Media
Publication: BusinessMirror
Outsourcing
Industry Update
By
John Mangun
The
stock market has occupied most on the headlines of business pages for the
last two months, and other business stories have taken a back seat.
That
is only natural. However, it might be good to look at the current situation
with the industry that deserves much credit for getting things going again
with our economy and stock market.
The
outsourcing industry in the Philippines just continues to roll successfully.
But we cannot become complacent about this important sector.
There
are some funny, perhaps even bizarre, aspects to this outsourcing
phenomenon.
one
major US pizza restaurant outsourcers its customer calls for food orders to
the Philippines. The companies has thousands of outlets and guarantees very
quick delivery. So a customer in Las Vegas, Nevada, orders a pizza from the
store that is literally few blocks from his house. Yet, when he calls for
his pizza, he is talking to a Filipino sitting in a call center at Fort
Bonifacio. He could take 10 minutes to walk 300 meters to pick up the pizza.
But, instead he makes a 12,000 kilometers phone call. And it is less
expensive and more efficient for the company to engage in this type of
globalization. What an age we live in!.
The
outsourcing business in the Philippines is alive and thriving. for many
companies around the globe, the question from if they will outsource to when
they will outsource.
And
the question of the location for their offshore operation is becoming less,
"The Philippines of some place else?" to more of, "Do we
locate in Metro Manila or some place else?"
I
am indebted to my good friend Mr. Richard Mills, staunch supporter of
Philippine outsourcing and chairman of Chalre Associates, an executive
search and management-consulting firm.
I
do not mind giving Richard's company (and his Filipina wife and partner) a
pat on the back because he has been a great asset to a local industry by
finding the executives that these outsourcing companies require to keep
their operations thriving in the Philippines.
In
his recent article in ComputerWorld magazine, Richard interviewed another
long-time Philippine-outsourcing advocate, Mr. Dan Reyes, the head of Sitel
Corp., a major player in the Philippine outsourcing business.
Mr.
Reyes in one of the most experienced managers in this industry, being a
founder and former president of the Business Processing Association
Philippines. As a result of a merger with Clientlogic Inc., Sitel is now the
largest call-center company in the world, and all of it's expansion plans
are focused on the Philippines.
When
asked about how the Philippines compares with the other outsourcing
destinations, Mr. Reyes said that he saw little growth any place else except
India.
"Only
the Philippines can offer both quality and quantity of skilled people",
he said.
Hey,
that is no secret. We all knew that. But this is the statement that
astounded me.
Question:
"How is the Philippines perceived compared with India these days?"
Answer: "The Philippines is considered the No. 1 option. Before, we
were the backup solution or an alternative to India. Now this has changed in
a big way."
The
significance of this perception about the Philippines is amazing. Only a
year ago, the Philippine was the second choice to India. If a company could
not get exactly what they wanted in India outsourcing, they came looking at
the Philippines.
Now
firms are coming here first and if they are successful, they do not even
bother to travel to India. Even if not everyone might feel this way. it is,
nonetheless, a monumental change of attitude.
One
concern for the industry is that a strong peso might have some negative
impact on the outsourcing business here in the Philippines. Interestingly,
though, the free-market system always find a way to make money. As the US
dollar has appreciated against the peso, the dollar is weak against the
British pound sterling and the Australian dollar.
Q:
"Is the softening of the dollar a concern for you?" A:
"Right now, we are spreading ourselves to other markets. Australia and
the UK are examples where we see strong growth ahead."
This
shows that the industry here in Philippines has matured to a point that
these companies are committed to doing business here and are gaining the
ability to adjust and find some flexibility to their business model while
expanding the Philippines.
Q:
"Do you still hear silly remarks about the Philippines as a BPO
destination?" A: "I have not gotten dumb questions lately. Word of
mouth about the positive is getting around."
The
only question that Richard did not asked Mr. Reyes was why Sitel has not yet
considered listing on the Philippines Stock Exchange. But I suppose that
eventually, our stocked market will be viewed as positively as our
outsourcing business.
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Executive Search
& Management Consulting:
Chalre
Associates provides its Executive Search & Management
Consulting services throughout the Asia Pacific region. We are
proactive and well known in our sectors of focus. Regional
Managers use us to help bridge the gap between local environments and
the world-class requirements of multinational corporations.
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