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No longer a mere overseas call center

Article - July 27, 2011
Business process outsourcing is growing and maturing into knowledge process outsourcing in this tech-savvy island nation
Filipinos are techies. The country’s ICT sector has been a leading driver of the economy for the past seven years, driven by domestic demand for telecommunications products. Electronic goods comprise 60% of Philippine exports. Also, the country produced almost 56,000 engineering and technology-related graduates in 2008, and boasts one of the best ICT training infrastructures in all of Asia. Finally, the Philippines is even ranked number one globally in SMS usage.

It is therefore no surprise that Cebu City was recently positioned as the number one emerging destination for business process outsourcing (BPO), an advantage it wants to parlay into knowledge process outsourcing, an up-and-coming sector in the country, which normally involves high-value work carried out by highly skilled staff and is currently dominated by India. Most experts agree, however, that the Philippines is set to become an increasingly important competitor, and has already surpassed India as the world’s call center hub.

Indeed, the only sector growing faster in the Philippine economy than ICT is its BPO sector. The Philippines has become a global powerhouse in the industry, especially for voice-based (Filipinos have a high level of English and a cultural affinity with the U.S.) and back-office work. It was worth $9 billion in 2010, representing over 3.5% of GDP and 10% of the global outsourcing market. The government is targeting revenues of $11 billion this year, as well as the creation of 84,000 new jobs, which would bring the total number of IT-BPO workers in the country to 610,000.

With such a tech-savvy population and economically powerful industry, the country’s choice for the man to oversee it all is at first glance curious – Ivan John E. Uy, chairman of the Commission on Information & Communications Technology (CICT) since July 2010, and a former member of the Philippine judiciary. A closer look, however, reveals the particular genius of his appointment.

A known cyber law expert, Mr. Uy helped to transform the workings of the country’s judiciary in his position as chief information officer of the Philippine Supreme Court. He says, “I had the privilege of being able to bring in innovation to transform the way things were done in the judiciary by making it more transparent and efficient. My chairmanship of the CICT allows me to do that at a national level. I couldn’t pass up the chance.

“Most government structures are created under an industrial age model. They operate in vertical silos (for example, agriculture, environment, education, etc.). The new model is flat. Information is shared across the board. As long as the government operates in those silos, then information is kept there. This worsens bureaucracy and red tape.”

He adds, “CICT is really designed to take on multi-faceted roles as a business facilitator and a strategic, innovation-led government unit that ensures the country’s competitiveness. We are at the intersection of every point in the matrix; we are the ‘e’ in everything – e-health, e-commerce, e-ducation.”