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Modern Outsourcing with Lloyd Ernst

Lloyd Ernst, Founding Dircetor of Cloudstaff

In the last two decades, outsourcing has become part of the eco-system of international business. As the world has become more globalised, outsourcing has grown from a simple cost-saver to a way companies can gain customer-centricity and unlock new technological capabilities. The future belongs to companies who understand what their clients want and utilise the latest technology to provide it.

Lloyd Ernst, founding director of Cloudstaff – a leading outsourcing company in the Australian real estate space, has always had something of a crystal ball. A serial entrepreneur, Lloyd continually saw into the future. Anticipating the potential of the internet, he profited from the tech boom in the 1990s. He says, “I was a technology sort of guy, and I had a couple of businesses up in Brisbane that we sold and exited. One of them was called 'Web Central' which we sold to Malcolm Turnbull, Sean Howard and Trevor Kennedy." In other words, the Ozemail guys – one of whom would go on to become the Prime Minister of Australia.

Continuing to demonstrate his ability to predict future trends, in the early 2000s Lloyd saw outsourcing as a solution to finding the right kind of staff. He says, “One of the challenges I had running a technology company like Web Central is we could never get enough developers. I think we had six billing developers back then and they were on $150,000 each. There's a million bucks going straight to the bottom line and the reality was it was never going to end."

Pursuing the business model of outsourcing, he landed in the Philippines in 2010 after he decided it was too difficult to run software quality assurance testing out of China. He found that Southeast Asia’s second most populous nation, the Philippines - where English is an almost universal second language was the perfect place to develop a virtual Business Process Outsourcing (BPO) company. Lloyd says, “It actually worked. We had a happy customer, great results and a great team. I thought there really could be something here. So we started growing that particular business, and today we still have five of those original team members with us after about seven years, which is fantastic."

Lloyd says though, “We really don't consider ourselves a BPO. We see a much bigger picture here with where this whole industry is going." What Lloyd is actually in the business of is building relationships and creating virtual teams.

In the last decade, technological advances have lowered the cost of communication and logistics which has meant the scope and complexity of what can be outsourced have increased over time. Lloyd has managed to leverage off these changes and Cloudstaff, based in downtown Manila, has become a major player in the outsourcing space.

Cloudstaff has been able to achieve greater economies of scale and pass these benefits on to their customers. The company now has 1,200 dedicated, highly educated and skilled Filipino employees working for 13 different Australian companies outsourcing their business. These mid-sized Australian businesses can scale up or down various aspects of their operations because of their relationships with Cloudstaff.

Lloyd says, “We now have about 800- 900 engaged staff at any one time. We have another 200-odd staff that work in what we call our 'Hub' - they are the support teams behind that. And then at any one time in the Philippines, believe it or not, you're going to have somewhere between 50 to 150 trainees inside the organisation. So the numbers here just work differently which is kind of amazing."

To ensure the business attracts the best and brightest in the Philippines, Lloyd and his business leaders invest a lot in maintaining a very high profile and making sure Cloudstaff is a fantastic place to work. Lloyd says, “We, in fact, call it 'building the number one workplace in the Philippines', so we do lots of really interesting things. We do big experiences for the staff when it comes to media parties and Christmas parties, for example." Staff also enjoy many perks, such as shakes and massages - one year they gave away a car to a staff member.

Lloyd adds, “It’s one of our pillars – to be a very desirable location for people to want to come to work. We really want to attract the best talent because that's what's needed. If you look at a lot of businesses over here, you have huge corporations, and they have thirty staff doing one thing. My customers are completely different. They want one person to do 30 things, and so you need to find the people that have the right skills to be able to handle that sort of diverse range of tasks."

Further, Lloyd says, “We make sure that we have an ongoing education program for staff." They empower staff and engender a feeling of ownership so that staff can react to issues straight away. He wants staff who have a great attitude, but he also wants to back that up with skills. He says, “So we have what we call a workplace simulator and the staff when they come along will sit down and do these courses. There’s one in there that we have for Australian real estate. So it introduces people to the concepts of how Australian postcodes work, where different suburbs are and all those things. We have another system that teaches them how to recognise Australian street names and all those sorts of things. So we've really tried to tune and deliver that sort of training and knowledge base as well for our customers based in different industries that we're in."

In the Future

A recent survey conducted by the National Outsourcing Association in the UK found that 70 per cent of buyers surveyed said they expect to increase their use of outsourcing, with 35 per cent planning to do so significantly. Again, looking into his crystal ball, Lloyd is ready for increased demand. He has a vision of building a business that will aid other businesses to crack burgeoning Asian markets. He says, “The Philippines is the English hub of Asia, and Asia is going through a one of a kind growth period. So one of our goals is to expand into some other markets. So we already have some operations in China and Thailand, and Singapore and Indonesia are some other markets."

He explains, “We are building a platform here. We need to be able to scale. We work 24 by 7, and that means you don't have just one or two people doing tech support - you've got a whole team of 30-odd staff. We run multiple office locations including Ortegas. We're going to be opening offices down in Cebu and all around the place. We want to be able to go to Western companies that need to have front line customer service in those markets and be able to say to them, 'Use your Filipino staff'. Our goal is to make it easy for Australian companies to use the Philippines to leverage into markets inside Asia as well."

Is it time for you to get on board?

What kinds of services can you outsource?

  • Accounting and finance
  • Back office
  • Procedures
  • Email support
  • CRM updates
  • Document production
  • Video production

Lloyd explains:

"One of the things we recommend customers do is if you don't have the time or energy to sit there and properly write the procedures to the level of detail that the staff in the Philippines will feel comfortable with – let our staff do it. So sit down and do a screen capture and record the process, record the audio, record the video and then send it to the team up here.

"The first thing we do is we transcribe it. We take all the words out, we put screenshots in, and we start to create your procedure manual. We then send that back, and you go through and review that particular process and then it becomes your manual.

"One of the key things for most businesses is that intellectual property is locked up in people's heads. If you want to make outsourcing work you've got to get that information and put it down in a particular document. This is one of the great things as you go through and build your team up here - get them to write the procedures, get them to have ownership of it. You'll still have to be the one that will go through and review it. Look at, 'I can make that step better' or, 'This is how we can change things like that', but get them involved in the process."

Outsourcing works if you can get it to work

Outsourcing is not about providing the lowest denominator level of support. It does require a degree of effort, planning and articulation to make it work well.

1. Look for a partner

To make outsourcing work you have to collaborate and build a relationship with a partner you can trust. Look for an outsourcing partner who can deliver staff quality, value and innovation, relationship management and collaboration.

2. Get the team dynamics right in Australia

Lloyd says, “There is just as much effort involved in getting everybody onside and in the right direction back in Australia as there is in getting the team up and running here, and a lot of people seem to miss that."

3. See outsourcing as building another virtual team

Lloyd says, “We're not providing a generic service. One of the things we did when we built Cloudstaff was put together what we call the platform, and the platform allows us to be able to go through and take a business and add to them – give them people with different skills. When you go through Cloudstaff you'll see a construction company and inside their particular team you're going to find accounts receivable, accounts payable, tech support guys, QA people, software developers. It really is quite amazing."

4. Take the opportunity to craft and fine-tune processes and enhance the important parts of your business

Lloyd adds, “Rather than saying, 'This is the lowest common denominator, this is what we can deliver', it's about, 'Let's put together your Philippines team'. The idea is that we'll sit there, we'll manage it, we'll help you make this work." When outsourcing is done well, you get to take the most important parts of your business and have them embedded in your virtual team.

Take a look at yourself - seeing is believing

1. Block out a week in your diary.

2. Book a flight and check out a few providers.

Lloyd says, “It’s the only way that I think you can really make a balanced judgment call. Come out, check out a few providers and see how it actually works. We're always happy to sit and take you for a beer or have a meal and share our experiences. It really is a fundamental change in the way in which businesses are building their businesses, and this will be part of most businesses in the future."

He continues, “Once you have your team, you certainly don't need to be here all the time, but most of our customers will make a visit every six months or once a year, or some of them come up and spend that time here. Certainly, once we have that connection with your staff members, it just works so much smoother."

For more information, contact Ribhi on +61 2 8039 9000 or, alternatively visit:



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