, 2018 | Comments (0)

Category: Outsourcing Research / Trends

The ideal tasks to outsource are back office functions, as these tasks don't usually require an employee to be physically present to deal with clients. They can also be handled efficiently by an outsourced individual or team who have the right skill set and resources. Outsourcing back office functions can significantly improve your business operations and its strategic scalability as well.

Many outsourcing companies offer virtually any service that can be outsourced, but to give you an overview, the most outsourced back office functions include:

  1. Customer Support

    One of the first and most common back office functions that are outsourced is customer support. Call center services are outsourced to BPO companies to handle the increasing numbers of calls that a business receives. There are also contact centers, which handle email and chat support in addition to calls. Customer support is a popular function to outsource as outsourced call center agents are specially trained for this line of work. Customer support outsourcing makes sure that all your customers' concerns are addressed in real time.

  2. Data Entry

    More than copy-pasting data from the source to the destination data entry interface, data entry requires someone who has a keen eye for details and researching and analytical skills. This function is often outsourced to help you and your in-house team focus on the core functions of your business and leave the more mundane yet laborious and time-consuming tasks, such as data entry, to an experienced outsourced team to save you time and money.

  3. Human Resources

    For human resources, you can outsource the entire department or just a function of it, such as recruitment, employee retention, employee engagement, compensation, and performance management, to name a few. This way, small- and medium-sized businesses can have access to organized and streamlined HR operations and can take care of their employees without having to spend large amounts of money on creating your own HR department.

  4. IT Support

    With IT support outsourcing, you can also outsource a wide range of functions or even your entire IT facility. The most outsourced IT functions include network management, software development, hardware support, and help desk operations, among others. Aside from outsourcing IT support for your internal operations, you can also outsource tech support to handle your customers' concerns regarding tech products and telecommunication services.

  5. Payroll and Accounting

    Startups and small businesses take advantage of outsourcing their payroll and accounting functions to qualified and experienced professionals to free their in-house staff from worrying about committing costly miscalculations and errors. Payroll and accounting tasks are critical functions and time-sensitive and should be focused on by a specialized team of payroll and accounting professionals.

  6. PR and Marketing

    Small businesses make do with promoting their own brand to save on costs, but they don't realize that they are wasting a lot of money in DIY marketing but not getting significant results. Outsourcing PR and marketing tasks to experts will ensure that your brand, products, and services, are marketed in a strategic way across a variety of platforms. This way, you can effectively boost your presence without breaking the bank.

  7. Transcription

    Transcribing audio or recorded files into written formats is a time-consuming task and is best outsourced so that you can have the option of hiring a part-time or full-time transcriptionist for only a certain period when you need them. This saves you from recruitment and overhead expenses.

  8. Virtual Assistant

    Busy business professionals and small companies save on costs and overhead by outsourcing a virtual assistant instead of hiring an in-house secretary to handle administrative functions. Some of the tasks that a virtual assistant can do include managing your calendar, booking travel arrangements, managing your emails, and online researching.

If you are looking to outsource more than one function mentioned above, it is best to go with a one-stop outsourcing company so you don't have to outsource to and deal with different points of contact. MicroSourcing is a BPO company in the Philippines that specializes in various outsourcing disciplines that fit your business model and are adaptable to your own internal processes and requirements.


With a limited number of in-house employees with each having their respective tasks, startups can greatly benefit from outsourcing some of their business processes, including customer service. Not only will outsourcing save you on costs and resources, it also frees your in-house team from having to multitask and allows them to focus on their actual jobs, therefore improving your startup's operations. Additionally, outsourcing also gives you access to manpower and resources that specialize in the outsourced part of your business.

Before you outsource customer service, you should know that different outsourcing services offered by different outsourcing companies are not one-size-fits-all solutions. Customer service is a function that directly interacts with your customers; therefore, you should consider your options carefully to find the right outsourcing company that will handle your customer service tasks.

Here are some things startups should know and understand before outsourcing customer service. These will help you know the best practices in outsourcing customer service.

What Your Customers Need

Identifying the kind of service your customers need and find lacking in your current customer service efforts will help you identify what you need to outsource. Are you able to provide 24/7 real-time customer support? Would your customers benefit from 24/7 support? Outsourcing companies offer customer support services at any time you require. Outsourcing companies can build teams of customer service agents on day, night, and graveyard shifts to ensure your customers receive real-time support at any time.

Observe and take your customers’ feedback seriously to help you identify the right customer service outsourcing option for you, or if you should consider outsourcing customer service at all.

Profitability

Do you receive a large volume calls and inquiries from your customers? Make comparisons on the costs of outsourcing customer service versus having an in-house customer service team. Consider how long the set-up will take and the costs that come with it – construction, hardware, software, training, compensation, and maintenance. If you are receiving a large number of calls and messages from customers on a daily basis, it may be more efficient and cost-effective to outsource.

How Your Customers Communicate

While it's better to have all channels of communication open, identify the ones you actually need from the ones your customers don't use. From call centers, customer service outsourcing has evolved to offer customer support via different channels. Observe if your customers reach you by calling, by sending a message or posting a comment on your social media pages, by emailing, through chat, or through website orders and queries.

Language is also something you should consider when outsourcing customer service. With English being a universal language, look for an outsourcing partner that can provide you with customer service representatives who have excellent English communication skills. When outsourcing to offshore BPO companies, consider the Philippines for its workers who are known for being professional, hospitable, and are strongly affiliated with Western culture. But aside from English, there are also outsourcing companies that can provide you a team with multi-lingual capabilities.

Add-ons

Many outsourcing companies offer add-on services besides the actual outsourced customer service. When choosing a potential customer service outsourcing partner, compare each candidate’s service features, add-ons, and costs to help you identify where you can make the most out of outsourcing customer service and improve your ROI. Add-ons can include analytics, call recordings, and transcription.

Canvass the prices and see if it is better to acquire the features from one outsourcing provider or from multiple vendors. Also, consider what you only need. A package deal may seem appealing but consider first if your startup really needs all the services in the package.

Training and Onboarding

One measure of the effectiveness of your outsourced customer service team is how well they know your business, brand, and products or services. Choose an outsourcing partner that is flexible to absorb all the knowledge and skills required for upholding your business. Look at the outsourcing company's training and onboarding processes, as well as the resources (hardware, software, communication technologies) they have. This is important, especially for startups who require a team to learn a lot of technical knowledge. Don’t be in a rush to outsource and compare and consider your options carefully.


If you're looking to outsource your customer support and you are not sure whether it will be beneficial for your business, looking at the pros and cons might help you decide.

Pros of Outsourcing Customer Support

Cost-effective
Having your in-house staff to handle customer support can be expensive and counterproductive. They could have been spending their time on core business tasks, but instead, they are stuck in solving customer issues. This can affect your business' profitability. Building your own in-house customer support department can also be expensive. The cost-effective solution to this is to have an offshore managed operations.

Through outsourcing, you get access to a pool of talent with the right customer support expertise. Outsourcing to offshore BPO firms in countries with lower labor costs can save you money. Having your own operations in the Philippines would mean reducing 60-80% operational expenses in salaries and at least 50% in office rental and overhead costs.

Immediate Customer Support
Handling customer support on your own cannot assure that you will be able to attend to each query immediately. Considering you have other things to focus on, you may not be able to prioritize getting back to customer issues, which may affect the overall customer experience.

Unlike building your own customer service department, an outsourced customer service operation is much quicker to establish. Your chosen provider will already have the infrastructure, people, and processes in place to get you up and running in no time.

Scalable
As your company grows and increases its customer base, your customer support also needs to be more productive. Whether you are expanding your contact center company or forming a customer support department for your business, outsourcing is a scalable solution that saves you from the hassle of setting up and spending more money for additional assets and office space. Outsourcing can help your business grow faster. And when you need to scale down, having an outsourcing partner also makes downsizing easier.

Monitored Performance
Contact centers have the right tools and resources to ensure the effectiveness of its customer support agents and its services. They have KPIs and analytics in place to measure employee performance and monitor activities. With existing processes ready to be integrated with your operations, you don't have to reinvent the wheel and start from scratch. You are assured that your outsourced customer service team is well-facilitated, giving you a peace of mind and allowing you to allocate more time and money on core business activities.

Cons of Outsourcing Customer Support

Language and Cultural Barriers
Some businesses are hesitant to outsource their customer support to offshore companies as they fear that offshore customer support representatives may lack the fluency and cultural knowledge to communicate effectively with your customers. This concern can be easily avoided by sending clear and specific requirements. When outsourcing your customer support, remember to include in your requirements that you would need someone who can speak a certain language fluently or is multi-lingual and has a neutral accent.

Choose an outsourcing partner that has language and communication skills exams. Also, choose a partner that gives you control of the screening process and allows you to conduct additional processes, such as accent training.

Many foreign businesses outsource to the Philippines for the Filipinos' familiarity with Western culture and proficiency in the English language.

Detachment
Another concern among clients is that customer support agents located in offshore contact centers may tend to be detached or unfamiliar with their company culture and values. This can affect the level of commitment and service they provide to customers. However, a good outsourcing company will always make sure that the service level is always in line with your company standards and has policies in place that reflect your company’s culture and values. Choose an outsourcing provider where you can be directly involved in operations and heavily engaged with the employees.

Managed Operations vs. Traditional Outsourcing

At MicroSourcing, we follow the managed operations model. It is different from traditional outsourcing in a way that the managed operations model gives you full control of your offshore operations with us. It's having the best of both worlds of outsourcing and incorporating. With this model, you are partnering with us to provide you with facilities, assets, and HR and recruitment, among many other services, while you keep full control of the operations. This way, you are involved in hiring the best customer support agents and you get to implement your own systems and policies.

Conclusion

Outsourcing customer support does come with a few risks, which can easily be mitigated by making sure to give your outsourced operation the time and effort it requires to make it an integral part of your business. The advantages far outweigh the disadvantages, which is one of the reasons why the customer service outsourcing industry in the Philippines remains strong.

With the managed operations model, you can ensure that your outsourced team is being effectively managed both by you and by us. Being directly involved with your offshore customer support team allows both parties to keep track of activities and also helps you identify the team’s strengths and areas for improvement.


Whether you have a B2B or B2C business, customer service is an important part of your business. It drives customer retention and loyalty, as well as profitability. No matter how minor, customer service mistakes should be taken seriously and addressed immediately. A mistake may not be impactful at first, but if it persists, it could be a reason for your customer to refuse to renew with your company and switch to a competitor instead.

Customer service mistakes

To keep your customers happy and loyal, be aware of the customer service mistakes that you didn't know affect your business.

  1. Complicated Processes
    If it requires customers to put a lot of effort to do business with you. It will be most likely that they will eventually get exasperated and find a better service provider. Even if you have the best products or offer competitive rates, the hassle of the process will be a deal breaker.

    How to Avoid: Review the processes that your customers have to go through to acquire your products or services, from the registration and communication up to requests for returns/exchanges and warranties. Review previous customer feedback to learn about your customer's experience. Look for the obstacles and take action to make it better. Is it poor communication? Difficult website navigation? If the registration or purchasing process itself cannot be simplified, then make sure to set customer expectations early and to manage them well by communicating with them better.

  2. Poor or Inconsistent Overall Customer Experience
    Providing excellent customer service does not end with delivering high-quality products or services. There are many other things that make up the customers' overall experience. Sure, you were able to satisfy their need; but if the service was slow or the customer service representative was rude, it will result in a negative experience for them.

    How to Avoid: Establish an organizational culture that prioritizes providing excellent, proactive customer experience that goes beyond your core product or service. Make sure that every little detail that involves your customers is well taken care of.
  3. No Multiple Service Channels
    Directing potential customers to your contact form or online store for the initial communication or purchase is understandable, but once they need to follow up, you must be able to communicate with them through different channels. There will be customer concerns that are more effectively addressed through the phone, and forcing them to contact you via chat or email only won't suffice. This also involves accessibility. You must be able to cater to all of your customers, especially those with certain difficulties with hearing or reading.

    How to Avoid: Offer multiple channels where customers can reach you through different options that they're most comfortable with. Have customer service representatives ready to answer calls, chats, and emails. Many customers also like to reach out through your social media channels – by posting on your feed, leaving a comment, or sending you a private message.
  4. Automating Everything
    Having parts of your business processes automated can be cost-effective and produce a faster turnaround. However, what makes a great customer service interaction is the empathy and personalization that an actual human interaction provides. Many customers still prefer to have the option to talk to a real person, especially for complex issues.

    How to Avoid: In addition to having chatbots and answering machines, employ contact center agents to answer calls and messages and provide personalized solutions in real time.

  5. Setting Unrealistic Expectations
    Customers want solutions that are accurate and efficient, and they want it now. However, there are just things that cannot be realistically delivered quickly, or not in an ideal way. But when they call your customer service representatives, there is always a script to follow and not all information will be available, resulting in escalations and an irate customer.

    How to Avoid: Make sure that your customer representatives actually listen to your customers and that they have access to the right information. Set realistic expectations and not over-promise then under-deliver.

Handling customer concerns may tend to be delayed or neglected when you are focused on the core aspects of your business. To make sure providing an excellent customer service experience stays a priority, you can outsource a team of customer service representatives or contact center agents to focus on providing undivided attention to your customers and giving them realistic and effective solutions. Be proactive and avoid customer service mistakes, or fix them immediately as they happen. Don't wait until your customers choose to switch providers or give you a bad review.



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