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Advisory Column: The journey to starting a BPO business

Published:Sunday | April 5, 2015 | 12:00 AM
Davon Crump, chief executive officer of Global Outsourcing Solutions.

Jamaica is desperately relying on business process outsourcing - BPO - to deliver 18,000 new jobs in five years, earn hundreds of millions in foreign exchange and propel economic growth in the medium to long term.

The sub-sector featured prominently in the 2015-16 Budget Debate presentations of both Prime Minister Portia Simpson Miller and Minister of Finance and Planning Dr Peter Phillips.

Among the seven private

sector leaders acknowledged in the prime minister's presentation was president of the Business Process Industry Association of Jamaica, Yoni Epstein, for collaborating with government and industry players to expand BPO activities and create 5,000 new jobs.

In his opening Budget presentation titled 'Strong Foundations for Growth and the Expansion of Opportunities' the finance minister listed the BPO sub-sector as one of five strategic investment areas under the 'Growth Agenda' - the other four were agro-parks, energy/electricity generation, tourism and infrastructure.

Not only did Dr Phillips describe BPO activity as vibrant and exciting, but he also outlined Government's commitment to developing the industry through "financing support for infrastructure development and training, as well as an aggressive marketing strategy".

growth potential

In 2013, I wrote an article titled 'Untapped BPO Opportunities for Jamaican Entrepreneurs' in which I spelled out several opportunities for local entrepreneurs and the huge value and growth potential of the industry globally, which was growing at more than five per cent per year and valued at over $304 billion.

Starting a BPO business is just one way Jamaicans can take advantage of BPO opportunities, and is by far among the most lucrative.

However, there is no BPO start-up guide to follow. It's for this reason I gathered insights from one of the leaders in this area, Davon Crump, who progressed from a telemarketer in the United States to CEO of Global Outsourcing Solutions, on the very first steps entrepreneurs should take to assess if, when and how they can cash in on such a business.

Step 1: Study the history, advancement and projected development of business process outsourcing.

To start a BPO business, you have to fully grasp the history of the industry on a global scale then at the local level to understand how it has progressed over the years. It's important to understand why businesses want to outsource some operations, which processes and operations they are outsourcing now, and will likely outsource in the future.

According to Crump, many types of business processes are currently outsourced to Jamaica, including customer support, telesales, data entry, debt collections, accounting, appointment setting, tax preparation, web designing, creative services, and research and development.

He also noted that there is at least one company which has a contract to assemble electronic equipment.

Step 2: Assess the opportunities that currently exist against your own skills and competencies.

Crump agrees that the BPO sector has explosive growth potential and there is opportunity for new entrants.

"There is a lot of untapped opportunity in the industry,

primarily for knowledge-based outsourcing in the legal and health services. We have not begun to touch that as yet," he says.

He also believes it's not very difficult for entrepreneurs with no prior experience or training in this area to start once they have done proper due diligence and planning and execute well.

Step 3: Find an expert consultant or mentor.

In order to have the best shot at success maximise and safeguard your resources and save yourself time and money, it is always good to find a mentor or industry expert with whom you can guide you.

However, Crump admitted that finding this expertise is no easy task and that very few are willing to share.

"I would want to quickly say other entrepreneurs in the industry, however unfortunately in this is not the case, as other business owners and not just in this industry, but in all other industries, tend to not want to share their negative experiences because of fear of ridicule or for other selfish reasons," he says.

This should not be a deterrent, and entrepreneurs can and should reach out to Jampro and the Business Process Industry Association of Jamaica for guidance and advice.

Step 4: Understand the critical success factors and assess against your own capacity.

Knowing upfront what factors are necessary for success in this industry is essential, according to Crump. He listed the main ones as: access to capital; having the right team; finding a good location such as the Montego Bay Free Zone; having the right management team in place; and securing a good call centre broker.

"I made the mistake of not having enough and was not able to get conventional financing as a new business. I had to borrow form loan sharks at very high interest rates," he told Businesswise.

He also noted that potential clients will not outsource to you unless they are convinced you can perform as an extension of their own company, as for them, outsourcing is as much about quality of service and work as it is saving money.

Having completed the four steps above, it will be time to do what Crump describes as the real hard work and heavy lifting - determining where you wish to specialise, developing competencies, understanding, and proactively managing risks and then creating a credible strategic action plan to move forward.

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n Yaneek Page is an

entrepreneur and trainer in entrepreneurship and

workforce innovation.

Email: yaneek.page@gmail.com

Twitter: @yaneekpage

Website: yaneekpage.com