In this podcast, Derek is interviewed by Henry Acosta of Outsourcing and Offshoring Philippines podcast. Derek will walk us through how he started his company, Outsource Accelerator and his take on outsourcing in the Philippines.
- Derek has 4 range of businesses over 20 years and he is an entrepreneur by heart.
- He started outsourcing to the Philippines 7 years ago and he shared that was his ‘ahuh’ moments in terms of business.
- Derek shares what Outsource Accelerator does for their clients.
- He travels a lot so he is used to remote working, and remote teams. As a result of that, he really has the mindset of looking at and using the planet’s resources – the best employees, the best skills that he can find anywhere on the planet.
- Derek calls the Philippines the “Switzerland of banking” for outsourcing.
- Derek also talks about the disadvantages of outsourcing; Outsourcing is not a magic bullet and it does have its own issues.
- According to Derek, it’s good to get a little bit of orientation first about outsourcing so that you can integrate outsourcing into your business.
- In outsourcing, the world is becoming one place and it is incredible how fast that’s changing.
- The Philippines has a huge advantage over any other outsourcing nation, the key reasons for that is that they are culturally aligned with the Western Culture.
- Technology is breaking down the relevance of geographical distance and it’s breaking down the relevance of borders.
Derek: Hi and welcome to another episode of the Outsource Accelerator podcast, this episode number 109 my name is Derek Gallimore and today we have something a little bit different in that I was a guest on the Outsourcing and Offshoring Philippines podcast so I am replaying that interview from a few weeks ago. On this podcast now the microphone is obviously put on me this time and I am answering the questions so hope you enjoy this and please give me any feedback if you have any. All of the show notes will be of course at outsourceaccelerator.com/109. Enjoy.
Henry: Hi you’re listening to the Outsourcing and Offshoring Philippines podcast and I’m Henry Acosta. Our guest today is Derek Gallimore of Outsource Accelerator, Derek is the founder of Outsource Accelerator and he’s joining us today to talk about his company, what they do and who they are. Thanks for coming to the show, Derek.
Derek: Hi Henry really excited to be here.
Henry: Yeah Derek thanks for coming and can you tell us a little bit more about yourself and how you got started and involved with a BPO industry?
Derek: Sure would love to, so I’ve been in business generally like a 4 range of businesses for about 20 years and I’m an entrepreneur at heart and it’s about 6 years ago no sorry about 7 years ago that I started outsourcing to the Philippines that was one of my biggest ‘ahuh’ moments in terms of business where someone recommended that I try sourcing staffing overseas in a cheaper environment and at the time I needed 24/7 customer service support for my company based in London and that just won’t economically viable from the UK so I looked into outsourcing to the Philippines and as I said it was my it was a pit, it was my ahuh moment and I started with 1 staff quickly went to 3 staff, got 24/7 cover and it was just incredible. So from that point where I ended up building an entire office in the Philippines I had about 70 staff in the Philippines and effectively almost flipped the pyramid upside down this is over a number of years of course but it basically flipped the pyramid upside down where we had the vast majority of the companies team in the Philippines running the UK company so that was super exciting. So how did I get here with Outsource Accelerator? so I’ve had an office here for about 6,7 years I have personally been living in the Philippines for about 4 years now and I’m just addicted to this outsourcing thing and I really want to spread the gospel and spread the word of how transformative outsourcing can be peoples businesses, so I started the outsource accelerator in response to that need and to basically it’s all about informing people getting people aware of outsourcing and then helping them down that path if it’s suitable for them and their business.
Henry: Yeah and to be honest when they hear Outsource Accelerator I only get a small idea of what you guys do I’m not exactly sure what it is but can you tell us what you guys do and what do you do for your clients?
Derek: Absolutely, so Outsource Accelerator is a little bit different in that we are a consultancy but more than that we’re fast becoming the world’s most authoritative resource for outsourcing and offshoring specifically to the Philippines so it is our ambition to get as many people interested and into outsourcing as possible so we remain fully independent, we aren’t a BPO or an outsourcer, we are just basically providing the information that people need to help them on their outsourcing journey. We provide a huge amount of free information on the website we actually have our own podcast which is Outsource Accelerator podcast, we have huge amount of guides and blog how to close and infographic and basically we are just providing as much information to get people on that outsourcing journey as possible and then also if people want to take a step further or they want a fast track their outsourcing and implementation then we also a consultancy package so that’s what we do at Outsource Accelerator.
Henry: Yeah it sounds like you guys do a lot of interesting work that helps out a lot of people and their businesses and it’s great having fellow podcaster on the show with us today.
Derek: Yeah, tell me about it, it’s an amazing world.
Henry: I’ve actually read on your profile online that you’ve been in different parts of the world like around Asia is that correct?
Derek: Yeah absolutely so I was actually in a really quickly born in UK, I was raised in New Zealand but then when I was 18 I moved to Sydney in Australia and then I pretty much went back to London when I was 20 I lived in London I built a company there and then I moved back to Sydney and I was effectively running a UK company with the Philippines office and I was sitting in Sydney so I’m you know used to remote working, I’m used to remote teams and as a result of that I really had the mindset of you know there are 7 billion people on this planet and many of them are earning under a dollar a day so I’m looking at using the planet’s resources the best employees, the best skills I can find anywhere on the planet and that is what outsourcing harnesses because you know most people have the mindset of basically recruiting the best staff they have within their home town and that really limits things so yeah I’ve traveled extensively and I’m kind of mainly based in Manila now and I spend part of my time in London so you know the world is becoming one place it’s really quite incredible how fast that’s changing.
Henry: Yeah you can actually say that world is a smaller place because of the technology as well. I was going to ask if as we like the Philippines kind of chose you and the reason for that is there countless countries that offer BPO services just like the Philippines but I’m sure you have seen in your travel but what made you end up choosing the Philippines as the place to go to?
Derek: Yeah I mean it’s a great question prior to outsourcing my team to the Philippines, I tried India, I tried a bookkeeper in India and nothing against India, it just didn’t work so well to give people a bit of a background in outsourcing, outsourcing is only about 20-25 years old now and it was basically enabled because of cheaper telephony and then eventually the internet which basically enabled cross country work to be produced and as telephony got cheaper and there’s internet got faster and bigger bandwidth more and more functions could be done and so the Philippines and India basically were the beginning of outsourcing and so with that you have a huge amount of experience in these two countries and they’re effectively I call the Philippines basically like the Switzerland of banking for outsourcing. You get the best of the best in the Philippines and they have 25 years of executive experience to back it up now why do I choose the Philippines significantly I think the Philippines has a huge advantage over any other outsourcing nation and even India the key reasons for that are they are super aligned culturally aligned with Western Culture they were the better or worst colonized by Spain 500 years ago that brought Catholicism to the Philippines and not getting religious or political but basically that is created a culture alignment with the west that none other of the countries certainly in southeast Asia or India have alongside that there’s an incredible level of English here you know right down to the sort of blue collar workers and taxi drivers and also the Philippines has about 1/3 of the population is 20 years of age or younger so there’s a very vibrant youthful population and as people realize now and certainly is happening here, people the youth being bred on a diet of Youtube and internet media and popular media and all of these is very internationalized, very specifically Americanized and so you getting especially the younger they’re super super culturally aligned to the US or certainly western culture which means that you know it’s just a fantastic opportunity to find really world lived really well-educated people here in the Philippines that are super motivated to do well and build their careers.
Henry: Yeah and the guest I’ve had in the past and the people who are outsourcing here that I’ve talked to actually they’re really shocked by how good the English are out here and they’re really surprised by how good and competent the workforce the Philippines can provide.
Derek: Yeah it is it’s really amazing you know and basically outsourcing is popping up in every developing country where cost are lower then there’s a reason that outsourcing should and could happen there but the reality is that the Philippines has a 20,25 year head start on all of those countries so if you’re looking for sort of higher complexity outsourcing or the more comprehensive BPO which is business process outsourcing then you are not only buying into outsourcing but your buying into that 25 years of operation experience that the Philippines has so again it’s like the Switzerland for banking for outsourcing but then also the Philippines is quite unique in terms of its culture alignment and the adoption of english, it’s almost you know native tongue english now and certainly is more and more with the younger kids so yeah it’s I think a huge opportunity
Henry: I’ve actually noticed the some little kids, they grow up speaking English really well for some reason some people and their families some kids grow up talking with English as their first language.
Derek: Yeah it’s amazing and you know again this is the whole concept that I want to get through to people that they really need to embrace outsourcing because it is happening because technology is breaking down the relevance of geographical distance and it’s breaking down the relevance of borders and you know people now don’t learn how to be a good coder or developer or you know whatever Social Media Manager at University. They learn all of that online, so you’re gonna get the same person sitting in Manila, Philippines as you are in Silicon Valley at 13 years of age they’re all gonna be looking at the same blog posts, they’re gonna be looking at the same Youtube tutorials, they’re gonna be speaking english to the proficiency but the average salary here in the Philippines is $300 a month or certainly for the blue collar workers and the average salary in Silicon Valley is about $6,000 a month, so you know what you’re getting is a leveling of the plane field because now more and more you have exactly the same skill access to skill levels you do in the Philippines because people are able to self-educate and yet the living expenses and basically cost of doing business in the Philippines is so so much cheaper so I’m really excited for the Philippines because it basically levels the plane field and like no other time in history it gives people the opportunity to earn money based on meritocracy based on their skills as opposed to the lottery of where they were born or where they’re sitting or what University they went to so it’s super exciting and a huge opportunity for the Philippines but also huge opportunity for employers that are sitting in whatever the west in a high-cost place and they wanna grow their business they wanna build the skill based of their employees but they can’t afford the 10,000 thousand dollars a month that cost a higher developer in whatever city their sitting in so super exciting.
Henry: Yeah we’ve been talking so much about the advantages of outsourcing here in the Philippines and how it’s so great but well we just want to keep things in perspective so can we talk about what the disadvantages are the consulate outsourcing here in the Philippines.
Derek: Yeah absolutely and so I’m happy to talk about the disadvantages and the cannot be looked over. Outsourcing is not a magic bullet it does have its own issues and the reality is you on the face of it you can save about 70% 80% even on your staffing costs but there is extra friction in there and you know the reality is you have a remote team if your outsourcing to the Philippines and there is a friction in that our culture differences that you need to be aware of and sort of accommodate those in to your advantage, again this is a point of friction so if we are clear about this, if the costs were the same then the ideal would be to have your team sitting in your office from your hometown in your hometown that will be the ideal but you know the reality is when you can save 70 80% then it means that it opens up a huge amount of other opportunities. When you can save such money there are these point of friction and that is the fact that they are remote so you only really have a relationship over skype or email, there are cultural differences that you have to learn to navigate there are these things and things are built a little bit differently in the Philippines so you don’t get the same level of efficiency but again we’ve factor all these into the pricing and then ultimately you’re looking for a net gain and that is what no certainly you aspired to do when outsourcing because that’s the only reason why they justify it so the net gain should hopefully be a cost saving of you know 30 to 50% but then the really exciting bit and again I don’t want to just talk about the advantages but the really exciting bit is it’s not just about saving costs, it’s about the potential you can do when you take outsourcing to its fullest so it’s not just about getting the same cheaper but when you have access to cheaper resources and skilled resources at an affordable price then you can start asking yourself what else can I do can I build new products can I do extra research, can I build new market places and you can literally have an army working for you that your competitors don’t and that army then create the basis of your strategic in competitive advantages so sure, come start outsourcing to save money but the real exciting bit is when you’re building out your team and you see that you can harness a huge amount more strategic advantage such as a competitive advantages so yeah it’s you know the net result is benefit but there are disadvantages definitely and again that’s why if I could blow the trumpet of Outsource Accelerator it’s good to get a little bit of orientation first so that you are helped to integrate outsourcing into your business.
Henry: Exactly the reason why people should listen to our podcast and actually consult with you guys Outsource Accelerator.
Derek: Absolutely, because I mean you Henry are probably aware of yourself that you know outsourcing is a huge thing in the Philippines, it’s a big big employer and people that work in the outsourcing industry they you know go from outsourcing job to outsourcing job so when you get a new client it’s nothing new for you but typically when someone start outsourcing so someone comes from the west and they begin outsourcing it’s all new to them and the irony is that is actually the business owner, the skilled guy you know you might be super wealthy, super successful, super profitable in his home country but when he comes and start outsourcing he actually the student and he goes through these learning process and so it takes a little bit of coaching, a little bit of education so that they don’t do the same mistakes and so they don’t have the growing pains that everyone else commonly does so you know ironically, it takes a little bit of training the trainer if you will and that’s one of the services that we certainly can help.
Henry: I’ve actually notice that when people outsource here and when it does actually get fully utilized properly or when it gets used to it full potential a lot of them bringing out their employees to their main headquarter wherever they are from that could be from the US, UK or Australia and it’s amazing how much they start, how much care they start putting out here and to their employees all the way out here in the Philippines and it create sort of I don’t really want to say family environment but it’s sort of a culture that is leading towards something like that.
Derek: Yeah it’s incredible, I mean I would take this step further and say it’s a bit like smoking crack, you’d get people that are first and this is a cycle that I kind of tell people happens and they’re like no, first of all people are scared of the Philippines, it’s a country a long way away they’re just here about bad news, bad media they think that outsource might be like sweatshops and stuff like this, there’s ethical concerns and then eventually they might start outsourcing their accounting or you know get 1 bookkeeper they find that that’s okay, they might get 1 or 2 people or part time person to help with the customer service they find that that works out alright but then they have the bug and so then they hopefully if you can get them over here they come over here they see how fantastic people are, how incredible the facilities are and how big the opportunities are then they build the team and then they want more and more people you know and it becomes almost like this fascination with the opportunities that outsourcing presents and then they started 1 person and then quite often they can have bigger teams in the Philippines than they do in their home countries which I find absolutely you know incredible and that’s exactly the journey that I wanna just help people start because I know that it’s an amazing journey once you start it and then if you carry on along that journey very commonly you see people in BPOs with 20 30 40 staff and then the next stage is that they want to go out on their own they want to incorporate and then often they think that they can start their own BPO why not have a few extra seats that they can offer to their fellow business friends so you know this is a very sort of common part that we see and i’m sure you see that as well and for me the biggest hurdle is actually just getting people past that fear of you know like Philippines is a scary different place, it’s not and just getting them beginning that journey so that’s where Outsource Accelerator is involved. One other thing as well if I can talk about this one of the disadvantages of outsourcing is again people I suppose expectation of outsourcing, there are unfortunate cases where people hire someone and they don’t workout and this is very common whether it’s in your hometown or outsource or in the Philippines and it doesn’t workout they’re not great people or maybe didn’t have a lot of great direction in the start and then it becomes a disaster and my concern then is that people then brand outsourcing or the Philippines or Filipino workforce as a disaster and you know this is the biggest sadness I see is that they’ve tried it once, they had 1 person that didn’t workout then maybe didn’t best enough time upfront in training the people and didn’t workout so the whole thing is a waste of time and it’s terrible and so again this is where it’s important to set expectations and to set them on the right process and to say look invest a bit of time upfront invest in this person and do it right and you know and it will workout and as well there are different things to consider so you have to plan this properly you know the risk is otherwise that just sometimes it doesn’t workout and also some staff don’t workout but don’t then just right off the entire 110 million people sitting in the Philippines don’t right off the entire construct of outsourcing because it really is this incredible opportunity that can transform every business out there it’s super incredible.
Henry: Yeah, I agree and once it works out for 1 staff it creates a huge snowball effect
Derek: Absolutely and the funny thing is people kind of fearful of this and they’re worried about how it’s going to transform jobs and Outsource Accelerator now is actually writing a white paper about why outsourcing is a win-win for everyone involved. So you know you can go to our website and look at for that but specifically one of the reality is outsourcing is inevitable just like you know the development of cars took over the horse and carriage you cannot stop and because technology is breaking down borders, outsourcing is happening and so there’s a huge opportunity to harness the best skills in the 7 billion people that are on this planet it’s a huge opportunity for you as a business owner and the reality if you don’t do it if you don’t harness this then your competitors will and you know this is an inevitable thing where eventually every business will be outsourcing part of their staffing so you know again I encourage people to embrace it start early and get on this outsourcing bandwagon.
Henry: So with your experience when did you notice or when I mean what usually the tipping point on when a businessman seriously starts considering outsourcing for their business?
Derek: That’s a good question when outsourcing started 25 years ago it was only the big conglomerates that did it, it was like IBM and it was DELL you know these huge companies and it’s just like when hedge funds started it was only the Billionaires that could access it and it’s only the big conglomerates that had Swiss banking but now outsourcing has developed and there are more and more access points for SMEs but also startups so I encourage everyone you know 25 years ago it was only viable if you had 5,000 staff sitting in the US because it was there was a lot of cost for infrastructure and investment to set this thing up. Now like hiring service and building a website everything is so so cheap and you can start outsourcing with 1 staff member or even half a staff member like FTE so I would suggest if you are a solo entrepreneur or a startup then look at outsourcing right now because you want to set your business up in the right way right from the start because if you wait till you get 20 employees and then you flip around to an outsourcing model your having to rebuild things so I would suggest that outsourcing now is right for any business and of course there’s the whole for our work which popularized outsourcing to the degree where the first thing you can do or should do when you’re a solo entrepreneur or an entrepreneur just starting up get a Virtual Assistant over in the Philippines or anywhere that can help you and leverage your value time and valued creation time to make you more efficient so there’s basically you know in short you should start now
Henry: I’m sure at this point a lot of our listeners would be interested in reaching out to you and even talking to you so they can know more about the Philippines and the benefits of outsourcing and can you tell us what is the best way for them to be able to do that?
Derek: Yeah absolutely you know we open 95% of our content for free we have a podcast which is Outsource Accelerator podcast go and have a listen to that our website is outsourceaccelerator.com there’s a huge amount of resources there people can email me directly which is [email protected] and yeah just get in touch as I said I’m happy to have a chat with people we do also offer the world’s best-consulting package that again all the information on the website but there’s a huge amount of free resource and i just encourage people to take a look at that.
Henry: That sounds great and thank you so much for getting in the show Derek, I really appreciate it. It was great having you on
Derek: Fantastic, Henry it’s been a blast. Thanks.
Derek: Okay how was that? That was me being interviewed by the Outsourcing and Offshoring Philippines podcast as you can see I get a little bit excited when talking about outsourcing so please give me any feedback that you have on that, if you want any of the show notes, of course, go to outsourceaccelerator.com/109 and of course if you want to leave me any feedback, if you want to ask us any questions at all then just email us at [email protected] See you next time.