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The Latest
on e-Services
By Michael Alan Hamlin
February 3, 2003
Despite the appointments of a presidential
advisor on the Internet and an undersecretary for ICT at the Department
of Transportation & Communication, Department of Trade &
Industry (DTI) secretary Manuel A. Roxas II "is considered
to be the best evangelist in promoting the outsourcing industry,"
according to respondents to the latest survey results published
by ICT-sector champion Janette Toral. The "outsourcing industry"
refers to e-Services sectors like contact centers and medical transcription.
According to Issue 4 of The Digital
Filipino StatsReport, 21 percent of respondents are "satisfied
with government support of e-Services sectors." Among the reasons
was the high profile Roxas provided the industry before the chairmanship
of the Information & Technology E-Commerce Council was shifted
from DTI to the Office of the President. Other areas of satisfaction
included promotions for the medical transcription and call center
industries, particularly, efforts to improve the quality of education
and skilled workers, and opening IT parks and providing incentives
for IT-related companies.
DTI and its attached agencies, the
Board of Investment (BOI) and the Center for International Trade
Expositions and Meetings (CITEM) have continued to work especially
close with the contact center and medical transcription e-services
sectors for a number of reasons. Foremost among them has been the
willingness of companies within these sectors to embrace government's
efforts to promote them. As a result, both sectors have enjoyed
substantial growth in the past year, despite an overall dip in investments
in general and in IT.
The results of government's promotional
efforts haven't gone unnoticed, and the software, animation, business
process outsourcing, and engineering and architectural design sectors
are also now also beginning to work closely with DTI, BOI, and CITEM
to duplicate that success. Close to 100 companies from these sectors
based in Metro Manila and Luzon, Cebu, and Davao will participate,
for example, in CITEM's e-Services Philippines 2003 exhibit which
will take place February 13-15 at the World Trade Center.
Promoting these sectors is serious
business, according to CITEM executive director Felicidad Tan-Co.
"Software and e-Services sectors play an extremely important
role in economic growth, job, and opportunity generation for the
Philippines," she explained. "Gartner Research reported
recently that these sectors export around US$1 billion a year in
products and services, and generate around 300,000 direct jobs.
Indirect employment is, of course, much higher."
Sixty-seven percent of respondents
to Ms. Toral's survey, however, feel that there is much work to
be done. One of the principal areas of concern is image management
and the development of an effective strategic communications program.
The lack of a comprehensive communications program is so glaring,
in fact, that it crops up repeatedly in comments by respondents.
"Government is encouraged to step up a media campaign and damage
control, especially at the international level," respondents
said.
Their concern is easy to understand
when considering the substantial contribution overseas contracts
make to respondents' revenue streams. Fully 42 percent of their
income comes from overseas clients principally based in the United
States (33%), Europe (20%), and Asia (32%). "Dealing with the
image problem of the Philippines as perceived by potential foreign
clients and partners is an issue that needs to be addressed concretely,"
Ms. Toral reported. "Maintaining foreign client relationships
is not easy as the number of jobs being outsourced is greatly reduced
to mitigate risk." Foreign clients are leery, in other words,
of outsourcing important work when the threat of terrorism or political
instability could delay delivery of outsourced work, increasing
costs and placing customers at a disadvantage.
Respondents have other recommendations
for government as well. They include subsidies for software and
hardware firms, especially in the SME sector, to stimulate growth.
Respondents view incentives as unfriendly to startups, and limited
to BOI-registered firms. Those incentives should also reward companies,
they say, for bringing in export dollars. Currently, rewards seem
to target a small, selective elite in their view. Indeed, there
is ample evidence that quantum-leap innovation is primarily a product
of startups, small firms, or small, independent work groups, and
not large companies trying to corner opportunity.
Government in general, respondents
suggested, should demonstrate its "seriousness in providing
support to the sector by using IT in its work, from having reliable
e-mail facilities to the quality of responses. They also argue that
"graft and corruption in IT projects must be eliminated in
order for the industry to be competitive." This is an issue
even multinational firms say is becoming a problem, in fact. For
years, ICT procurement seemed to be immune from the corruption that
plagues so much of government purchasing. That's no longer the case,
industry sources tell me.
Finally, respondents said that government
must work to lower the cost of doing business in the face of fierce
competition from India and China. Among the needs are lower power
charges, and better public transport to reduce both the cost and
duration of travel. While great strides have been made in lowering
the cost of Internet connections, respondents still feel that more
should be done.
The full report offers many more
insights into the state of the e-services industries in the Philippines.
It can be ordered by visiting www.digitialfilipino.com, or e-mailing
Ms. Toral at Janette@digitalfilipino.com.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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