European Companies Show Keen Interest in the Philippines' IT Services

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The Philippine business mission to Europe was met by a dozen of companies eager to do business with the Philippines' IT and IT-enabled firms, according to the Center for International Trade Expositions and Missions (CITEM).

The Philippine business mission to Europe was met by a dozen of companies eager to do business with the Philippines' IT and IT-enabled firms, according to the Center for International Trade Expositions and Missions (CITEM).

According to CITEM, "The response from the business community in Europe was encouraging. We have to keep them in our radar screen if we are to remain competitive in the business process outsourcing (BPO) space."

Local enterprises which visited Europe operate in various IT outsourcing areas such as contact centers (Advanced Contact Solutions (ACS), Vision X, and Teletech Holdings, Inc.); contact center solutions and technology (Alliance Technologies and Diversified Technology Systems Inc.); financial services and accounting, publishing and transcription (SPI Technologies, SENCOR); architectural and engineering requirements outsourcing (Environments Collaborative) and project management of outsourcing needs (Invent Asia).

Forrester Research estimated that the UK will account for three-quarters of all European offshore outsourcing within five years. The report also said that offshore service spending in Western Europe will grow from EUR 1.1 billion in 2004 to EUR 3.6 billion in 2009, with the UK accounting for 76 percent of that amount.

Aside from the growing outsourcing demand in Europe, other factors driving the need for technology-enhanced BPO are: increased bundling of horizontal offerings (e.g. F&A combined with HR and supply management), demand for more sophisticated services beyond mere process execution, moving up the value chain in global delivery, requirement for technology boost and expertise in application and information management, and increasing prevalence of mega deals and acquisitions.

To date, Dutch companies with outsourced processes in the Philippines are Getronics, ING Group, KLM Royal Dutch Airlines and ABN AMRO. Meanwhile, British companies with outsourcing operations in the country are Standard Chartered Bank, Sykes and Ambergris Solutions.

The Philippine delegation, led by Trade Assistant Secretary and CITEM executive director Felicitas Agoncillo-Reyes, met with Universal Marine BV, SOLLAND, Allied Aircraft Assistance Worldwide Association, KLM, Sommer Holding Ltd., Digital Port (Information Center) Rotterdam, Logica CMG, HSBC, Express Gifts London, National Outsourcing Association (London), INTELLECT (UK IT Association), Mitial Research International, Arcware Solutions, Ltd., MRA Marketing Solutions.

Some of the potential business leads gathered from the mission were business processing deals with Logica CMG, Express Gifts and the Emirates Group.

Logica is a major global force in IT services and wireless telecoms, with around 21, 000 people across 34 countries. In the Philippines, Globe and Sun Cellular are among Logica's clients for SMS and MMS. The company has an offshore development center in India serving different verticals like telecom, financial services and energy and utilities among others.

Express Gifts Financial Services Director Nasser Malik is also looking into opening up a 200-seat contact center in the Philippines to take order calls for home shopping and other call types.

Other business prospects for the Philippines gathered during the mission were a 500-seat contact center requirement for outbound calls; F&A such as payroll services for insurance company with office outside the UK and a networking relationship with Digital Port Rotterdam as link to ICT users with outsourcing requirements.

The McKinsey Global Institute recently noted that a new competitive dynamic is emerging. "Early movers in offshoring improve their cost position and boost their market share, creating new jobs in the process. Companies who resisted the trend saw increasingly unfavorable cost positions which eroded market share and eventually end in job destruction." Offshoring, the study also noted, is a powerful way for companies to reduce costs and improve the quality and kinds of products they offer consumers, allowing them to invest in technology and create jobs.

During the mission, the Philippines likewise participated for the first time in Outsource World London, a two-day conference and exhibition featuring 70 exhibitors from 10 countries.

"The Philippine participation in Outsource World is part of our aggressive trade and investment promotions in Europe in which the BPO market continues to grow in size," CITEM officials said.

The government's international promotions agency also added that it was worth noting how most of the European companies intended to do business with the Philippines while the rest gained insight into the local market.

In 2004, the Netherlands was the Philippines' 3rd largest trading partner while the UK is the 16th largest.

The Philippines is the third largest English-speaking nation in the world outside the United States and the UK. Filipino IT professionals are also highly trainable with a learning curve of six to eight weeks.

The Philippines has the largest pool of quality accountants in Asia, with 105,000 graduates of finance, accounting and management every year, increasing by about 3,000 yearly. During the first quarter of 2005, there were about 113, 300 licensed accountants in the country. The U.S.' Generally Accepted Accounting Principles (GAAP) rank Filipino accountants as "among the best in the world."

According to the IMD World Competitiveness Yearbook, the Philippines is number 4 source of IT professionals in the world.

The Philippine business mission to Europe was organized by CITEM, the Board of Investments (BOI), in coordination with the Philippine Trade and Investment Center in Rotterdam and London. The project is a component of the ICT-Europe Trade and Investment Promotion Program under the Philippine ICT Business Development Team.

Media Contact:

Maffy Carandang

Publicity Services Division

Center for International Trade Expositions and Missions


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