2013 TELUS International telusinternational.

com | @TELUSint





Outsourcing for Social Good:
A BPO Perspective


Insight Paper






When it comes to corporate social responsibility (CSR), is there a new imperative for BPOs? Global
BPO provider, TELUS International, in partnership with global CSR consultancy, Impakt Corporation,
explore the rising social purpose of the outsourcing industry.
Learn more at: http://telusinternational.com | http://impaktcorp.com






Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 2
Idea in Brief
The Business Process Outsourcing (BPO) industry was born out of a desire to cut
operating costs. However, the industry is changing considerably. Today, progressive
BPOs are focused on creating an exceptional customer experience while delivering top-
line value to their clients in a way that also addresses social inequities in the countries
where they operate. At the same time, clients are evaluating BPO suppliers on more
than the conventional value proposition. Clients have come to recognize that
Corporate Social Responsibility (CSR) is a vital way to assess the values of a company.

By responsibly and ethically employing hundreds of thousands of people, BPOs have a
role to play in shifting the social landscape in emerging economies around the world.

A crucial next step is to develop more robust techniques for measuring both societal
and business impacts of CSR initiatives, including reduced agent attrition, better
customer satisfaction, and improved public opinion.
The Need for Social Change
The need for social change is as urgent today as at any time in history. About 1
billion people around the globe will go to bed hungry tonight, 200 million of them
children. According to USAID, nearly 800 million people lack dependable access to
clean water, and about 2.5 billion people lack access to modern sanitation
1
.

Until recently, addressing these critically important social issues has been the sole
responsibility of governments and non-governmental organizations (NGOs). Despite
the best efforts of civil society, the social conditions for too many people around the
world remain unacceptable. As government programs and services are being cut and
NGOs struggle to stay afloat, societys expectation of business has changed. Milton
Friedmans belief that the responsibility of business to maximize profits is being
challenged and the question of what constitutes business value is being re-
examined.

How can businesses align short-term business goals with long-term social
objectives? What is the business value of social change and the social value of
business performance?

A new model is emerging that touches every aspect of a company's operations. It is
embodied in a term coined by Michael E. Porter and Mark R. Kramer in their 2011
Harvard Business Review article "Creating Shared Value". Instead of relying on
altruism or optics to drive corporate social responsibility, the concept is based on

1
http://www.usaid.gov/what-we-do/water-and-sanitation
Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 3
"reconceiving the intersection between society and corporate performance." By
aligning corporate success with social progress, new products, services and
approaches are developed that bolster a company's long-term profitability, while
also addressing major social issues.

As the world's largest purchaser of black tea, Unilever supports social change
through its Better Livelihoods program. It has already trained about 450,000
smallholder tea farmers in sustainable agricultural practices and made high
quality seeds and fertilizers available to them. Farmers have improved their
yield and their livelihood, while the company has a more robust supply chain
focused on smallholders.
Nestl has also developed a new sourcing practice for its highly popular
Nespresso coffee brand. Most coffee beans used for specialty coffees are
sourced through small farmers in Africa and Latin America whose production
is limited by a lack of resources. To overcome this problem, Nestl has
provided advice, financial assistance and agricultural inputs, while also
building local processing facilities. This has increased yields, while also
providing Nestl with a more secure source for their coffee.

Google.org is leveraging its robust mapping technology for the public good,
providing everything from crisis response information to flu and dengue
trends. These actions are helping the world tackle some of its most daunting
challenges.

Clearly, progressive companies are already making social change a core pillar of
their business. How does this approach apply to the Business Process Outsourcing
(BPO) industry?
BPO: An Industry with a Social Purpose

The BPO industry was born out of a desire to cut operating costs. However, the
industry is changing considerably. Today, progressive BPOs are focused on creating
an exceptional customer experience while delivering top-line value to their clients in
a way that also addresses social inequities in the countries where they operate.

TELUS International was interested in producing a balanced and objective analysis
of the reasons why corporate social responsibility (CSR) is becoming so important to
the BPO industry. Impakt Corporation, a leading global CSR consultancy, was sought
out by TELUS International to explore this question.

The research revealed that BPOs have become connected to and rooted in their
communities in a way that is inextricably linked to the success of their businesses.
Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 4
By responsibly and ethically employing hundreds of thousands of people, BPOs are
shifting the social landscape in developing countries around the world, while the
industry is recognizing that success can no longer be defined by bottom-line
concerns alone.

A lot of business leaders look at their business and ask: what are our
strategic objectives? What are our financial metrics, KPIs and targets?
What are the core competencies and skills required within the
organization? And then, in an unrelated secondary conversation, they
may talk about culture, values and CSR. Its viewed as an addendum to
the central discussion of the business, not part of the fundamental,
strategic discussion about the business. For us, its an inclusive
conversation.
- Marilyn Tyfting, Vice-President, Human Resources,
TELUS International
A New Imperative for the BPO Industry

Success in the industry can no longer be measured strictly by costs per call or
number of seats in a call center. Limitations of the original BPO business model have
led to high attrition rates among call center agents, with annual turnover rates in
some locations exceeding 80 percent. This has many consequences. For the
companies the BPOs represent, high attrition rates can translate into a gradual
diminishing of customer satisfaction as brand continuity is minimized and agent
dissatisfaction interferes with the customer relationship.

The DNA of the emerging model for the BPO industry is based on the value of a
caring culture. When a company thoughtfully analyzes the social issues its
employees and communities are facing, and then develops effective strategies to
address these problems, the company, its employees and communities all benefit.
And when people feel valued and cared for, they become more loyal and enthusiastic
about the organization they are working for.

A key imperative for the BPO industry stems from a persistent inability for
governments and non-governmental organizations to address basic social issues in
developing countries, such as housing, access to clean water and education.

This consciousness has spurred companies to think much more strategically in
forming ongoing partnerships with local communities and aligning shared values
and goals. Its not a question of companies executing occasional, high-profile
philanthropic initiatives. It means embedding this ethic in the very way the company
Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 5
conducts its business. This isn't being driven by altruism. It is an innovative and
sensible strategy for a new brand of business success for BPOs.

"In our opinion, our team members [agents] are the true difference
how they feel, and how connected they are to the business. This
translates into providing passionate, caring customer experiences for
clients. It changes the ground rules so that traditional criteria and cost
savings alone become less important."
- Warren Tait, Vice-President, Culture, Philippines,
TELUS International
The Value of a Caring Culture

Helping communities address basics like housing, education and clean water,
enhances a company's reputation. It becomes a sought-after place to work, making
recruitment that much easier. Retention increases substantially. Agents are engaged
as they feel they are making a real contribution to their families and communities
through their employer.

For BPOs, success isn't measured exclusively by the balance sheet anymore its
also based on seeing the changing reality of communities.

In creating thousands of well-paid jobs, the stability of the community is improved.
People no longer have to leave their home country and family behind to earn a
living. Instead they can build a more prosperous life and community right where
they live. A wider range of opportunities becomes available. The middle class
expands. All of these factors have the potential and ability to transform society in a
profound way. This is not a pipe dream it's a snapshot of what is happening in
places as diverse as the Philippines and El Salvador.

"Many BPO companies stop at corporate charity. They make the poor
objects of charity. I think TELUS understands sustainability and
solidarity. It's about empowering the poor to help themselves and one
another. Its about building a permanent impact schools, water
systems and toilets have an impact, not just on the health, and the body,
but on the soul. So it is this spirit that TELUS brings the spirit of
solidarity and sustainability, of honor and self-respect."
Tony Meloto, Founder of Gawad Kalinga (NGO in the
Philippines)

Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 6
We are helping to create the future leaders of our country; people
focused on social consciousness and solidarity. They are able to go
from surviving, to dreaming.
- Guillermo Valiente, El Salvador Country Manager,
TELUS International
CSR: The Next Important BPO Benchmark

Increasingly, clients are evaluating prospective BPO suppliers based on more than
the conventional value proposition. They have come to recognize that CSR is a vital
way to assess the values of a company: how integrated it is in the community, how
committed it is to nurturing an environment that cares about its agents, and how
much it cares about customer satisfaction.
However, assessing the precise value of qualitative outcomes remains a work in
progress, and there is no one-size-fits-all approach that will work for BPOs in all
countries. The key to success is making every effort to understand the social issues
that matter most at the local level, adapting programs to best address these issues,
and doing so in ways that reflect each company's values, strengths and expertise.
"What TELUS has done is enable individuals to show up and do what
theyve always wanted to do to feel a connection and make a
difference. The return is loyalty and passion for the business and
compassion for the community. It becomes an ecosystem and lifestyle
that is community-based that people thrive in.
- Kevin Bottoms, Account Executive, TELUS International

What are BPOs doing?
TELUS International (TI) has instituted its Day of Giving in several countries,
including the Philippines and across Central America. In the latest Day of
Giving in the Philippines, TI mobilized 2,000 of its international team
members to refurbish the EMS Signal Village Elementary School in Taguig (a
single school attended by 9,000 children) in conjunction with a new
partner organization, Hands on Manila.
Beyond single day activities, TI is dedicated to creating ongoing, long-lasting
partnerships with their CSR partners, matching team members dedication
to volunteerism with charitable organizations that need support. During the
past five years, through a partnership with Gawad Kalinga (GK), TI has
helped create two villages and built 149 homes in the Philippines. Team
members also volunteer at the villages every few weeks, teaching life skills,
Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 7
tutoring children, and empowering previously homeless people to take
control of their lives.
In a similar model, Convergys uses its Community Action Network (CAN) to
promote everything from education to feeding the hungry and sheltering the
homeless. CAN combines volunteer hours, in-kind donations and direct
financial contributions to perform its work.
In Central America, TI focuses on youth and education, building schools from
the ground up, assisting more than 4,000 children. In addition, TI agents in
Guatemala put their skills to good use volunteering time running anti-drug
and HIV information hotlines.
TELUS International has also taken CSR several steps further. Three TELUS
International community boards located in the Philippines, El Salvador and
Guatemala, each distribute $100,000 annually to local grass-roots charitable
organizations. The boards are run by local community leaders, as well as
TELUS team members. The most unique feature is that local community
leaders, not TELUS International, determine where funds will be most
impactful in the community.
Another program that has made a significant impact is TELUS International
University (TIU) it helps employees earn a degree right onsite in their
workplace, improving their prospects without having to leave their jobs.
Another BPO company, Teleperformance, has also created centers for
learning TP University. It gives the companys most promising executives
personalized college courses that immerse them in the company's best
practices and innovative approaches to customer relationships and the
customer experience.
Sykes has created a series of programs as part of its Global Giveback effort
that supports everything from local clinical health services to physical
fitness. Sykes Cares represents the companys main philanthropy program
aimed at raising education levels in the Philippines by providing educational
facilities and equipment.
There are several other examples from large scale programs to individual
stories of giving. But overall, theres a real opportunity for BPOs to embrace
this new imperative around both customer experience and social change.


Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 8
A Sense of Direction: Where Does the Industry Go From Here?

While several BPOs have begun to derive significant returns from their social
purpose initiatives, many companies still approach non-financial aspects of business
in a mostly ad hoc manner. The industry is just beginning to approach community
challenges in a more systemic way.
Finding the right balance in how to communicate social purpose efforts also remains
a challenge. Corporations recognize a degree of risk from being seen as blowing
their own horn too loudly. Yet, business results and social outcomes depend on
drawing more attention to non-traditional initiatives. And since clients increasingly
look at CSR as a differentiator in their business and their choice of suppliers, it has
become more important than ever to spread the word.
Research conducted in support of this paper has revealed a number of other
interrelated questions that the industry should address moving forward. Most
importantly, what are the best tools and metrics BPOs can use to quantify the
results of a CSR program?
Other key questions include:
How can companies in this industry align their social purpose initiatives to
better reflect their corporate values and existing areas of expertise? How
does a more targeted alignment translate into a better customer experience?

Is there a way of more formally integrating BPOs and clients in the
development of shared CSR endeavors?

What criteria could be established so that BPOs can better determine how
best to serve community interests?

Can social investment practices be standardized and applied in different
regions across a network of corporate operations?

How can BPO companies measure and improve their partnerships with local
NGOs?

Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 9
Taking the Next Step

Companies are good at growing their businesses; they are not created with the
intention of acting as direct aid providers.
Although its flattering to be mistaken as doing the work of Canadas primary
international aid agency, TELUS International recognizes that its role is not to
deliver aid. Rather, it's to develop long-term partnerships with the most effective aid
agencies in the countries where it operates. It's to form community boards with
local leaders to steer the company to the social issues and solutions that will work
best in each region. It's building a social purpose from the ground up, instead of
imposing one from the top down.
"Canadian companies in the Philippines, including TELUS International,
are leaving a legacy for society. They are helping people belong to
something bigger than themselves. This creates voices for real
transformation.
- Christopher Thornley, former Canadian Ambassador to
the Philippines
A crucial next step in the process is developing more robust techniques for
measuring both societal and business impacts of CSR initiatives. For now, though,
the positive impact on TELUS Internationals corporate culture is clear:
"It really is remarkable how infectious this whole CSR philosophy is
when you do it right. It can come across as hollow and disingenuous
when it's being produced as a sound-bite or photo opportunity. When
its part of our DNA, and a pillar of corporate culture, it provides a
jumpstart to the business. It creates common language for all of us to
rally around its the glue of our organization, considering how
disparate and diverse the business really is."
- Jeffrey Puritt, President, TELUS International

This paper is the first formal analysis of the relationship between social purpose and
business performance in the BPO industry. But it is only a starting point. TELUS
International will continue to explore the relationship between community
involvement and social purpose, and its impact on better business performance. The
objective is to advance the interests of the BPO industry and its clients in ways that
also create meaningful social change.



Outsourcing for Social Good: A BPO Perspective
2013 TELUS International 10
For more information:

TELUS International
TELUS International is a global provider of contact center outsourcing solutions. With locations
throughout North America, Central America, Asia and Europe, TELUS International drives value by
enabling customer experience innovation through spirited teamwork, agile thinking, and a caring
culture that puts customer first. Learn more: http://telusinternational.com

Impakt Corporation
Founded in 2001, Impakt helps corporations and not-for-profit organizations become social
purpose leaders by assessing, improving and measuring the value of social investments and social
programs. Learn more: http://impaktcorp.com















COPYRIGHT NOTICE 2013 TELUS International. Other company and brand, product and service names are for identification purposes only and
may be trademarks or registered trademarks of their respective holders. Reproduction without permission is forbidden.