Haiyan effect: Location prioritized when outsourcing customer service

OABPO Blog Team Published on November 25, 2013

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The Philippine BPO industry may not have suffered massive physical and operational damage from super typhoon Haiyan, but the disaster did affect investors who are outsourcing customer service to the country. The catastrophe has prompted companies to fortify their business plans by giving higher importance to strategic locations.

The typhoon that wreaked havoc on Southern regions spared Metro Manila, where the majority or 65% of the nation’s outsourcing firms operate. This left $16 billon’s worth of IT and customer service processes generally safe, including those being operated in areas such as Cebu and Davao that are only slightly affected by the typhoon.

Businesses with alternate locations in the capital and Southern regions are the ones that saw the least damage, and their example helped investors realize the importance of having multiple business sites in the Philippines. This enables operations to continue in other offices even if one location is rendered inaccessible or inoperative by a natural calamity.

Businesses planners, however, admit that avoiding operational halts brought by unforeseen incidents is more practical than lowering damage by allowing the destruction focus on one location. Tactically situating businesses in an ideal, calamity-prone area is still the smoothest route to take before outsourcing customer service to the country.

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This may have contributed to the development of IT parks in Davao and rise of office space occupancy rate in Metro Manila. Davao is being groomed to be the next outsourcing hub after the capital region, as investors see an asset in the city’s safe location and abundant workforce. The exodus to the South doesn’t seem to give a blow to Metro Manila’s property sector though; in fact, the metropolis has outpaced the rest of Asia-Pacific in terms of office space absorption.

Despite precise planning, however, prime locations can still be vulnerable to disasters.
“In the outsourcing industry, the main issues are not loss of life or property damage. The main issues are absenteeism due to family issues or volunteer work and also intermittent power grid issues,” said Gartner’s Vice President for Research, Frances Karamouzis.

What Karamouzis said is more than just a claim, but an actual truth that many saw in the midst of Typhoon Haiyan’s onslaught last November 8. Operations did go undisturbed, but some employees were unable to report to work due to transportation unavailability and problematic conditions the workers had in their respective homes.

The issue shed light on the importance of the government’s role in mitigating the effects of weather-induced concerns as well as the communication between private companies and the public. Large outsourcing vendors and associations are compelled to issue a public statement to avoid leaving their clients and local government units in the dark.

“This highlights the importance of considering the effectiveness of the government in a region under consideration as a sourcing location. After all, laws in and of themselves are no good without enforcement. A government’s self-commitment is heavily weighed against how corrupt the diversion of funds is taking place,” said Jerry Durant of consultancy firm NeoGroup.

The super typhoon brought about the awareness that heightened prevention and recovery measures of private individuals and businesses alike, but choosing the ultimate location is just the first step of the overall plan. This has to be well-executed using communication and cooperation between the business sector, the public, and the government.

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