The Philippines is currently the next hottest destination for business process outsourcing after India. There are several call centers and other business process outsourcing ventures operating in the country right now. A proof of this is when you look at the classified ads section of every Philippine newspaper, you can notice that more than half of the available jobs pertain to business process outsourcing. Another proof of this is the growth of our export sector despite the dwindling dollar. With these in mind, it looks like getting into the call center business will be very lucrative.

With these developments in mind, we initially thought of getting into the call center business. However as we extensively studied the call center business there are several things that we learned that dispelled our misconceptions about call centers and they are the following:

1.) A Call Center business still follows the traditional business processes - A misconception about putting up a call center business is that it spells instant big bucks in a short period of time. This is definitely not true. While it is true that the demand in the market for call center is so huge, however it does not necessarily translate to instant profits.

According to the study presented to us, it is only in the second year that the call center starts to profit. In the first year, losses or a break even has to be incurred first. This is similar to any kind of business. You can't expect to profit immediately. There is a window of time where sacrifices have to be made. Just like any traditional business you have to have a good management team. A lot of small time call center operations have been shutdown due to bad management. Most importantly your Human resource has to be very good as this is one of the most important departments of the call center operations.

2.) Running a Call center requires intensive Capitalization - There are those who believe that putting up a call center requires only a very small amount of. They think that you can just just rent a small space and link together a bunch of computer in a network and to the internet and then start operating. Operating a call center is not as simple as most people think. You have to burn a lot of money. We were told that the dialing software alone cost more than a million pesos. Aside from the computers themselves you will have to get licensed copies of Windows XP plus you have to set up other stuff like your server, ensure that you have a good, stable internet connection and buy the i.p telephones that agents use.

3.) Call center operations requires intensive marketing - Some people think that because there is so much demand for call centers they can just build a call center and expect clients to come. This kind of thinking is very erroneous. Clients are not just looking for "call centers" per se. They are looking for reputable call centers. Call centers that can deliver services that their clients wants them to deliver. As a new player, you will have to establish yourself as somebody who is reputable.

Big names in the industry have no problem establishing themselves as reputable. They easily get clients because they have a name. Small players players still have to prove themselves, so they usually go for the outbound. (By Outbound we are referring to call center agents calling persons abroad trying to sell something or offering a service whereas inbound refers to catering to the needs of already existing clients of big companies who outsource their customer support to call centers.) There is no question that money can be made in outbound calls. However take note that most outbound agreements are performance basis. So if your agents sell a lot of products you make a lot of money, but if they don't then you loose. It may take a while for small players to show the client that they can be trusted with the outbound before clients give them the inbound.

With all these in mind, before you jump into the bandwagon of the business process outsourcing industry especially call center operations, think before you leap !

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Zigfred Diaz may not write about business process outsourcing always, however his insights on business are interesting. He also has some great articles financial management and How to invest in the Philippine stock market.