NEW YORK - Move over, India. There's a new player in the global
outsourcing business. Philippine President Gloria Macapagal Arroyo, who visited
with President Bush and was feted at a White House state dinner Monday, came to
the nation's financial capital yesterday to pitch US companies on the benefits
of moving some of their key business and technology tasks to her island nation.
After years of watching countries like India, Ireland, and Russia attract
foreign outsourcing business, the Philippines is on an aggressive drive to win
a larger share of this growing market. And Arroyo told about 200 guests at a
Philippine outsourcing seminar at the Waldorf Astoria Hotel that her low-cost
country is one of the best destinations for US firms in Asia. "We're a very
open economy," said Arroyo, "and our culture is very well adapted to Western
business practices."
For example, Philippine officials said, their firms use the same accounting
standards expected of US companies. The majority of the country's 90 million
citizens speak English, and about 350,000 Filipinos graduate from colleges and
universities each year. And the Philippines has a highly developed
telecommunications infrastructure, including a nationwide fiber-optic backbone
and multiple undersea cables to every region of the world.
The Philippine government and business community hope such factors will lead
American firms to choose their country as an outsourcing destination over
India. But they don't expect the Philippines to rival India's strength in
high-tech areas such as software engineering. "To take on India in software
development is ludicrous," said Roberto Romulo, senior adviser to Arroyo and
former president of IBM Corp.'s Philippine operations. "No way we can catch
up." Romulo's great hope is that his nation can become a power in the larger
field of "business process outsourcing," such as medical transcription,
accounting, tax preparation, and customer service call centers. Already major
US companies, such as Internet provider America Online, use Filipino call
centers to provide customer service, while US hospitals purchase transcription
services from Medi-Type Transcription Services Corp. This Yorktown Heights,
N.Y., company lets doctors dictate medical information by phone, then
electronically sends the recording to be transcribed by clerical workers in the
Philippines and double-checked by Filipino doctors.
In these fields, Romulo said, the Philippines have a big advantage over India
and other outsourcing rivals. For instance, because many Filipino doctors and
nurses have studied and worked in the United States, they are familiar with the
US healthcare system. And a study by the research group Gartner Inc. found that
Americans find it easier to understand Filipino English speakers than citizens
of India or even Ireland. "In business process outsourcing, you need CPAs, you
need doctors, you need lawyers," said Ramon Dimacali, chairman of the business
association Outsource Philippines. He said that his country's educational
system produces many well-trained experts in these fields, while lagging behind
India in the training of engineers and computer programmers. Even so, Dimacali
said his own company, Software Ventures International, has 800 employees doing
outsourced software development. And William Ferguson, Asian marketing
executive for US financial giant Citibank, said his company has about 200
programmers in the Philippines designing software for use by Citibank's retail
customers. Citibank has been doing business in the Philippines since 1902, and
Ferguson said the country still has vast untapped potential as a destination
for outsourcing.
"While India is viewed as having the lead," Ferguson said, "the Philippines is
clearly in the group of the leading challengers." And more challengers are
still emerging. Among the guests at yesterday's seminar were Yaw Owusu, chief
executive of Ghana Cyber Group Inc., a New Jersey firm that hopes to develop
business process outsourcing opportunities in the West African nation of Ghana.
Ghana is already becoming an African leader in outsourcing, with Dallas- based
Affiliated Computer Services Inc. employing more than 1,300 workers at a data
entry site in Accra.
Owusu says that's just the beginning. "We can't compete with the Philippines in
terms of infrastructure," Owusu said.
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"But give us time. We'll get there."
Hiawatha Bray can be reached at
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