Michelle Fiegehan – The Competitive Edge of the Philippines as an Offshore Destination

Derek: Hi, I am Derek Gallimore and this is Outsource Accelerator.  This is our podcast and today in Episode #103,  I am having a chat to Michelle Fiegehan of Yempo Solutions so I have had a previous episodes with Michelle she’s a ball of information, you can learn a huge amount from her, she’s got a lot good corporate experience if you want to know more about her journey then go back and listen to Episode 87; if you want to hear me digging into her business (her business model which is Yempo Solutions) which is an outsourcing service provider then go and listen to Episode #93. And today we talk more broadly of Michelle’s experience, I tap into her business insights and you know we have germanely good old chat and there is a lot of valuable information in there for you so if you want to get in touch with Michelle or get any information about this episode then go to out show notes at outsourceaccelerator.com/103.  Enjoy.  

Derek:  Today, we have Michelle Fiegehan with us, she has appeared in a couple of episodes prior where we explore her journey in terms of outsourcing and her corporate background. And then we also dig into Yempo Solutions so now I want to talk more broadly with Michelle about outsourcing the Philippines and the business applications for that. So, hi Michelle! Welcome back and thanks for your time.

Michelle: Hi Derek, thanks! It’s great to be back again.

Derek: And for those who haven’t listened to the prior episode can you give us a quick background about how you found yourself here and what you are involved in now.

Michelle: Sure, so i’m Australian and in my former corporate life I was an IT Engineering Manager for Macquarie Bank which is Australia’s largest financial investment bank. Back in 2009, they asked me to head to Manila to start an IT Engineering function for them offshore for 3 months. My 3 months turned into three years, then I headed off to India and after a year in India I decided I wanted to do something a little different; so I packed my bags and came back to the Philippines and decided to start my own business. Initially started here in Cebu, which is where I live, but i’ve got a couple of locations in Manila as well now.

Derek: Ok so I want to start of, you with Macquarie you saw outsourcing from many different size but you spent a year in India and then you returned by yourself to the Philippines. Why did you choose the Philippines over India as your outsourcing future?

Michelle:  Wow, that’s quite a story there… I’ll try to keep it brief when I moved to the Philippines I’ve always wanted to live and work offshore and the Philippines was my first offshore location and I absolutely loved it, I really enjoyed my job, I really found I was learning as much about myself and Australian culture as I was about Philippines culture. And I discovered that really rich social network in the expat community here. I’ve actually written some articles on Linkedin about concept of community and how different the concept of community is to me from my Australian life versus what I experience in the Philippines.  When I went to India, it was a little bit of a different story. I was managing a global team across many many time zones and I was also required to travel a lot to visit the teams in London and New York, Manila, Hong Kong so I didn’t actually get to spend a lot of time at home in India which meant I didn’t establish a social network (a personal network); I didn’t really have any friends there and also, sad but true, life for a single female is a little bit tougher in India quite a bit tougher in India than is in the Philippines.

Derek:  Interesting! Amazing! So in terms of the outsourcing aspect of India, did you get to know that and can you sort of offer insight into that? Because India is, I suppose, the competitive equal to the Philippines I think they employ about 3 million people in this sector. I suppose of out 1 million people here but do you, germanely, have any sort of comparative insights?

Michelle: So, one of the reasons when I was in Macquarie, one of the reason we went to India in the first place firstly we’d introduce an element of risk into the organization. And there was quite a high dependency on our Philippine locations and it’s a bank obviously, sound stable 24/7 infrastructure is required and they felt it was prudent to have a secondary site which is why we went to India. That’s the primary reason but there also were some skills that were quite difficult to find in the Philippines. Some specific technologies that were more readily available in India than they were in the Philippines, so we’re looking for some of those skills in that market. I hired some fabulous people in India, some really talented people, friendly, culturally a good fit for our organization. It was, from a professional perspective it was, a very rewarding experience – my time there. But there is big difference between the Indian worker and the Filipino worker and, for me, particularly for smaller companies who might be outsourcing for the first time the reasons that they would prefer to choose the Philippines is the english language capability is very very good. Culturally, they were very — of course Filipinos have their own very strong culture but they have become very adaptable, they’ve had Spanish, American, Japanese influence here and they’ve very very adaptable and a very good fit for Western business etiquette compared to India which has such a very very strong culture of its own and some of those cultural aspects are a little bit more difficult for Western workers to understand or to relate to and then. Of course, the strongest deterrent, unfortunately, for the Indian market is they were the first entrants into, particularly the call center industry, and many of us had bad experience in those early days. They’re much better now! The Philippines has been able to leverage a lot of the learnings  from how the Indian market handled call centers; but I think as a result the Indian accent isn’t as palatable to us as the Filipino accent.

Derek: It’s interesting when you say there are many people, you know, there’s a scour when they think about call centers when they call the bank and it’s a foreigner in the end of the phone. And it’s probably their entire experience is marred by the experiences people had sort of 10-15 years ago where is the entire service provision and industry worldwide as moved on a hell of a lot since then maybe people need to kind of update their reference point that is certainly a concern and it holds a lot of people back from outsourcing. I think, because of that kind of historic experience people have had with call centers it left a bit of scar on consumers, I think.

Michelle: I think so, I think also that the call – I’m not in the call center industry so I’m speaking a bit out of my area of expertise; but as a person who frequently calls call centers I think there’s still a lot to be learned with a call center of any nationality. What frustrates us the most is the diligent script following; and I think that’s all about lack of training and lack of empowerment of the worker to use their common sense when it comes to how to respond to someone on the other end of the line.

Derek:  Yeah, it’s difficult with call centers because that’s a singular touch point and yet speaking to someone where they need answers on the go. And you know there’s one person that actually have to represent a multinational conglomerate with many set of moving parts in some respect. And whether, you know, they’re base in the US, UK, India or Philippines is actually quite a hard role to serve a needy customer and at some point you know disgruntled customer. It is actually quite a difficult role to create the processes to make that a seamless experience.

Michelle: It really is and it does require a lot of training because each of us in a different cultures have difference responses to stress and conflict. So, if you ticked off and you’re calling another Australian and you raise your voice and you become very clear and assertive the person on the other end of the line while maintaining that level of politeness will become equally clear and assertive. Where as, if you call someone from an Asian background and you start to get a bit firm in your language and firm in your tone; their natural response is to bring harmony in to the conversation by being more calm and more quiet and start calling you Ma’am or Sir which tends to certainly — it may press the wrong buttons.

Derek: Yeah it’s difficult! It’s one of those sectors I think is very difficult to do well and basically isn’t it you know it’s a very very complex sector. And so, where do you see the future of outsourcing going then? In the Philippines it’s a high-growth sector it takes about 10% GDP. I think there’s a huge growth potential because of technology bringing the world closer together we have recently done a white paper which I’m going to release on the website soon. But there are 35 Million SMEs in the high cost english speaking world and no where near 35 million SMEs are outsourcing yet; and I think, at least, every SME really seriously need to consider outsourcing. So, do you see a big growth in outsourcing and what is the potential there for businesses in the Philippines?

Michelle: Absolutely, I think there are massive opportunities for the very small businesses to leverage outsourcing for their own business success. Such as the companies that have high streaks locations, very very expensive real estate with workers sitting in there that have absolutely no requirement to be in that location, classic example I can think of and I know some of them do – but real estate offices, they often have someone running the rent roll and that person never gets out of the office often doesn’t meet anyone, doesn’t go and meet clients. I know from my personal experience of renting out properties and being a tenant in properties, I never met that person they could’ve been in another country and save that small firm an absolute fortune. So, definitely I think that there are opportunities that the larger companies really forged the way in outsourcing and I think it slowly sipping down in to those small to medium enterprises; but there’s a massive body of small businesses that haven’t tapped in to the benefits yet.

Derek:   Why don’t you think more people outsource?  Is there a concern apprehension?  Is it just a knowledge gap people aren’t aware of it?

Michelle: I think the number 1 reason companies don’t outsource is they just don’t realize how easy it is. I have a couple of clients who are very small businesses and they do have only one person with us and that’s the feedback I get from them if I wished I’d known about this 5 years ago I wish I’d know how easy it is and I think that’s part of what you’re doing and raising the profile of those of us who run businesses here that’s the message we need to get out. It is so simple and you don’t have to have line of sight of your employee to get good result. You work with the business partner that you trust and you’ll have a high caliber resources working in your firm that are absolutely dedicated and committed to your business and delivering the results you need.

Derek: Yeah it’s interesting you know as a part of our messages I suppose, we just tell people to get started don’t overthink it. If you’re a billion dollar company and you’re going to hire 200 people you need to do some analysis. But, I think as you said analysis-paralysis for smaller companies, there’s a lot lower risk for getting in to outsourcing because the cost is so much smaller. If you’re going to hire a $200,000 highly skilled person in Australia, then you really need to think about that like it is sort of strategic risks in taking someone on of that cost. But in the Philippines, I think there’s an opportunity to just get started with a VA (Virtual Assistant); the whole relationship could cost you 4,5,6 7 hundred dollars a month but then it just opens the door to you first experiencing outsourcing and getting on that journey.

Michelle:  One of the things we did when we started Yempo when we built our operating model and I had to confess and tell my clients is as well we didn’t look at other BPO’s upgrading model and how they cost it how they prices are. We didn’t look at any of that when we started Yempo, we build everything from the ground up on what we thought made sense for what we could offer and the type of client we were attracting. So, we did two things, the first thing was we make it as easy as possible for clients to exit Yempo there’s no long term contract, there’s 30-days notice, there’s no fees held it’s as easy as possible as easiest we could make it within confines of the local labor code to exit our arrangement because if it’s easy to get out of an arrangement with us then it gives people more confidence in getting in to in the first place. And the second thing we did, we don’t collect there’s no deposits, there’s no huge advance payments we do everything on a 30-day invoice basis so that people can build some trust that we are reputable and ethical.  I think if I was a little business owner sitting somewhere, it might be a bit scary to hand a slab of money over to somewhere overseas someone you’ve never met and you don’t know what’s going to happen to it. So, we make it easy for people to get out, easy for people to get in and we also a very fortunate in having almost all of our clients (I can’t actually think of one on the top of my head that wouldn’t, but all of our clients) are prepared to be verbal or written referees for us, so that helps us well I think that helps break down the anxiety about embarking on a new offshore journey.

Derek: Yeah it’s interesting isn’t it one of our messages again is that people need more stepping stones is to quick have a long sales cycle between getting someone knowledgeable at outsourcing and then integrate into an outsourcer or a BPO. Because, I call it the $100,000 conversation typically a BPO wants, in ideal world, want 2-year contract they want 2 to 3 seats, so you’re actually going from 0 to a $100,000 conversation and people need easy a stepping stones and little bit more assurance than that. Because in these people mind, it’s a country a long way away it’s scary that a lot of unknowns and you actually having to deal with humans as well as human resource which can’t be taken lightly so it’s good that you try and provide those stepping stones because it really is just about getting started a lot of the time isn’t it.

Michelle: Yeah, absolutely.

Derek: Fantastic! Thank you so much, Michelle, and if people want to get in touch with you, of course, it Yempo Solutions it’s your source of outsourcing service how can they get in touch with you and learn more?

Michelle: They can find our website at www.yempo-solutions.com or they can email me at [email protected]

Derek: Fantastic! Of course all of that will be in our show notes, Thank for joining us Michelle

Derek: That was Michelle Fiegehan of Yempo Solutions, if you want to get in touch with Michelle for any reason whatsoever then do so you can find all of her contact details and our show notes at outsourceaccelerator.com/103 and if you want to ask us anything then just send us an email to [email protected]. See you next time.