Cebu ranks 4th globally as outsourcing destinationCEBU CITY -- Cebu landed number four among 15 emerging outsourcing destinations for global companies, according to an industry report.
India, though, remains the most favored technology outsourcing destination despite concerns that a rising rupee and soaring wages would blunt the country’s competitive edge.
Join forum on Sandiganbayan's guilty verdict on Estrada plunder case. Post comments here.
A study by industry publication Global Services and investment advisory firm Tholons put the Indian cities of Chennai, Hyderabad and Pune at the top of a list of 15 emerging outsourcing destinations for global companies.
In an interview with Sun.Star Cebu, Cebu Investment Promotions Center (CIPC) executive director Joel Mari Yu said he expects Cebu to reach number one, as the business process outsourcing (BPO) industry here is rising compared to that in India.
Costs are surging in the prime cities in India, which has earned a reputation as the world’s back office, as property values and rentals rise and wages increase at an annual pace of more than 15 percent amid a shortage of skilled employees.
Indian outsourcing firms are also feeling the pinch from an appreciating rupee, which dents dollar-billed earnings, forcing them to cut costs by expanding to less expensive locations.
Demand outpaces supply
“With the demand-supply gap widening, newer tier II cities will play a critical role in reengineered globalization models,†said Tholons chairman Avinash Vashistha.
“Destinations will need to provide a greater level of cost effectiveness and operational efficiency.â€
Kolkata at number five and Chandigarh at number nine were the other two Indian locations on the list, which contained three Chinese and two Vietnamese cities as well.
The three hot cities for outsourcing from China were Shanghai at number eight, Beijing at 10 and Shenzhen at 13. Ho Chi Minh City and Hanoi were put at number six and number 12.
The Sri Lankan capital of Colombo placed seventh, Cairo at 11, Buenos Aires at 14 and Sao Paulo at 15, the study’s sponsors said in a statement released in Bangalore Sunday.
The list is based on criteria such as scale and quality of workforce, financial infrastructure, risk environment and quality of life.
But it does not include established outsourcing locations such as Bangalore, the New Delhi capital region, Manila, Mumbai and Dublin that have had a decade’s headstart.
India’s outsourcing companies have thrived by winning work from companies in the United States and Europe that sought to tap the country’s low costs and large employee pool by handing over jobs ranging from answering customers’ calls to risk management and financial analysis.
Pure-play outsourcing firms account for about 10 percent of the $50 billion in revenue logged in the year ended March by the entire information technology industry, which also includes software giants such as Tata Consultancy and Infosys.
Spread
Yu said among Third World countries, the Philippines has an edge in that Filipinos speak better English, or that which is closest to the American twang, compared to Indians, who have an accent.
But, he said, the government should start giving the industry more attention in policy direction to keep that advantage.
“It would be better that the industry would not be concentrated in Cebu alone but in other provinces as well so that qualified workers do not congregate in Cebu.
And this entails better government planning involving other local government units,†Yu said.
In particular, he said, other places should offer English, computer technology and other information technology-related courses for a better-qualified pool of workers.
“Pero ang bottomline sweldo gihapon,†he said, however, adding that Cebu has lower labor cost compared to the competition.
He said the industry would not wither in the next five to six years even though only those with good oral communication skills, the willingness to work night shifts, and the stomach to accept insults (from customers) are suited for the job.
Yu also revealed another problem just came into focus.
He said that while workers are especially educated for IT-related jobs, their training does not include managerial and people skills so that they struggle when promoted to higher positions.
“There is also the need for schools to offer IT curricula that teach students to be more versatile IT workers,†he said in Cebuano.
Linkback:
https://tubagbohol.mikeligalig.com/index.php?topic=3648.0
