BIZ COLUMN: WE MUST FOCUS ON OUR STRENGTHS

MANILA,  January 23, 2004 (STAR) DEMAND AND SUPPLY By Boo Chanco - Former DTI Secretary Mar Roxas has given a lot of verbal support to the development of our potentials for business process outsourcing, which includes the ubiquitous call centers. While call centers seem to be all over the metropolis, we have barely scratched the surface of the potential market for business process outsourcing. It could make up for the jobs lost in manufacturing.

We should do more to tap this potential. We should now clearly identify this emerging industry as one where we have competitive advantage in a globalized world and give it our full attention and support. Unfortunately, we are normally pretty superficial. After the photo-op, the publication of a press release or the delivery of a speech, we consider our work done. Our marketing efforts abroad are half hearted or lacking strategic direction.

One of my e-mail writers observed, we tend to "use less effective go-to-market strategies such as PR, trade shows and info sessions to sell the country’s goods and services instead of the systematic tactics such as management consulting and strategic investing that Indians prefer to use." Unfortunately, it takes a lot more than PR to win significant accounts abroad.

Our e-mail writer, a Pinoy MBA working in the US, feels that the Philippines has potentially better BP "raw material" than India. For example, he cited the case of AIG. In an objective evaluation between the two countries, AIG chose the Philippines over India as the company’s offshore BP location.

That shouldn’t be too surprising. In a recent story filed by Marianne V. Go, our trade and industry reporter, a major Indian company involved in this business also recently made a decision to open a fully owned subsidiary in the Philippines.

One of the Indian executives, according to Marianne, pointed out our advantage in having "a strong basic knowledge of US traditions and customs and the Filipinos’ warm, non-confrontational culture is well-suited to the customer service industry." It also helps that "the Philippines’ deregulated telecom market with multiple carriers offering point-to-point fiber optic connections to the US offers a lower cost and lead time."

Our e-mail writer also pointed out that "since entering the BP market, the Philippines has not lost a single major account due to customer satisfaction. Dell and Lehman Bros., on the other hand, have moved their call centers away from India due to customer satisfaction issues. He reports that Hewlett Packard after "accidentally" discovering the Philippines’ potential when it won Procter & Gamble’s (P&G) IT services business, is rapidly increasing its Philippine headcount despite having earlier decided on expanding outsourcing in India."

While these are convincing examples that the Philippines has the potential, our e-mail writer warns that the country "cannot maximize its potential unless it takes a systematic and strategic approach. Why do Filipinos have to wait for foreign companies to express these companies’ interest? Why does the country’s potential have to be discovered "by accident?" And why does the Philippines have to depend on foreigners to advocate its potential?"

Our problem, he says, is "the lack of problem-determination and problem-solving skills compared to India." It makes a difference that India has overwhelmingly more world-class business and engineering masters graduates than the Philippines and are more entrepreneurial than Pinoys.

A sufficient number of Indians who have grad school degrees eventually establish their own enterprises "because the Indians have the critical mass of future strategists." As a result, according to our e-mail writer, there are more Indian-owned management consulting, systems integration and capital markets firms than there are Philippine-owned. "I cannot think of a Filipino equivalent to the likes of Wipro, Tata Communications, neoIT and Inductis, to name a few."

We should start our campaign to sell our BP potentials right here with companies who have long been here and know the country well. The example cited is Procter and Gamble, which is now doing "extensive back office work, both IT and non-IT related, for P&G offices in other countries. In fact, its IT operations alone used to be a regional center before the IT group was taken over by HP. If this is true, then P&G can be used as a model that can be replicated throughout other multinationals that have offices in the Philippines."

The benefits are obvious. "Thousands of white collar jobs can be created rapidly at the back office, compensating for the ones that were lost on the factory line. This strategy is advantageous to the Philippines because, first, it builds on existing business relationships. Many of these multinationals have been doing business in the Philippines for decades while India opened its economy only recently.

"Also, country managers report directly to global executives and can serve as bridges to important decision-makers. Second, it addresses many companies’ concerns about outsourcing work, the preferred approach of Indian companies, at the expense of control. With this approach, jobs are not outsourced but merely off-shored to a different location but kept within the company.

"Lastly, it does not burden the country offices’ budget because costs related to payroll and benefits can immediately be shouldered by the overseas country offices. Philamlife, for example, recently began hundred-man BP operations to service AIG worldwide to perform various tasks such as call handling and claims processing."

Maybe we can bank on these guys here knowing us, knowing our crazy politics and are not easily scared by our newspaper headlines. Marketing our potentials in back office business processes outsourcing to the likes of Colgate, for instance, will also mitigate the impact of their decision to move manufacturing to Thailand.

This is something we are good at, and should strive to be continually good at. And as Ian Esta, another one of our readers puts it, these BP jobs "can provide stable jobs for our college graduates, quite an improvement from the past when students have to wait a few months before they get jobs."

But wait… I just found out that we have recently lost a major account, Caltex. The oil company has previously moved some of its regional back office operations here. But it recently closed it down, not because of customer satisfaction issues but labor problems. Ah! That’s a thorny problem bugging us every time. That’s only because the leftists who run the most militant labor unions don’t want our workers to have jobs. The more miserable our people are, the quicker we will reach the point when a revolution is inevitable.

Maybe newly installed DTI Secretary Cesar Purisima can address this problem with the Labor department. Maybe we need special labor laws for export-oriented service businesses. This is the only way we can keep investors already here to stay here, but to convince them as well to get their head offices to offshore backroom business processes operations here ala Procter & Gamble and AIG.

We simply must focus on our strengths – our competitive advantage. This is what globalization is all about. If government and the private sector can work together in a systematic and strategic manner to make this a big job generator, we don’t have to worry about Myanmar overtaking us soon.


Reported by: Sol Jose Vanzi

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