by Greg Deligero and Lorie Ann A. Cascaro
Davao City ranks third among the six major cities that made it to the 2010 Top Outsourcing Cities in the world released by Tholons, a leading full-service strategic advisory firm for global outsourcing and research.
Metro Manila ranks 4th in the world followed by Cebu City which at 9th. Davao City ranks 69th. It is the only city in Mindanao which made it to the list.
Meanwhile, Sta. Rosa, Laguna or Metro Laguna is at 88th while two other Visayas cities, Iloilo City and Bacolod City, rank 98th and 100th, respectively.
“Change has been the best descriptive word for the outsourcing industry in 2009. This year, Tholons encompassed the world’s Top 100 Outsourcing cities – twice the number in previous lists. The expansion of the list has created an avenue for a more concise understanding of industry movements across 49 countries from 10 defined regions,” the firm said.
“The 2010 List of Top 100 Outsourcing Cities is a deliberate attempt to encapsulate such trends in this new era of services globalization. Thus, the list is not only a reflection of the current competitiveness (and stature) of cities in the global outsourcing landscape, it provides insight to the future potential of locations in addressing emerging trends and demands in services globalization,” it added.
In analyzing service delivery locations, Tholons covers six broad categories. These are: scale and quality (labor pool, skills output, and graduate output); cost (cost of operations, cost of training, cost of real estate, cost of bandwidth, cost of living and cost of other infrastructure); business catalyst (government benefits/incentives, competitive landscape, untapped labor pool and employment profile); infrastructure (connectivity, bandwidth availability and transportation); risk profile (commercial risk, political risk, natural risk and social risk) and quality of life (social infrastructure like hospitals, educational institutions, etc., non-work culture and the availability of recreation/leisure activities.
ICT Davao president Eriberto E. Barriga said Davao City’s performance in the list “is a clear message that the city is on its way to becoming a key global player in the BPO arena.”
“Being in the Top 100 would compel the big BPO players to re-examine their perception about Davao that being part of Mindanao it is not a safe haven for BPO investors. The playing field now is about talent, talent, talent. And Davao has a rich supply of quality talent, notwithstanding the ideal infrastructure already in place and the strong support of the local government and a very committed and passionate ICT industry that will continue to work together and help meet and generate the target of employing more than 30 thousand individuals by 2016,” he said.
At present, Barriga bared that there are three business process outsourcing (BPO) companies engaging in finance, accounting and banking that will visit Davao City in December.
He got the information during the International Outsourcing Summit (IOS) 2010 last October 26-27 at the Sofitel Philippine Plaza, Manila which he attended.
In this 2nd IOS organized by the Business Processing Association of the Philippines, Department of Trade and Industry and Commission on Information and Communication Technology, Davao City was featured in the exhibit as the emerging city partner. It was participated in by chief executive officers and business leaders of the outsourcing industry from 25 countries to explore significant potential engagements.
Many participants were impressed and warmly reacted to the audio-visual and power point presentations showcasing Davao City during the summit, Barriga said. The booth of the city delegates had 80 walk-ins and 16 of them expressed interest in potential visits by November and December, he added.
During the business matching, the Davao City delegation had 12 meetings and eight of them expressed their intention to visit, including the three BPOs mentioned earlier, while others are in technical support and general services, Barriga said. He added that these companies prefer to work stealthily and within the radar.
This is due to the fact that clients still do not feel safe in Davao, as stated by Jason Magnaye, chief of the Davao City Investment and Promotion Center, who also attended the IOS. “The city has the right amount and quality of manpower and infrastructure. Our challenge is to work on peace and order,” he added.
Part of the road map of information and technology (IT) BPO sector is to hit 20 to 25 billion US dollars by 2016. This will employ from 900,000 to 1.3 million individuals. “There is a strong need to tweak the talents of our manpower by intervening in educational trainings and enhancing the visibility of the country’s brand,” Barriga said.
Magnaye also said that part of positioning Davao in the BPO industry is to promote the lifestyle in the city. “It will be a twist of our promotion by telling them that we have quality education far better than other competing cities and that we have strong potentials for businesses,” he added.
At present, the city contributes more than 10,000 employees to the BPO industry and having a share by five to 10 percent of the total projected revenue is already humungous and significant, Barriga said.
As to the possibility of the United States and other developed countries to cease outsourcing once they recover from recession, Lizabel “Wit” Holganza, member of the board of trustees of the Davao City Chamber of Commerce and Industry, Inc., and former ICT Davao president, said, “Industry experts say that it will go in a cycle because the jobs that companies outsource are not part of their expertise. Even the Philippine government has started to employ a third party for some functions,” she said.
Aside from attracting BPOs to the city, Barriga asked, “Why not also focus on local groups, pull them together and set up call centers ourselves?” This may be possible through various workshops.
