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Thursday, March 18, 2004
RP second in e-services worldwide: Meta
THE Philippines is second only to India as the destination of choice in e-services, according to the Meta Group, one of the world’s leading information technology (IT) research organizations.
But few people know this, so the Philippines should work hard to get the word out, especially since India’s ability to supply the outsourcing demand is diminishing.
Emmanuel Mendoza, president of IBM Solutions Delivery, made these remarks during the Sun.Star Economic Forum 2004 at Waterfront Cebu City Hotel last week.
He said the Philippines could compete well in back office services and payment services because of its large pool of knowledge workers fluent in English, competitive labor rates and the low barriers to entry in business process outsourcing (BPO).
“BPO doesn’t provide significant barriers in entry to market, as software development does,” he said.
He explained that India was now differentiating itself by getting certifications, but it will “cost a million dollars for Philippine companies to do that.”
Mendoza said there were two types of outsourcing: IT services and BPO.
IT services refer to e-business hosting, application management, network outsourcing, desktop out-sourcing and data center outsourcing.
BPO refers to business lines that can be transformed and delivered through IT infrastructure like customer contact centers, engineering and design, animation and content creation, distance learning, market research, travel services, finance, human resource services and purchasing.
Cebu is already home to BPO firms including Western Wats, Sykes Asia, Bigfoot, PeopleSupport and Convergys.
According to the IBM official, India now has 80 percent of the share in the BPO and IT services space.
“But its ability to supply the demand is already being outstripped. This is where the Philippines, China and Vietnam and many others are vying for.”
However, he warned that the Philippines may not be able to capitalize on this opportunity if it does not increase the supply of its knowledge workers soon.
He said one company, for instance, had expressed interest in a pilot project that required 200 Cisco-certified engineers, which he was hard pressed to find.
He said even the call center business was “a game of scale,” with investors needing from 400 to 1,000 seats to recoup their investments.
Reacting to Mendoza’s speech, Rene Almendras, president of Cebu Holdings Inc., admitted that the Ayala firm was helping call center locators of its Asiatown IT Park hire employees from as far as Bacolod, Iloilo, Davao and Zamboanga.
Last Monday, five Cebu schools vowed to produce 20,000 graduates next year for contact centers by integrating a call center training course in their curricula. CTL
(March 18, 2004 issue)
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