RP IT-BPO Industry to Hit $6.8B Revenue Target in 2008 Despite US Econ Crisis

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1 JULY - AUGUST 2008 Vol. 2 - No pages free RP IT-BPO Industry to Hit $6.8B Revenue Target in 2008 Despite US Econ Crisis EXEC. PROFILE p. 14 Sec. Ray Anthony Roxas-Chua, CICT Interview highlights: Making technology more accessible to the people A 16 percent growth rate in the first five months of the year indicates that business is still doing well While the U.S. economy slows down, the Philippine IT-BPO industry continues to grow. This growth, plus the recent correction of the value of the peso vis-a-vis the U.S. dollar, has allayed earlier fears of the industry being severely affected by the U.S. recession and the previously appreciating peso. Figures from the BPA/P Information and Research Team show the industry is on track to hit By Artemio F. Cusi III Research by Ms. Gigi Virata its revenue target of US$6.8 billion by this year. Employment has already increased by at least 40,000 as of May and growth is expected to accelerate by the second half of Turn to page 2 RP IT-BPO Industry to Hit $6.8B Revenue Target in 2008 Despite US Econ Crisis p.2 Employment rose by 40,000 Revenues increased by16 percent The IT sector accounted for almost 50 percent of over-all industry revenue The non-voice sector grew by 22 percent in revenues and 23 percent growth rate in employment The contact center sector adds 3,500 new employees every month O&O Directory Phils 2008 Rolls Off the Press p. 4 More than 550 entries in the first volume with plans for a second Market capitalization, annual revenue, site addresses, executive profiles and other crucial information about BPOs can be found inside the comprehensive tome BPOs Excel in Global Leadership Forecast p. 4 Why leadership program development is important to the growth of the BPO industry The most common objectives of BPO executives How the global BPO sector fares in comparison to other industries ADEPT Trains English Speakers for Fast Employment p. 6 The Philippine BPO industry currently has more than 300,000 jobs 100 hours of training in correct diction, fluency, grammar, accentuation/inflection, proper pronunciation, and business communication 50 percent of those who undergo the training increase their chances of employment BPOs Consider Equity Funding for Expansion Plans p. 6 U.S., U.K., and Singapore regarded as good sources of funding BPO Version 2 p. 8 The next phase of the evolving BPO industry: partnerships in place of vendors A comparison of the global revenues of the Philippines and India The TESDA Scholarships p. 9 More than 20,000 scholarships granted 8,900 scholars graduated 5,600 scholars employed in BPOs 11,000 more scholars planned for the next phase Smaller Call Centers, Big Opportunities p. 12 Php5 million: the start-up capital for a small-scale call center 23 percent increase in the number of contact centers this year, from 105,000 in 2007 to 129,000 in 2008 Why the smaller call centers and the small-scale U.S. firms have a preference to do business with each other Hiring in Contact Centers Expected to Rise p. 12 TESDA partner institutions expected to maintain a 40-percent hiring rate Davao: Next Wave City p. 16 Why this Mindanao city topped Manila and Makati in BPO ratings The 6 major call centers in the region The 300,000 seats in Davao started from a very small number of 200 O&O Directory Philippines 2008 Rolls Off the Press By Romina Tobias The comprehensive tome has more than 550 entries and will serve as hard evidence of the strength of the Phil. IT-BPO industry Offshoring and Outsourcing Directory Philippines 2008, the first publication to comprehensively list Work continues in Manila by night thanks to the booming BPO industry. Philippine outsourcing companies, has been completed and printed. Co-publishers the Business Processing Association of the Philippines (BPA/P) and BPA/P member Asiatype Inc. introduced the directory to the media last August 15 with a tour of representative O&O companies in Eastwood City such as etelecare and Toei Animation. Eastwood, as the first IT Park to host a call center (etelecare), was Turn to page 4 ADEPT Enhances English Speakers for Immediate Employment By Maria Mutya Frio The program that stresses interaction and the practicing of skills has seen a 50 percent increase of employable graduates By 2010, the Philippines will be poised to grab as much as 10 percent of the global share in outsourcing and offshoring pegged at US$13 billion in revenues. To reach that point, however, entails churning one million jobs within the business process outsourcing (BPO) industry where the main driver of growth is the supply of quality talent. The Philippines currently generates around 320,000 jobs. An additional 600,000 employees are needed if the industry is to meet its 2010 aspirations. Hundreds of hopeful applicants queue up every day for a seat at a Turn to page 6 Copyright: istockphoto/brent Charlton BPOs Excel in Leadership Devt, Says Global Forecast By Eva Goyena The training of leaders is integral to the Phil. IT-BPOs intent to capture a significant share of the US$450 billion global market Philippine BPOs excel in developing and implementing leadership programs, according to the Global Leadership Forecast 2008/2009, a research undertaken by the Development Dimensions International (DDI) in partnership with the Business Processing Association of the Philippines (BPA/P). The results of the survey were presented by Dr. Rich Wellins at a breakfast forum last July 11 at the Makati Shangri-La Hotel. HR professionals and non- Turn to page 4

2 BPA/P Stories RP IT-BPO Industry to Hit US$ Continuation from page 1 BOARD OF TRUSTEES FRED AYALA KAREN BATUNGBACAL RAINERIO BORJA GRACE DIMARANAN MYLA ROSE MUNDO-REYES MAULIK PAREKH DAN REYES BENG CORONEL OFFICERS Total industry headcount increased by 40,000 between January and May 2008 FRED AYALA DAN REYES ATTY. BOB GUINTO ATTY. JOBET MAMURIC OSCAR SAñez mitch locsin nette roselo Convergys Country Manager & VP Marife Zamora (center) leads the topping-off ceremony at their company s San Lazaro site. editorial advisory board Convergys site on Ayala Avenue manuel guillermo marian santos hernandez mitch locsin businessinfo inc. ARMIE DUARTE President heinz bulos Publisher cora llamas Editor in Chief Makati City is home to many BPOs. Copyright: istockphoto/simon Gurney Sitel Phils. President Dan Reyes william dizon Art Director DONNA LARAGA Executive Assistant ARTEMIO F. CUSI III VERONICA SILVA-CUSI TINA ARCEO-DUMLAO MARIA MUTYA FRIO EVA GOYENA MARICRIS ORPIANO ROMINA TOBIAS RORY VISCO Contributing Writers WILLIE BICERA SANY CHUA Photographers advertising contacts nette roselo Administrator business processing association of the philippines 9th Flr. The Palisades Condominium 107 perea St., Legaspi Vill., Makaty City Tel: 817-BPAP (2727) Fax: netteroselo@bpap.org PEACHIE G. CORTEZ Operations Director businessinfo Inc. 16th Flr. IJ3 Burgundy Corporate Tower 252 Sen Gil Puyat, Makati City Tel: Fax: peachie@businessinfoinc.com Gigi Virata, BPA/P Executive Director for Information and Research, provided the following full-industry performance report exclusively to : Earlier this year, BPA/P reported that the country s IT-BPO industry would have to increase revenues by 39 percent in 2008 to reach US$13 billion by In 2007, the industry had export revenues of US$4.9 billion; by the end of May 2008, an additional US$0.8 billion was estimated to have been earned by all sectors of the industry. This translates into a 16 percent growth rate for the first five months of If this rate is sustained, at a clip of about three percent a month, the industry will hit its target of US$6.8 billion 39 percent growth by the end of this year. All sectors contribute Virata continues, The IT outsourcing sector accounted for almost half of all revenues earned from January to May This accomplishment reflects employment growth of more than 2,700 additional employees a month in this period a rate of 47 percent that leads all industry sectors. Part of the growth was also the result of an adjustment in the assumptions used to estimate ITO revenues. The new assumptions more accurately reflect rates commanded by IT companies in the Philippines from foreign clients. In the non-voice BPO and KPO sector, revenues grew by 22 percent and employment by 23 percent from January to May 2008, meeting expectations for this sector to grow rapidly this year and putting it on track to hit growth rates of above 50 percent for the year. The animation sector and engineering (or design process delivery) services sector achieved respectable growth rates of 14 and 12 percent respectively for both revenues and employment; they are expected to grow by at least 30 percent in Transcription (medical, legal, and business) statistics were readjusted this year to consider factors left out of estimates in previous years. The sector expects to show growth in 2009 using the more accurate data established this year. Virata also says, The contact center sector remains the largest sector and from January to May 2008 had achieved growth of eight and nine percent in revenues and employment, respectively. From almost 300,000 employees in 2007, the sector added about 3,500 new employees a month. In addition, with the announced expansion and obvious frenzied activity of most, if not all, major players in this sector for the coming months, it is very likely these seemingly mature growth rates will accelerate rapidly in the second half of the year. The Phil. IT-BPO industry is on track to hit its 2010 revenue target. It does seem that BPO companies with a strategic direction are ably moving forward despite the economic downturn. Strategic moves While the volatility of the peso may present a challenge, companies have applied measures to lessen the impact of the strong currency and remain headstrong in pursuing their expansion plans for the current year and the next. Convergys, for instance, considers the present situation as just part of the usual economic cycle of ups and downs. Convergys always tries to ensure that we are winning new business and structuring our financial agreements with clients to mitigate risk associated with cyclical economic trends, says Marife Zamora, the company s Vice-President and Country Manager.

3 BPA/P Stories BPOs also maintain a wide client base and tap different markets to hedge against unpredictable external market forces. We are not feeling the effects of the economic slowdown because we have diverse clients involved in the telecoms, finance, travel, retail and consumer products, Sitel Philippines President Dan Reyes says. We do not have a customer that represents 20 percent of the total pie. In terms of geographical presence, Sitel is making its presence felt among clients in Europe and Australia. Hence, if there is a decrease in volume, it is not coming from Sitel s top performing partners, according to Reyes. When a BPO has a number of effective strategies at its disposal, the better able it is to keep pace with increasing demands for its services. It is also likely to be less vulnerable during a global economic slump. Accenture Country Managing Director Beth Lui cannot overstress the crucial role of the strategic nodes for the company. The challenges in the current global environment notwithstanding, Accenture s Delivery Centers in the Philippines remain among the most strategic nodes in the company s global delivery network, she says. Convergys has also been diligently increasing its centers of operations. Last May, it announced that five new integrated contact centers would be established up to 2009 in response to the rising client demand. Says Zamora: This translates into approximately 7,000 additional employees and will include three new facilities in Metro Manila, our third in Cebu and a new locale, Santa Rosa, Laguna. Sitel is similarly expanding its manpower pool in the Philippines. Reyes says that the company is currently concentrating on Northern Luzon and hopes to apply the same successful model that it is using in Baguio City, where it is now the biggest employer. In the past, Texas Instruments held that record. Sitel, however, now also has Central Luzon on its radar screen, a logical move given the development of the region. We are able to secure an agreement with the province of Tarlac, says Reyes. We are in the process of finalizing agreements with other provinces. Reyes, though, says that Sitel is not relying solely on a healthy pipeline of clients to keep itself going. Sitel previously prepared financial covers to protect its operations from currency fluctuations, he says. At the very least, he says, he is quite sure that Sitel s numbers will not fall below its achievement last year. Conservatively, we will hit the target of 2007, Reyes says. Accenture s Lui, for her part, says, We are on track with our growth plans, and are able to ramp or scale up rapidly as the demand increases. One positive note in the current challenging economic environment is that it raises to levels of greater efficiency and strength industries that are able to adapt, such as the IT-BPO industry. The experiences also allowed BPOs in the Philippines to show how crucial they can be to the survival of other industries abroad. The Philippine advantage The Philippines will continue to play a significant role as more and more global companies look to outsourcing, not just to cut costs but to achieve operational efficiency and high performance, Lui says. For Reyes, the Philippine IT-BPO industry, because of its quality service at a very competitive price, is serving as one of the best solutions to address a global economy in the doldrums. If you get better service for a better price, then it makes perfect business sense, he says. The one that will take advantage of this will be best secured easily. That s one strategy that the local call center industries are adapting: diversifying their services offerings and implementing cost-efficient measures to rake in the revenues. The call center industry, which provides mainly voice services to many local and global organizations, has been hurting from fluctuations of the foreign exchange rate since most of its clients are multinational companies. But chief executive officers present at the roundtable discussion of the annual CCAP (Contact Center Association of the Philippines) Conference & Expo held in Manila last July 23 said they are not as hurt now as last year when the peso was averaging at Php39 to Php40 to the U.S. dollar. At that meeting, Reyes, a CCAP director, noted that the current average exchange rate of from Php44-P45 to the dollar has somewhat eased any adverse impact of the fluctuations. He maintained that the call center industry would continue to bring in revenues of as much as US$4.35 billion by the end of the year. In the long-term, Reyes says, the U.S. economic slowdown is expected to benefit the call center industry as some U.S. organizations are expected to outsource some of their operations outside their country s borders. Aside from receiving accolades from several foreign groups, Reyes says the Philippines is no longer competing on cost arbitrage alone. He points out that quality work will ensure that the Philippines will be chosen for outsourced BPO services. Reyes says that the local call center industry remains robust despite the challenges. He maintains, We have been creative and resourceful in solving problems and finding opportunities for growth. z Report by Veronica Silva-Cusi ERRATUM: In Breakthrough s article on the O&O Directory in our last June issue, the photo of Mr. Philippe Gauthier, Asiatype Inc. Chairman was mistakenly identified as Mr. Philippe Saurel, Asiatype Inc. s Managing Director. We rectify this by the proper identification of Asiatype s leaders seen in this photo with the BPA/P Board: Mr. Saurel is the gentleman at the extreme right while Mr. Gauthier is standing at the center. Apologies to the parties concerned. The Ed.

4 BPOs Excel in Leadership Devt... Continuation from page 1 BPA/P Stories O&O Directory Philippines Continuation from page 1 HR leaders in Philippine-based BPOs were asked to complete a survey and asked to identify the most important business priorities for their particular organization. They were also asked to evaluate the quality of leaders, as well as the leadership development programs in their respective organizations. Many of the local respondents were first-level managers in multinational companies. In comparison, the global sample of the overall total group of HR professionals and leaders from the rest of the 76 countries surveyed comes mostly from the mid-level to senior-level management. Still, the prioritized objectives of Philippine BPO executives turned out to be similar to their international counterparts: the improvement of talent and growth; the enhancement of customer relationships; and developing the quality of service. The survey revealed, though, that Philippine BPO executives are not as driven (as of yet) to innovate, build new capabilities, and strengthen their global presence compared to their foreign colleagues. One explanation for this is that Philippine leaders are still focused on consolidating the industry s position as an emerging BPO leader in the world. Strengths and areas for improvement The study also outlines out how the global BPOs compare more favorably than the companies in other sectors: they use more development methods, particularly concerning work methods; are far more likely to hold their managers accountable for leadership development; have processes to identify potential leaders and programs to accelerate their training; and are prepared with succession plans for first-level leaders. DDI also points out areas of improvement for BPOs, specifically, the general level of leader dissatisfaction with development offerings and the low ratings of the quality of the programs. BPO organizations in the Philippines would benefit from taking a closer look at the content of their programs to ensure that their execution efforts are being maximized. Hopefully, the results of the survey ( globalleadershipforecast2008.asp) will help BPOs improve even further their leadership enhancement programs to capture an ever bigger share of the world IT-BPO market. As the study exhorts, Leadership development is becoming increasingly important as the business expands and the Philippines works to maintain its position as a global hub for operations. z The O&O Directory selected to symbolically represent the birth of the IT-BPO industry. Indeed, the density of the industry at Eastwood today aligns well with the thickness of the O&O directory, whose 364 pages contain 558 entries. The O&O directory is the first of its kind in the Philippines and is projected to become the premier guide to the country s information technology-business process outsourcing industries. It covers industry sectors such as customer contact center, software development, computer graphics/ animation / publishing services, information processing and management, engineering design, and support services. The BPA/P-McKinsey Roadmap 2010 Team developed an inventory of company listings in 2007 which Team 2010 continuously updates and expands, says Gigi Virata, BPA/P Executive Director for Research and Development. Asiatype Inc. devoted two years of research to build its own database. BPA/P and Asiatype then decided to combine resources to publish and distribute the directory. Envisioned to be the most comprehensive guide to the country s IT-BPO services, with profiles of top and emerging companies in the Philippines, the O&O directory will help boost the country s position as a top global IT- BPO player. What we have here is not just a complete and thorough list of Philippine industries and corporations, we are offering the official, most credible source for BPO information and services, says Virata. Features of the directory include information about the local and foreign companies in the Philippines (e.g. market capitalization, year of establishment, annual revenue, addresses and sites, address, specific areas of operation and members of the management team). Also among the provided data are senior executive contact information, a magazine section with editorial features and articles on the IT-BPO industry, business facts, real estate information, howto-guides for investors (guidelines to help firms set up a BPO, including the procedure in filing for applications for tax perks), and lists of investment promotion agencies and L-r: Jamea Garcia, BPA/P Exec. Dir. Talent Development, BPA/P CEO Oscar Sañez, Cathy Ileto, BPA/P Exec. Dir. External Relations, Asiatype Inc. Chairman Philippe Gauthier, and Gigi Virata, BPA/P Exec. Director Info & Research BPA/P CEO Oscar Sañez with Asiatype Inc. Managing Director Philippe Saurel affiliations, IT parks and buildings, maps that highlight cities of the cyber corridor all in full-color pages. Constant updates The greatest challenge in publishing such a book would be keeping it up to date. Virata points out, The industry is so dynamic and is growing so quickly. We have to keep track of company information such as new branch locations, contact information, number of employees, newly set up companies, or companies that have moved, merged, or closed. We must be efficient in keeping the entries updated, which is also the reason why we are planning to publish a follow-up edition containing corrections and additions based on feedback from companies. Asiatype has set up a system that allows companies to review and update their profiles for free. More companies may also want to submit their complete profiles for inclusion. We foresee greater participation from other companies, she continues. The second edition will definitely be much thicker though we will not release it earlier than six months after the 2008 directory is released to the public. The O&O directory will be an effective marketing tool for helping the industry reach its 2010 targets of US$13 billion in revenues and 900,000 employees. In 2007, it is estimated that revenues reached US$5 billion and employment grew to 300,000 employees. Yet Virata notes, Many potential foreign investors still do not know how large the BPO industry is in the Philippines. Not everyone knows that we are the second largest after India and are the premier destination for voice-oriented customer services. The directory will serve as hard evidence on the size, diversity, and strength of the country s IT-BPO industry. It will help correct some misconceptions that sometimes appear in the media, especially in the foreign press. The O&O directory retails for US$295 (or Php13,500). Asiatype with more than a decade of experience in the field of e- publishing, digital imaging, and prepress solutions servicing to clients here as well as in the United States and Europe has its own distribution outfit that will be releasing the directory locally and internationally. Copies will be available in local bookstores. BPA/P will also be marketing the publication to its members (who will receive a 10 percent discount) and other publics such as on road shows and monthly membership meetings where order slips will be on hand. Asiatype Distribution is also accepting orders through its website. This directory will be a very useful reference for many in the industry, says Virata. We expect companies will make sure they are included in the directory and many will want to benefit from the readership through advertising. For this first edition, advertisers vied for the prime pages. She concludes, The directory will be a useful kit for potential investors, businessmen, venture partners, financial institutions, and other multinational corporations. The O&O directory will lead interested parties directly to their point of interest or give them a good overview of the resources available in the Philippines. z For correction, updates and new entries, contact Mr. Levi Balanon, Asiatype s Manager for Directory Publications Department at telephone number local 237 or lbalanon@asiatype.com.

5 BPA/P Stories ADEPT Enhances English Speakers... Continuation from page 1 contact center. At present, though, out of a hundred applicants, only six to 10 percent are immediately hired. Forty to 50 percent of the young hopefuls end up as potential employees or near-hires who need additional training. Jamea Garcia, Executive Director of Talent Development for the Business Processing Association of the Philippines (BPA/P), confirms that at least 100 hours of training are needed for potential employees to land that job. But they re getting there, she says. We started by leveraging existing training programs and brought it down to the college level, says Garcia. We tweaked the program and rolled it out to schools. University partnerships While BPA/P member companies have their respective training programs for their employees, Garcia looked at the commonalities of these programs. The BPA/P working team then proposed a program that specifically addresses the language proficiency of graduating students, making them employable straight out of school. Aside from the fact that English is the lingua franca in the industry, which is primarily geared for voice operations, basic competency in it is also needed for an employee to communicate in back-office operations, as well as to use technical and software systems. Thus, the Advanced English Proficiency Training (ADEPT) Program was developed. ADEPT is a training program that harnesses a graduating student s proficiency in the English language. BPA/P piloted the program with four of its member companies, namely epldt, etelecare, Convergys, and ICT Group. These companies partnered with select universities recommended by COCOPEA, namely, Philippine Women s University (PWU), Emilio Aguinaldo College (EAC), University of the East (UE), and Jose Rizal University (JRU). The companies trained the teachers, either selected by them or nominated by the school, on the prescribed methodology of conducting the program. By partnering with schools that adopt the ADEPT program, companies cut their time for recruitment and training. The methodology of the program is different from English classes in universities and colleges which are primarily academic in approach, Garcia explains. ADEPT emphasizes on more time for interaction and practicing of skills. Packed in a total of 100 hours of training are subjects like correct diction, fluency, grammar, accentuation/inflection, proper pronunciation, and business communication. The program prescribes at least three hours per session to provide ample time for practice and interaction, as opposed to the usual onehour English class that the university may already require. It limits class size to 25 students to allow for greater interaction with the teacher and among peers. The pilot companies let the schools run the program. Each school may then use its own teaching approaches or strategies, but these must include a minimum curriculum required by ADEPT. Some schools have offered it as a prerequisite to graduation, others as an elective, while yet another offered it as a full course with corresponding academic credits. Partner schools developed the assessment tool for selecting the students who will undergo the pilot training. One pilot company opted to do the student selection and interview. Training teachers Some schools recommended teamteaching for the program in which one teacher may be stronger in grammar while the other may be strong in thematic areas like customer service or training. Others tried out teacher buddy-up system and used additional on-line materials and classes. By the end of the pilot program, there was a marked increase of 50 percent employable graduates who underwent the training. The same increase was observed among schools whose students were selected by their respective schools and those selected by the pilot company. It was also discovered that there were fewer student fall-outs who were enrolled in training that earned academic units than those who were not earning units. In May 26-30, BPA/P held a Methods Training where around 50 participants from 20 universities came. Upon assessment of the teaching methods, 70 percent understood and agreed with the methodologies that ADEPT requires. This is primarily keeping the class size manageable (maximum is 25 students) and an hour training, with at least three hours per session for application of skills. BPA/P is finalizing the courseware that includes a facilitator s guide, teacher qualifications, pre-assessment tool for written, speaking and listening abilities, as well as a student workbook. It is scheduled to roll out the program in the second semester of the current school year. BPA/P targets around member companies to participate with other schools including Far Eastern University, Centro Escolar University, University of Cebu, as well as other schools in the Visayas and Mindanao. z BPOs Considering Equity Funding for Expansion Plans The U.S., U.K., and Singapore viewed as good sources of funding A survey of executives of companies in the information-technology-businessprocess outsourcing (IT-BPO ) industry showed that a majority of respondents are actively considering some form of equity funding to support their expansion plans. But only 27 percent of the respondents plan to seek equity funding in the next six months to one year, and only six percent two respondents plan to seek equity funding in the next six months. Thirty-five percent of respondents, meanwhile, indicated that they have no plans to seek equity funding. Conducted by Outsource2Philippines. com (O2P) in cooperation with the Business Processing Association of the Philippines (BPA/P), 81 respondents representing BPA/P members and members of affiliated associations participated in the survey. Distributed to 305 prospective respondents, the survey had a response rate of 27 percent. Among respondents contemplating equity funding, almost 60 percent plan to raise between Php100 million and Php500 million, while 12 percent target equity infusion of between Php500 million and Php1 billion. One respondent plans to seek between Php5 billion and P10 billion in equity funding. About 30 percent of respondents indicated equity requirements of less than Php100 million. These results suggest that respondents are confident their organizations will continue to grow but that access to equity funding will impact that rate of growth, says O2P CEO Frank Holz. Sources and time frame The survey showed that those thinking of equity funding were considering a variety of sources, including angel investment, venture capital, and an initial public offering. But most respondents (54 percent) indicated a preference for a private placement. Loss of control appeared to be an important factor in seeking equity funding for respondents that favored private placement. Over 70 percent of respondents who indicated private placement indicated that loss of control represented a significant downside to seeking equity funding. Most respondents (60 percent) said that expansion of existing facilities and new business development initiatives are the principal motivators for seeking equity funding. Forty-nine percent said funds raised would be used to finance development of new facilities. Clearly, development of the equity market in the Philippines can significantly accelerate industry development, says Oscar Sañez, BPA/P CEO. Loss of control was also the biggest disadvantage (53 percent) to equity funding in the perception of respondents seeking equity funding now or in the future. Fortyseven percent identified burdensome regulatory requirements and 44 percent said the availability of other sources of funding aside from equity funding might result in a decision to refrain from seeking equity funding to finance expansion. The United States was viewed as a good source of equity funding by almost 70 percent of the respondents, followed by the United Kingdom (47 percent) and Singapore (44 percent). Thirty-five percent considered the Philippines a good source of equity funding. Almost all respondents considering equity funding now or in the future consider the Philippine financial system at least somewhat conducive to setting up and funding a technology startup. Only 17 percent said it is not conducive, and 17 percent said it is very conducive. Sixty-seven percent indicated that the Philippine financial system is somewhat conducive or conducive to setting up and funding a technology startup. Sixty-eight percent of respondents indicated that their companies have a good or excellent track record of profitability. z BPA/P Executive Director for Talent Development Jamea Garcia ADEPT stresses interaction in the English communications skills module. Fr. Nebres was present during the launch of the program. Fr. Ben Nebres, Ateneo de Manila President and Head of the Presidential Task Force on Education

6 Cathy Salceda-Ileto, BPAP Executive Director for External Relations celebrated her 33rd birthday last June 27 at the Pinot Function Room of the Tower Club with friends from the industry, government, and media. BPA/P Updates BPA/P Director Cathy Ileto Celebrates Birthday Cathy was joined by her husband James, the Segment Head for the OFW and E-Commerce market of Globe. The highlight of the party was when her colleagues and friends surprised her with their birthday wishes and messages. Cathy s boss, Oscar Sañez, recalled the many road shows around the world that the two of them have done together, and thanked her for providing a different perspective to the BPA/P team. BPA/P President Dan Reyes expressed the industry s appreciation for her work for the sector and the country, and thanked her for helping drive many of the industry s milestones. Commission on Information Communications Technology (CICT) Commissioner Monchito Ibrahim also acknowledged Cathy s go-getter attitude as an important characteristic, especially in dealing with policymakers during Senate and Congressional hearings, and in lobbying for bills to be passed into law. KSearch CEO and Membership Committee Head Manny Guillermo said Cathy s work makes him proud to be part of BPA/P and the industry. The most touching birthday message was from James, who was moved by the devotion of his wife s colleagues for her. He was visibly proud of Cathy and her work, quipping, You should see her at home. It s still about BPA/P and the country. Other guests include: Cathy s kumare, ABS-CBN newscaster Karen Davila; Karen s husband and communications executive DJ Sta. Ana; friend CREAM President Imee Marcos and her son Matthew; and executives from PLDT, Colliers, SOS, Jebsen and Jessen, as well as dignitaries from the government of Netherlands who are helping promote our IT-BPO industry to the Dutch market. z l-r: Beverly Satsatin, Account Manager, Jebsen and Jessen; Paula Schindler (3rd from left) with her fiancé (second from left); Gigi Virata, BPA/P Exec. Dir. for Info & Research; Philip Añonuevo, Colliers International; Jamea Garcia, BPA/P Exec. Dir., Talent Development; Precy Katigbak, PLDT Business Group; the birthday celebrator, Cathy Ileto, BPA/P Exec. Dir., External Relations; Charles Solomon, CEO, SOS; and Manny Guillermo, CEO, KSearch Consulting l-r: Charles Solomon, CEO, SOS; Beverly Satsatin, Account Manager, Jebsen and Jessen; the birthday celebrator, Cathy Ileto, BPA/P Exec. Dir., External Relations; Imee Marcos, President, Creative Media and Film Society of the Phils.; Jamea Garcia, BPA/P Exec. Dir., Talent Development; and Matthew Marcos, Imee s son l-r: Cathy Ileto, BPA/P Exec. Dir., External Relations; James Ileto, Globe Telecom Segment Head for the OFW and E-Commerce markets and husband of Cathy; and BPA/P CEO Oscar Sañez l-r: ABS-CBN newscaster Karen Davila; Cathy Ileto, BPA/P Exec. Dir., External Relations; and James Ileto, Globe Telecom Segment Head for the OFW and E-Commerce markets and husband of Cathy Sitel Phils. President Dan Reyes, Info and Research BP/AP Exec. Dir. Gigi Virata, and KSearch Consulting CEO Manny Guillermo enjoy a laugh before dinner.

7 BPA/P Updates Singapore Sojourn for BPA/P By Cathy Ileto Executive Director for External Relations Meetings with investors, addressing the poaching issue, and a TV appearance were among the trip s highlights The Philippine information technologybusiness process outsourcing (IT-BPO) industry, represented by executives from the Business Processing Association of the Philippines (BPA/P) and some of the more prominent telecommunications and software companies in the country, trooped to the island-nation of Singapore to attend the CommunicAsia event 2008, undoubtedly the biggest telecommunications and ICT event in this part of the Asia-Pacific region. The most significant highlight of the Philippines participation at CommunicAsia was when BPA/P Chief Executive Officer Oscar Sañez and I met with BPA/P s counterpart industry associations from other countries who attended the weeklong event. Also, an important aspect of the country s participation was the Philippine Business Forum, which was attended by various investors from all over the world. During the forum, the Commission on Information and Communications Technology (CICT), led by the amiable Secretary Ray Anthony Roxas-Chua III, made a country presentation while the indefatigable BPA/P Marketer Mr. Sañez did a Philippine IT-BPO industry presentation. These were followed by corporate presentations from the pillars of the Philippine telecommunications industry: PLDT and Globe, plus the five software companies Astra Software, Tsukiden, Imperium Technologies, SysNet, and Berthaphil. Another important part of our itinerary there included a meeting with the Infocomm Development Authority (IDA) of Singapore, the information and communications industry champion of that country. We discussed a whole range of issues, including the issue of poaching, in which Singapore-based companies are luring Filipino IT and creative professionals to work there. Education and media BPA/P suggested to the IDA that instead of poaching from the Philippines pool of IT and creative professionals, they should partner with Filipino IT and animation companies in order to foster a more transparent and healthy business relationship between the two countries. For its part, it turned out that the IDA welcomes the idea of multi-sourcing jobs to other countries. At present, the BPA/P is lobbying to make the Philippines one of the most preferred if not the preferred location for Singaporean firms for their IT-BPO needs. Recently BPA/P has been receiving inquiries from Singapore-based IT- BPO companies looking to outsource their requirements overseas. BPA/P also met with officials of the Lee Kuan Yew School of Public Policy. There, Mr. Sañez and I shared BPA/P s aspirations and the interesting Philippine IT-BPO story. At the end of the consultations, LKY officials assured BPA/P that they would definitely make a case study about the latter in Singapore. School proponents bared plans to send a team of public policy students to the Philippines and make a report about what BPA/P is all about, including a perspective on the now famous Roadmap On the investment side, BPA/P met with executives from two Singapore-based companies keen on establishing IT-BPO operations in Manila as part of their expansion plans. One company plans to set up a helpdesk in order to serve their existing clients while the other one is an engineering design company specializing in fire protection systems. Finally, a major highlight of BPA/P s Singapore visit was when the columnist s good friend and former media colleague Rico Hizon interviewed Mr. Sañez on BBC s Asia Business Report on June 18. Sañez discussed the possible implications of the economic slowdown in the United States on the Philippine IT-BPO industry, plus the impact of current U. S. political developments. Hizon was among the Philippines top broadcast personalities before moving to Singapore and joining BBC. z NASSCOM s BPO Strategy Summit 2008 projects that process expertise is the wave of the future At NASSCOM s BPO Strategy Summit 2008, held on June 9 and 10 in Bangalore (now called Bengaluru), participants announced the end of business process outsourcing (BPO) version 1. In the world of BPO v2.0, Indian outsourcing companies aim to provide clients with process or domain expertise. This means these companies would be working with their clients as partners rather than vendors. They would offer highly specialized knowledge in processes or fields that can help improve their clients businesses. To turn India into this hub for process expertise, NASSCOM officials and CEOs of Indian outsourcing companies have called on all stakeholders to create the ecosystem needed to support this evolution. Massive public-private partnerships are required to upgrade educational The Dawn of BPO v. 2 By Gigi Virata Executive Director for Information and Research Ms. Virata visits Mysore, southwest of Bengalaru and one of the 50 citiies assessed in the recent NASSCOM-AT Kearney location study. institutions and infrastructure, including social services and housing. They point out that India has the largest pool of reengineering workers in the world and higher levels of investment in education and training are crucial. Like BPA/P, NASSCOM remains optimistic about not just the survival of the industry but its sustained growth. This positive outlook is based on reports from global research companies that the demand for global professional services remains large and that the size of the penetrated market will continue to grow. Like BPA/P, however, NASSCOM recognizes that success in the industry will require players to become savvier in the ways they operate. Strategies need to be developed to charter growth and address challenges. Evolving industry Part of the strategy of evolving into an enabler of business transformation (from an offshore vendor), for example, might entail focusing on a particular vertical such as banking, financial services, and insurance (BFSI). Within verticals, specialization in particular services may also become part of the strategy. In insurance, for example, companies may decide to specialize in claims processing and offer clients in-depth expertise in this line. The challenges raised at the summit were familiar: attrition, tenure, cost of employment, unbalanced geographic growth, and negative perceptions of the industry by the media and general public. Companies shared some unique approaches to address these issues. Dell, for example, has a program it calls the Platinum Club to improve tenure. Employees stay in operations longer and find fulfillment in becoming a vital source of knowledge on customer preferences and peculiarities. BPO Export Revenues (US$ billion) Philippines % % India % 25 56% Others % % Global % % Note: ITO and ESO not included This program has not only increased tenure, it has also increased productivity. AXA Business Services, meanwhile, has reduced employer cost using targeted recruitment processes -- that is, by hiring employees with only the right skills (not more) and training them more precisely in the skills required (not more). NASSCOM is also addressing the issues of industry concentration (80 percent) in seven Indian cities. They would eventually like to see 40 percent of the industry located in cities other than the leading seven. A NASSCOM AT Kearney study assessed up to 50 Indian cities that can host BPOs. The cities are classified as leaders, challengers, followers, and aspirants based on metrics similar to those used in the BPAP-CICT- DTI City Scorecard. Finally, NASSCOM members grappled with what they saw as underserved bashing by the media and general public. In spite of the industry s achievements US$11 billion in export revenues, 700,000 workers employed, 2.8 million indirect beneficiaries negative perceptions persist. Suggestions to address this negativity included introducing business process education in schools and colleges, making individual and collective responses in the media, having corporate social responsibility programs initiated by the industry, and keeping communication lines open between the government and NASSCOM. It is easy to see, from attending two NASSCOM conferences this year, that the similarities between the BPO industries of India, the Philippines, and other countries could form the basis for mutually beneficial knowledge sharing and collective actions. The market is big enough, after all, for two leading players and more to work together to more effectively address common issues. BPO Export Revenues. At current targets, Philippines will hold BPO market share and India will increase market share at the expense of other global locations by z Source: Author s analysis of McKinsey Global Institute data

8 BPA/P Updates From the CEO Desk Experience Excellence My former boss at P&G had this to say when he was assigned abroad for the first time: You don t know how good you are until you leave the country. We may not have the best infrastructure facilities in the world but when it comes to recruiting talent, we can produce them. Our workers have very good base skills and have the right work attitude. I asked an American HR professional recently about her experience with recruiting Filipinos for the BPO facility they set up here last year. She said, Very good base talent. You just have to invest a bit more in training but once they have received the right training, they become excellent workers, very dependable and quite fun to work with. Her response revealed a couple of insights worth noting. One is the element of education and the decline in its quality in the past decade that is now requiring supplemental training. The other point is the strong potential for excellence of the Filipino worker who is driven and has the intrinsic desire to improve himself/ herself. Harness homegrown talent The reputation of the Filipino workers abroad is already well known. What needs to be announced worldwide is that the workers left here in the Philippines are just as good, if not better. With a lot of support from the private sector in the form of education and training initiatives, we can re-tool and refresh our skilled workers. With projects like curriculum development through industry-academe partnerships in areas like English language, science, management and engineering, scholarships for short-course programs in software training, animation, auto-cad, language proficiency, etc, and faculty development initiatives particularly with science and math in the public school system, are all helping to create positive results for the country in the light of the government s inability to deliver all the solutions needed in education. BPA/P is leading the charge in promoting our capability in the IT-enabled services industry beyond the customer care sector which we are already known for. The non-voice sector is actually the bigger addressable market worldwide with Philippine share at less than 5 percent currently. One issue of will be dedicated to promoting our nonvoice sector. In November, the partner associations of BPA/P The Medical Transcription Industry Association of the Philippines, Inc. (MTIAPI), the Animation Council of the Philippines, Inc. (ACPI), the Philippine Software Industry Association (PSIA), Contact Center Association of the Philippines (CCAP) and the Game Development Association of the Philippines (GDAP) - will be joining forces in a conference dedicated to showcasing our capabilities in non-voice services. To all our service professionals in this sector our animators, our IT professionals, our legal/medical transcription agents, our technical writers, editors, lay-out artists, our game developers, our HR professionals, our accountants, our finance analysts, our architects and our engineers continue to drive excellence in your fields. Congratulations to all of you. z 20,000+ Individuals Awarded TESDA Scholarships By Jamea Garcia Executive Director for Talent Development The scholars come from as far as Davao and Surigao The Business Processing Association of the Philippines (BPA/P) and the Technical Education and Skills Development Authority (TESDA) have inked a memorandum of agreement (MOA) on the implementation of the PGMA (President Gloria Macapagal- Arroyo) Training for Work Scholarship Program (TWSP) for the O&O industry. Under the MOA signed last February 4, TESDA would turn over to BPA/P Php350 million worth of PGMA-TWSP certificates for distribution to BPA/P members and non-member companies who have qualified training programs registered with TESDA. The scholarship certificates may be used for the near-hire training of call center agents, medical transcriptionists, 2D and 3D animators, JAVA, COBOL, Oracle and Microsoft.Net programmers. The first batch of certificates was turned over to BPA/P in April and May. To date, BPA/P has received a total of Php125 million worth of PGMA-TWSP certificates and has awarded more than 20,000 scholarships nationwide (BPA/P distributes certificates reach as far as Davao and Surigao). Almost 8,900 scholars have also graduated from the various training programs available, with 5,400 of these graduates now currently employed within the O&O industry. This represents a 60 percent overall employment yield. On a per-sector level, based on the current graduates, the employment rate is 58 percent for the call center, 82 percent for medical transcription and 100 percent for software. We expect these numbers to go even higher as we graduate the additional 11,100 scholars in the pipeline. BPA/P is now awaiting the turnover of the remaining balance of the PGMA-TWSP scholarship certificates allocated for the O&O. z

9 10 BPA/P Updates BPA/P Visits ICT Group s Marikina 2 Site John Langford, ICT EVP (center) and BPA/P Exec. Directors Jamea Garcia (2nd from left) and Gigi Virata (1st from right) BPA/P staff Zyra Rayos del Sol (2nd from left), Nette Roselo (3rd from left), and Rona Quilban (1st from right) accompanied Mr. Langford and Directors Garcia and Virata. By Zyra Rayos del Sol The lone Marikina call center locator prioritizes the health, welfare, and morale of its many employees The premise was that it pays to get out of the office once in a while and see how its members facilities operate. More importantly, the excursion would enable them to take a first-hand look at how call center agents actually handle live calls. And so recently, executives and office personnel of the Business Processing Association of the Philippines (BPA/P) took time out from their hectic schedules and paid a visit to one of its members call center facilities located right at the heart of historic Marikina City, arguably the best run and cleanest city in the metropolis. The BPA/P team visited the Marikina 2 facility of the ICT Group, one of two modern facilities of the company in the city. The ICT Group is the only call-center locator there and the biggest employer in terms of providing viable employment to the people of Marikina City, according to John Langford, Executive Vice-President of ICT. The eager and excited BPA/P team immediately began its tour from where else the reception area, where it passed through a long queue of applicants waiting to undergo the company s rigorous recruitment process. The group then visited the ICT Group s modern training rooms and world-class testing facilities before proceeding to the actual call center floor, where all the magic and excitement and stress happen. But the team soon realized that being in a call center does not always mean hard and toxic work. Call center operators like the ICT Group, after all, always look after the health and wellness of its employees by providing only the best resting facilities one can find. At the ICT, there were nap rooms for agents to catch some quality sleep in and rest after long hours of talking to clients over the phone. Likewise, to take off their employees minds from their heavy workload from time to time, human resource specialists of the ICT Group come up with various stimulating activities on certain days of the week such as the fun day every Thursday, and their pretending day where agents can wear different costumes to portray their favorite characters. And to recognize top agents, the company has its own version of the Wall of Fame, which incidentally, also has its own counterpart, the Wall of Shame. Langford, however, said that the shame wall is not meant to ridicule employees who may be lax in their performance. Rather, he said, it is supposed to challenge them to strive and achieve only the best in the work they do as part of their personal and professional growth. And yes, the BPA/P team did manage to observe a call-center agent handle a live call in action. The visitors came away one in their belief that call-center work is truly all about testing one s patience and customer service focus, which is actually what endears many Filipino agents to their clients. z BPA/P July Membership Meeting The BPA/P s July General Membership Meeting took place last July 28, 4:30 p.m. 9 p.m. at the City Kart Racing, Sucat, Parañaque. Guest speakers were David Leechiu, Country Head of Jones Lang Lasalle Leechiu, who spoke on the nextwave cities, and Juliet Go, COO of Sodexho Philippines, who did a presentation of her company. z BPA/P members line up for registration. BPA/P CEO Oscar Sañez. Juliet Go, COO of Sodexho Philippines David Leechiu, Country Head of Jones Lang Lasalle Leechiu The speakers and BPA/P Exec. Director Jamea Garcia (first from left) rally the members. Fun after the formalities

10 12 In Sights Small Call Centers, Big Opportunities By Tina Arceo-Dumlao Thriving small call centers in the country prove that size does not matter It does not take a lot of money to get a foot in the Philippines booming call center industry. Specifically, it will require about Php5 million to set up 20 call center seats, and that includes the computers, office space, office equipment, and the line connection to connect the local operations with the clients abroad, mostly from the United States. Considering that some restaurant franchises will run up to about that much, it makes more sense to put your eggs in a call center operation, which offers more revenue potential and quicker return on investment. This explains why call centers have sprouted all over the Philippines, from Baguio in the north to Davao and Cagayan de Oro in the south. Increasing trend Data from research agency Callcentre. net show that the number of contact center seats in the country is estimated to hit 129,000 this year, up 23 percent from last year s 105,000. All call center companies are cashing in on the unabated trend of companies abroad to outsource some of their noncore operations like customer service, accounting and payroll management to countries like the Philippines to save on operating costs without sacrificing the quality of their product or service. The Fortune 500 companies were among the first to see the value of cutting down on labor costs through outsourcing and offshoring, which is the establishment of service hubs in countries other than where they are headquartered. Dell Computers, HSBC, Citibank, and Chevron are just some of the large global companies that have set up part of their Asia-Pacific backroom operations in the Philippines, and more expected to follow. But the small- and medium-scale enterprises are also seeing the value in outsourcing and offshoring, and this has given life to the small call center industry in the Philippines. Call centers are considered small if they have a maximum of 200 seats. The top 10 firms, by comparison, have thousands of seats in operation with an average of 975 seats per company. Joji Ilagan Bian, president of the Philippine Call Center Alliance, says that the small- and medium-scale call centers some of which have as few as 20 seats operate differently from the large ones that dominate the industry. First, they are owned by Filipino entrepreneurs who are willing and able to take on different roles. They are owners, trainers, marketing agents, and team leaders rolled into one. They take on a very hands-on role in management and are often on the floor with the agents. Second, small call centers deal with small U.S. firms that have very simple needs. There are clients who require as few as five seats since all they want are database managers or appointment recorders. Since we and our clients are SMEs, we speak the same language, Bian says, When we talk about payment terms, they know that we cannot extend long credit terms because we run a small operation. Bian says that the 50 members of the organization are all Filipino-owned and offer voice and non-voice services. The voice services are mostly in telemarketing selling travel plans, time-share contracts and even vitamins. The non-voice services, meanwhile, include data generation, setting up of appointments, and transcription. The small call centers cater to those companies whose needs are too small for the big call centers to attend to, says Bian who owns Six Eleven Inc., I have a real estate client who only needs five seats and another that needs 40. The requirements vary. Big market While believing that there is a big market out there just waiting to be tapped, she admits that the small call centers given their size and lack of network abroad are having a hard time getting enough clients to expand their operations. We got our clients usually through friends or colleagues abroad who know SMEs in the United States who could use our service, unlike the big call centers who really have operations abroad, she says, We also rely on our existing clients to talk about us abroad. Like the big call centers, the small ones also have to face the problem of hiring and retaining qualified call center agents, with the former the more difficult problem. Industry statistics indicate that out of 100 applicants, only three will meet the requirements. The culprit is inadequate English skills. Retaining our agents is not so much a problem as hiring because we have to compete against the bigger call agents who can offer much more, Bian says. But once we do get them, they tend to stay because they have less stress and we can also offer a competitive salary. She says she is optimistic about the small call center industry despite the problems because she believes outsourcing is more than just a trend. It s here to stay, she says. And while the strong peso is causing a headache for the small call centers that do not have as long a financial line as the big ones, Bian says, What we are doing to cope is increase the volume of our operations. Strong peso, weaker business? Oscar Sañez, CEO of the Business Processing Association of the Philippines, says that the strong peso, while a cause for concern for all BPOs regardless of size, is tighter among the small firms since these do not have as much access to the financial markets as their bigger counterparts. He describes the small call centers as good participants in the BPO industry, but infers that they would have to escalate their operations in about two years if they want to remain competitive. You really do need scale if you want to compete and diversify clients, Sañez says. A call center cannot live on just one contract alone. He estimates that a call center must have at least 500 seats to be able to recover cost of training and infrastructure. Still, there is value in starting out small just so investors could immediately ride on the growth in the sector. The challenge lies in moving on to the next level. Sañez says that what the industry is now seeing is consolidation among the smaller call centers. Some are bought out by the bigger call centers while others are snapped up by foreign investors who are exploring opportunities in the Philippines. This consolidation is good as it would make the industry more efficient and further bolster the country s position as an ideal destination for companies seeking to outsource operations. Investors continue to scout for good prospects in the Philippines because the outsourcing industry remains on a dizzying growth path. BPA/P data show that the Philippine BPO industry grew by 49 percent last year in terms of export receipts, the third straight year that the industry grew by over 40 percent. In terms of seats, the number has growth by over 43 percent over the past three years and there are no signs of slowing down despite problems that include the dwindling pool of skilled labor and the strengthening peso. What the foreign companies are finally realizing, Sañez says, is that Filipinos are worth their investment because of the quality of the work. And that quality is apparent not just in the big call centers but in the small ones as well. z Hiring Rate in Contact Centers Expected To Rise Training of near-hires to play a major role in upward trend The contact center industry is seeing a rise in the hiring rate of agents, thanks to free skills-focused training courses made available to near-hires through the government s Training for Work Scholarship Program, says Rita Trillo-Ugarte, president of ExcelAsia, a leading recruitment and training services provider for the BPO industry. Near-hires are candidates who have passed initial screening by potential employers but still need to develop certain skills to qualify for employment. They don t make the cut when they apply directly in call centers, says Trillo-Ugarte. But because the competition for talent is tough in the contact center industry, our clients don t want to let them go, so they are sent to us to train and apply again after completing our program. Access to this training is made possible by the Technical Education and Skills Development Authority (TESDA), which facilitates the Training for Work Scholarship Program of President Gloria Macapagal-Arroyo, Trillo- Ugarte says. Launched in May 2006, the program develops the competencies of Filipino jobseekers and empowers them to pursue promising careers in the BPO and other industries requiring highly critical skills. TESDA subsidizes the training costs of applicants by distributing training vouchers to partner institutions like ExcelAsia. To maintain partner status, TESDA requires institutions to maintain a 40 percent hiring rate, which means 40 percent of their trainees must successfully land jobs in the BPO industry after training. Approximately 37,000 trainees have completed TESDA-facilitated near-hire training programs. ExcelAsia has trained over 4,000 near-hires, or 11 percent of the total. Trillo-Ugarte attributes this success to an effective and intensive training program design, and to ExcelAsia trainers who are passionate about making a difference in their students lives. Doubling the target This year, TESDA expects to facilitate the training of 70,000 near-hires. To support that objective, ExcelAsia intends to increase the number of nearhires it trains on a monthly basis in line with the company s plans for future sites in Bacolod, Baguio and the South. ExcelAsia is targeting to train at least 1,000 students every month, double its monthly figure last year. The ExcelAsia training program lasts from one to three weeks, depending on trainees skill level and progress. The program consists of two major study areas: English and Communication Skills Training (ECST) and Customer Service Training (CST). The ECST is designed to address actual English communication and comprehension challenges faced by Filipinos, and is delivered via a learnercentered approach that is responsive to the pace and style of the trainees. CST, meanwhile, simulates on-the-job training scenarios in which students use headsets and specially equipped computers, and refer to call center program scripts. The CST training design also includes role-playing activities that demonstrate how to handle difficult situations such as soothing the feelings of angry customers. ExcelAsia has consistently delivered a hiring rate of 70 to 80 percent, which is almost twice the required hit rate and the average 49 percent hit rate recorded by TESDA. ExcelAsia provides industry-leading human resources solutions to more than 30 multinational companies in the Philippines. The firm is staffed by training and recruitment experts who provide end-to-end Human Resource solutions: sourcing and recruitment, executive search and business consultancy, and employee training and development. z

11 14 Executive Profile ICT S Man of the Hour The mild-mannered outsourcing czar is bent on making ICT more accessible to the people By Rory Visco Photos by Sany Chua At first glance, he seems a complex combination of sophistication, manly elegance, and soft-spokenness. But there is no mistaking that when it comes to pushing the Philippines forward to become a tech-savvy nation, Secretary Ray Anthony Roxas-Chua III, the country s head of the Commission on Information and Communications Technology (CICT), is all aggression. I bring a passion for technology. It has become a mission of mine to make people aware of technology and its benefits to their daily lives. I d like for technology and devices to become affordable, including connectivity, a beaming Roxas-Chua says in an interview with inside his modest office at the sprawling National Computer Center complex in Quezon City. One could say he comes fully equipped to fulfill his mission. After all, Roxas-Chua studied at the University of Pennsylvania in the United States, graduating magna cum laude with an Economics degree at the Wharton School and a Computer Science degree at the School of Engineering and Applied Science. In the United States, he was involved with top brokerage firm Salomon Smith Barney Holdings, Inc., later acquired by Citigroup, Inc. It was under Citigroup that he rose to Vice-President of the Technology Investment Banking Unit, where he focused on the areas of equity and debt underwriting, mergers and acquisitions advisory, and bank loan syndication for technology firms in the communications, electronic manufacturing services, and semiconductor sectors. Upon his return to the Philippines, Roxas- The very private individual who saw and grabbed the chance to make a positive impact on the country Chua readily took over the reins of the family s many businesses (glass manufacturing and property development and management). But a simple call last year asking him to serve in government changed his career path. Called to serve At that time, I thought the offer only involved consultancy work, he recalls. Politics and government do not really interest me. It was far from my priorities at that time. But still, I asked my family and sought suggestions and they told me to think about it. What won him over, he says, was the overpowering thought that this (government service) is a once-in-a-lifetime opportunity. I ll see if I can make an impact. It took the then 32-year-old businessman only one hour of soul-searching to accept the offer in October It lay on his broad shoulders the immense responsibility of giving the Philippines a strong global identity and imprint in the field of information technology. At the CICT, he quickly learned how the government bureaucracy worked. They (processes) are a bit tedious compared to the private sector but it s understandable, Roxas- Chua says. But the numerous public functions that he needs to attend posed a personal challenge. I m a very private person, he explains, but I ve learned to adjust to the demands, including the schedule. Almost a year after his appointment, Secretary Roxas-Chua is enthused at the growth of the Philippine BPO industry and how it has become an IT-BPO global destination. He notes the cooperation among the various groups like the Business Processing Association of the Philippines (BPA/P), the Technical Education and Skills Development Authority (TESDA) and its PGMA-Training for Work Scholarship Program (PGMA- TWSP), and even IBM Philippines Service Science, Management, and Engineering program, which helps sustain the country s large base of English-speaking talent for global competitiveness. Yet he cautions, We should not rest on our laurels. We have to start working even harder to keep that status. Roxas-Chua says that for instance, there is a need to diversify in terms of market penetration by looking at other areas like Europe and other English-speaking countries aside from the United States. More importantly, he says, the country should move up the next level in the IT-BPO chain, particularly in knowledge process outsourcing (KPO) services like finance and accounting, back-office processes, animation, gaming, and software development. We need to do more KPO to deliver added-value to our services, he stresses. Technology is the key For his part, the Secretary promises that his department will be more active in promoting ICT not only in the country but abroad: We ll be more active in trade missions abroad, particularly with our partners like BPA/P and the Department of Trade and Industry. ICT is much underrated here so we re really focused on its growth. We see ICT as a key tool for uplifting the status of the underprivileged people in our society. The biggest challenge he sees for the industry is in talent sustainability. Demand is seen to exceed manpower supply so we need to develop more talent in order to support demand growth, says Roxas-Chua. Among his biggest objectives is the passing of the DICT bill and other pieces of important legislation that involve data privacy and cybercrime. By becoming a full-fledged department, his office will have a more direct relationship with telecommunications firms when it comes to the improvement of communications infrastructure; this in turn should help ramp up skill levels of highschool students in computer use. This year, the CICT, with the help of the private sector, rolled out computer laboratories in 320 public high schools in the country, mostly in rural areas. Filipinos are known to quickly embrace technology and the challenge now is how to make it accessible, points out Roxas-Chua. He does have an idea of what he will do after serving his country. Sports, another passion, is one option. He can go back to the family business or start his very own. Whatever he decides to do, his family, especially his ten-month-old baby, will not want for attention something he feels he is lagging behind in at present. He admits, The speaking tours and missions made me very busy. It was tough balancing work and family. But I saw my mission, my work for the CICT, as my contribution to the country. I had to make sacrifices. It is a price he was and is willing to pay, at least for the time being. The momentum for growth is present, and there is no reason to slow down. Maintains Roxas-Chua: We ve seen already the IT-BPO industry s impact on the country. The industry really needs a champion, which means more focused support from the government. z

12 Next-wave Cities 15 Davao: The Next Big One Research COMPILED by Cora Llamas Interview by Maricris Orpiano Davao tops Jones Lang La Salle Leechiu s city benchmarking survey Outside of Metro Manila and Metro Cebu, Davao will become the biggest location for BPOs, says David Leechiu, Country Head of Jones Lang La Salle Leechiu. He points out, A lot of companies are looking at Davao now and are looking for ways to get there. Jones Lang La Salle Leechiu services the top BPOs in the Philippines, including 11 of the 12 largest, mainly through site acquisition, brokerage, and construction and property management. Leechiu, through the course of his work, has visited every major region in the 7,107-island archipelago, including Visayas and Mindanao in the south of the country. In the latter island is Davao, a city of 1.6 million people which has been drawing an increasing number of tourists and working expatriates alike in recent years. Leechiu himself has already visited the city five times in the early part of this year, and his colleagues are following suit. According to research by the Business Processing Association of the Philippines (BPA/P) and the USAID s Growth of Equity in Mindanao (GEM), Davao and the nearby city of Cagayan de Oro are well on the way to becoming BPO hubs. Top city There are now six major call centers in the city, namely CyberCity, Concentrix (Link2Support which employs several hundred agents), Sutherland, Call Box, Global Connect, and Western Wats, which recently invested Php60 million in its Davao operations. Another ten smaller call centers are also operating. From an initial 200 seats, the total seat capacity in Davao is now almost 3,000 with another 3,000 seats expected in the next 18 months. Commission on Information Communications Technology (CICT) Commissioner Monchito Ibrahim reveals Davao s latest achievement: The Asian Institute of Management has accorded it as the Philippine s Most Competitive City in the Philippines in its Philippine Competitiveness ranking Project It topped two of six key competitive drivers and scored the highest rate among highly urbanized cities. It scored highest in Cost of Doing Business and Infrastructure drivers while placing No. 4 in Dynamism of Local Economy. It also placed 7th in Quality of Life and clinched the 3rd spot in Responsiveness of Local Government. In Human Resources & Training, Davao also placed 7th. He adds, Overall in the metropolitan cities category, Davao City grabbed the top spot scoring 7.05, followed by Quezon City (6.61); Makati City (6.58); Manila (6.43); Marikina City (6.37); Lapu-lapu City (6.30); Paranaque City (6.30); Muntinlupa City (6.29); Cebu City (6.27); and Pasay City (6.24). One factor that attracts BPOs is the high quality of the Davao workforce, which is estimated to be twice that of Cebu, seven times that of Angeles/Clark, and six times that of Baguio, according to the XMG study cited by the BPA/P-GEM research. This does not yet include the potential workforce supply from the nearby cities and provinces. Leechiu also says that the emergence of BPOs has led to the repatriation of Davao natives who had migrated to Cebu and Manila. He says, Since companies opened in Davao, employees have gone back home now that jobs are available there. While the Davao BPO employees possess the Filipino trademark patience, flexibility and English-fluency skills, they are said to make for far better salesmen than their Manila counterparts. According to the BPA/P-GEM report, the bumper crop of skilled graduates in the David Leechiu area can be traced to Mindanao s tertiarylevel academic institutions that are at par with the rest of the country and concentrated in urban centers that are likely to become BPO locations. Zamboanga City, the sixth most populous city (approx.750,000) in the Philippines, has over 60 universities and colleges. The cities of Iligan and Marawi, just half an hour apart, have a combined student population of 25,000 in their Mindanao State University (MSU) campuses alone. Schools are now tailoring the curriculum to integrate English into the entire academic program, which develops the students facility with the language, says Joji Bian, President of the Philippine Call Center Alliance and owner of an academy which conducts call center training across Mindanao, in partnership with private schools and government agencies. LGU and academic support At Iligan s MSU campus, one of the country s top technical schools, the Iligan Institute of Technology (IIT), is even collaborating with a Manila-based BPO firm to provide its faculty members with cuttingedge software development training. Commissioner Ibrahim notes, More call center finishing and language training schools have opened significantly increasing the pool of qualified work force. ICT Davao Inc. and the Davao City Chamber of Commerce and Industry have actively engaged the academe to develop the talent pool necessary to support the BPO industry through different fora, seminars and conferences aimed to generate interest and support in the BPO sector. Everyone agrees that support of the local government is crucial to the growth of the BPO industry in Davao. Ibrahim enumerates, Improvement projects in basic services like drainage system, waste management, land zoning, human settlements, roads etc. have improved Davaoeños quality of life. The local government also instituted an efficient tax collection system. Public-private sector partnership characterizes most of its successful projects that have improved local tourism and its economy. The city s landscape is transformed into a bustling metropolis with amenities like restaurants, cafes, shopping centers scattered throughout the city, he says. With the influx of more businesses in the city, Davao is currently experiencing a surge in economic growth. Ibrahim continues, The major telcos have invested a substantial amount of money to provide facilities for BPOs. Also two Philippine Economic Zone Authorityaccredited IT parks have been established namely Damosa and NCCC to provide locators the necessary incentivized locations with another two to three PEZA zones in the pipeline. The CICT Commissioner also cites Davao s Digital Fiber Optic Network as one of its come-ons for business, along with the Francisco Bangoy International airport which can accommodate two million passengers a year and has direct flights to Hong Kong, Singapore, Manado and Palau, as well as daily flights to Manila, Cebu and Iloilo. He adds, Accessibility and utilities are not a problem given the good road infrastructure of Davao City. The presence of the 911 emergency response system makes it the safest place to locate in the Philippines. Leechiu mentions the low crime rate (.8 out of 10,000 people monthly) and the Davao city police which has been consistently chosen the Best Police Office in the country. He gives this advice to address security, the one concern of foreign investors: The BPOs can appoint a local insurer to cover the risk and take on the perception of security issues. Ibrahim concedes that foreigners usually lump Davao with conflict-afflicted areas elsewhere in Mindanao. His recommended The ICT Metrolifestyle Complex solution: Promote the city as itself. The Davao Chamber has submitted to the city government a resolution urging the city government to position the city as a growing cosmopolitan, attractive and peaceful investment destination. Another resolution passed by the Chamber that hopes to boost ICT in the city is the development and implementation of an ICT master plan. Bian has a happier experience with Filipino-owned BPO firms which appear to have discounted security perceptions. This makes her confident enough to say: I tell other firms less familiar with the region that they should just come over and judge for themselves. They can incubate accounts with a limited number of seats and see how well things work out. And that may be the best advice of all. z

13 16 JobsDB Phils Provides Total Recruitment Solutions for BPOs Company News J o b s D B P h i l i p p i n e s, I n c. ( the Philippines leading job portal in the Asia-Pacific, has established itself as the total recruitment solutions provider for the entire spectrum of industries, including business process outsourcing companies (BPOs). Constant innovation addressing the joint market composed of employers and candidates alike is its main driver boosting the number of applicants as a response to the growing recruitment needs of the BPOs. JobsDB Phils., Inc. currently provides qualified quality candidates to 100 BPOs in the country, including multi-nationals and industry leaders, using a variety of services ranging from its job posting board, placement and staffing, executive search, business conferences, and job fairs. Established in 1999, its website, offers applicants at least 4,000 jobs a day while enabling companies and recruiters, which number more than 10,000 members, to access and screen more than 1 million resumes in its database. JobsDB.com is the undisputed leader among career portals and job sites in the region with offices established in Thailand, Singapore, Australia, Malaysia, Korea, Taiwan, China, India, Indonesia, and Australia. The mother company, which is based in Hong Kong, pioneered the job board and database recruitment in Asia in Each of our product and service provides a different but effective approach to a BPO who may have different needs as well, explains Jayjay Viray, JobsDB Phils. general manager. Recruitment solutions providers must think out-of-thebox these days. One BPO may not just require huge numbers of call center agents who regularly surf the internet, but they may also be looking for top executives who prefer the more subtle, discreet approach. You really have to meet your customers employer and jobseeker alike where they are. BPOs looking for quick responses while maintaining the ability to screen their candidates avail of the job board, com.ph. Jobseekers can easily access their job vacancies listing detailed requirements and apply online, with resumes immediately sent to the recruiter s . Meanwhile, recruiters who prefer a wider choice can do a specific search of certain qualifications and candidate-types in JobsDB s 1-M-resumestrong database. JobsDB s placement service, through their recruitment consultants, offers a more Vice-President Noli de Castro at JobsDB s CEF Touring him around the job fair are JobsDB Phils. GM Jayjay Viray (2nd from left) and Samuel Sung, JobsDB.com s Chairman (3rd from left). direct hands-on kind of sourcing. After searching for candidates, these consultants conduct interviews, give exams that weigh communications and computer skills, perform background checks, and then provide the BPO client a shortlist with their necessary recommendations. This placement service is designed to screen and recruit candidates from all levels, from dozens of new graduates eligible for call center work to more experienced managers who have risen up the BPO ranks. To augment its online component, JobsDB regularly holds career events such as job fairs and business conferences. This year alone, the JobsDB Business Forum held two fora that discussed the latest trends in talent acquisition and retention for 200 executives and decision-makers, the first in Makati, the second in Cebu. Respected BPO practitioners such as Eric Concepcion, then HR Director of etelecare, and Jamea Garcia, the Business Processing Association s Executive Director for Talent Development, were among the distinguished speakers. JobsDB s job fairs average four a month and are held in partnership with colleges and universities, private corporations, industry associations, and local government units. Last June, more than 15,000 candidates and 100 companies, including BPOs, participated in JobsDB s Career and Entrepreneurship Fair 2008 at the World Trade Center which was highlighted by the visit of the Honorable Vice-President Noli de Castro as the Special Guest of Honor. z Gurango Appoints New Country Manager for Philippine VAR Business Operations Gurango Phils. Country Manager Manny Tanseco Gurango Software Corporation announced the appointment of Manny Tanseco as Country Manager for its Value Added Reseller (VAR) business in the Philippines. Prior to his appointment, Tanseco served as Gurango Software s Director for Services. Tanseco will work with other Gurango Software country managers to promote and enhance Gurango Software s VAR business operations worldwide. The Philippine-based global software company has offices in Australia, Singapore, and South Africa. The company delivers Microsoft VAR services on the Microsoft Dynamics platform in these and other global markets along with its own portfolio of software solutions. With Manny assuming the role of Country Manager for the Philippine VAR business, we expect to see demand for our services to remain robust, said Fermin Taruc, Chief Operating Officer of Gurango Software. Manny has played an instrumental role in the growth of our business in the Philippines. It was due to his active involvement in client management and project leadership that Microsoft accepted us into its elite Microsoft Dynamics President s Club. Less than five percent of all Microsoft VARs worldwide are admitted to the President s Club. To be admitted, a VAR must meet ambitious sales and operational excellence metrics. Gurango Software has been a member since In his previous capacity as Director for Services, Tanseco spearheaded a fullservice support system for the deployment of software solutions. Tanseco also led the development of individual and group metrics to monitor progress and overall performance of his team of project managers. The new Country Manager for the Philippine VAR business said Gurango Software will not only focus on expanding its Microsoft Dynamics client base. As a VAR in the Philippines, we will also be proactively seeking venues for generating new promotional leads to grow our other IP products such as SmartHR, DynamicPay, and Forum. Tanseco said. Gurango Software Corporation is a multinational software company that develops and distributes products for the Microsoft Dynamics ecosystem. Gurango operates its global product development and customer service back-office in the Philippines, with local sales and support provided by frontoffice subsidiaries in Asia, Australia, Africa, the Middle East, Western Europe, and North America. z Thomson Completes Acquisition of Reuters The Thomson Corporation announced last April in New York that it had completed its acquisition of Reuters Group PLC, forming Thomson Reuters (NYSE: TRI; TSX: TRI; LSE: TRIL: NASDAQ: TRIN), the world s leading source of intelligent information for businesses and professionals in the financial, legal, tax & accounting, scientific, healthcare, and media markets. Thomson Reuters has more than 50,000 employees with operations in 93 countries on six continents and 2007 pro forma revenues of approximately US$12.4 billion. At the same time, Thomson Reuters shares also began trading on exchanges in Toronto, New York and London and were made eligible for inclusion in S&P/TSX and FTSE 100 UK indices. Thomson Reuters Corporation s common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol TRI. Thomson Reuters PLC ordinary shares are listed on the London Stock Exchange under the symbol TRIL and its ADSs are listed on Nasdaq under the symbol TRIN. Tom Glocer, chief executive officer of Thomson Reuters, said, This is a very exciting day for our shareholders, customers and employees. Thomson Reuters will deliver the intelligent information needed to give businesses and professionals the knowledge to act. We call our information intelligent because it is not only insightful, highly relevant, and timely, but it is also made available in formats which applications can consume and to which they can add further value. We are witnessing the maturation of the information economy and content from Thomson Reuters will be its currency. Thomson Reuters also announced that based on current fundamentals it may repurchase up to US$500 million of its shares over the course of the year. Our plans to buy back Thomson Reuters shares underscores our financial strength and focus on shareholder value, said Glocer. We will manage Thomson Reuters capital structure and set our cash distribution policy so as to maintain a strong yet efficient balance sheet. In March, Thomson entered into a pre-defined irrevocable agreement with its broker to allow for the repurchase of Thomson Reuters PLC shares through May 1. The agreement allows Thomson Reuters to be active in the market from soon after closing of the acquisition and during what otherwise would be an internal closed period for trading. All share repurchases will be made in accordance with applicable securities laws, rules, and regulations. Shares repurchased will be cancelled by Thomson Reuters PLC. On May 15, 2007, Thomson agreed to acquire Reuters for pence in cash and 0.16 Thomson Reuters PLC ordinary shares for each Reuters ordinary share. On February 19, 2008, Thomson and Reuters received regulatory approvals from the European Commission (EC), US Department of Justice (DOJ) and Canadian Competition Bureau (CCB). The shareholders of both companies overwhelmingly approved the transaction on March 26, 2008, leading to subsequent court approvals in Ontario and the United Kingdom. z

14 Company News 17 Philippines to Emerge as Major SaaS Hub By 2010, over 30 percent of global software revenue will be driven by SaaS (software as a service) enterprise applications, says Winston Damarillo, Executive Chairman of Morph Labs, Inc., and the Philippines will emerge as a major SaaS innovation hub for the industry. Morph Lab aims to have many of those developers use their tools and services for rapid, cost-effect development of SaaS applications. Morph Labs is a Philippine-based SaaS product and service developer and a leading enabler of SaaS web application development by third-party independent software vendors (ISVs). Its Morph AppSpace service, the first Platform as a Service (PaaS) for Ruby on Rails (which is a popular open source programming framework) allows developers to quickly deploy applications into an enterprise quality on-demand environment. A recent Gartner Research report supports Damarillo s projection. It says that one-third of spending on business application software will be through subscriptions by 2010, up from just five percent in Gartner also projects that 84 percent of small and mid-size companies and 69 percent of large companies are willing to consider, are currently reviewing, or are already using SaaS applications. Damarillo believes the Philippines will become an important supplier of SaaS applications globally, and his company is providing products and services to help ISVs develop their own SaaS applications. Morph Labs enables ISVs and entrepreneurs to enter the global SaaS marketplace and compete without making huge investments in technology capabilities, says David Abramowski, Chief Executive of Morph Labs. And with the Internet as the distribution channel, there is plenty of opportunity for grassroots marketing that s only provided in the Web 2.0 world. Our tools and Internet distribution present great opportunity for Philippine start-ups, he continues. Given the Philippines capabilities and global reputation for software development, we are confident that this country will be among the major hubs of the global SaaS industry. Damarillo says that cost benefits are the most obvious advantage of SaaS applications over traditional software, but this enduser advantage puts tremendous pressure on SaaS developers. The challenge for a technology innovator is overcoming the time and cost to establish a reliable technology platform to deploy, deliver and manage new business applications, he explains. By reducing the cost of infrastructure and making it more affordable for ISVs, Morph Labs is enabling an increase in global supply of SaaS applications. And that increase in supply means more options for clients and end users, which generates increased demand as SaaS applications become mainstream. Morph Labs provides a suite of software applications called Morph AppSuite that can be used by ISVs to build applications, or directly by end users. SaaS applications developed or under development at Morph Labs include human resources management, expense management, and customer relationship management solutions. Since launching services in January this year, Morph Labs has signed up nearly 300 Morph AppSpace subscribers. Morph Lads is the leading enabler of SaaS that leverages virtual infrastructure and open source technologies to simplify the deployment, delivery, and management of web-based applications. It is a global company with headquarters in Cebu City, with additional in-country operations in Manila along with Los Angeles, California and Austin, Texas in the U.S.A. z Integreon Again Named to Annual List of Top 50 Outsourcers Worldwide with Improved Ranking For the third consecutive year, Integreon Managed Solutions, Inc., the global leader in integrated Knowledge Process Outsourcing (KPO), was named the top-ranked global KPO provider by the 2008 Black Book of Outsourcing, Brown- Wilson Group s prestigious annual survey of the global outsourcing industry. The firm earned this position through numberone rankings in the sub-categories of Business Research and Intelligence, Legal Research, Litigation Document Review, and Financial, Regulatory, Insurance, Legal and Compliance Document Services. Its latest recognition was announced last June in Los Angeles. Integreon also received the third-highest ranking among Legal Process Outsourcing (LPO) providers overall and led all vendors in the sub-category of Litigation Document Review. In addition, it had a strong showing among Document Process Outsourcing (DPO) providers overall, taking the lead ranking for Financial, Regulatory, Insurance, Legal and Compliance Document services. Separately, and for the second consecutive year, Integreon was named among the 50 Best Managed Outsourcing Vendors, improving its ranking from 49th last year to 39th this year, which places the company in the top one percent of more than 4,000 global outsourcing suppliers. Black Book s State of the Outsourcing Industry 2008 Report indicates that buyers now consider Client-Centric Culture (92 percent), Cultural Alignment Between Buyer and Provider (86 percent), and Balance Onshore/ Offshore Operations (69 percent) as their Top 3 decision criteria beyond pricing. Commenting on these findings, Ron Friedmann, SVP Marketing of Integreon says, Customers are increasingly sophisticated and demand their Middle Office operations support their growth, profitability, and client epldt and Allied Bank Seal Service Agreement epldt, the country s premiere ICT company, recently sealed its service contract with Allied Bank, providing the financial institution with a contact center solution for Allied Bank s Ally Live call center. A pre-integrated suite of contact center applications, epldt s Unified Contact Center Plus (UCCP) allows organizations like Allied satisfaction objectives. Integreon President and CEO Liam Brown also comments, Integreon s strong rankings underscore our expertise across the range of research, legal and document Bank to enjoy rapid implementation, streamlined operations, and reduced cost of integration, management and maintenance of their call center. With the signing of the service contract, epldt is primed to provide expert support for Allied Bank and its clients. Photo shows (from left) Allied Bank executives Fol Rana, Jr., First Vice categories of KPO. We were also very pleased to have ranked number one in Delivery Excellence, Breadth of Offering and Process Improvement, which our customers consider critical to successful KPO. z President; Peter Yap, Executive Vice President; Ray C. Espinosa, epldt President and CEO; Jessica Powell, epldt Vice-President for Sales and Marketing; and Yohlie Jarlego, epldt Assistant Vice-President for IP Contact Center Solutions, during the service contract signing held at the epldt head office. z

15 18 Company News BT and the X PRIZE Foundation Team Up to Inspire World-Changing Innovations The X PRIZE Foundation, an educational non-profit organization that designs and administers competitions with prizes of US$10 million or more, has joined forces with global communications services provider BT Global Services to combat some of the world s biggest challenges, such as disease, poverty, and energy efficiency. BT Global Services, which employs more than 32,000 people worldwide, is providing US$7 million in operating funds to the Foundation over the course of a three-year partnership. These funds will allow the X PRIZE Foundation to focus on developing new prizes to solve some of the greatest challenges of our time. These prizes could have a combined purse total of over US$300 million. The partnership represents the largest sponsorship BT Global Services has ever provided an organization in North America, and is one of the largest sponsorships BT has engaged in worldwide. BT s investment in the X PRIZE model of philanthropy will help accelerate innovation to benefit humanity. With the recent addition of Michael Boustridge, President of BT Americas, to the X PRIZE Foundation Board of Trustees, BT will have a voice in shaping future X PRIZEs. With customers in more than 170 countries across the globe, BT s global reach will strengthen the X PRIZE Foundation s position outside the United States, helping the Foundation bring together the top minds in a variety of industries worldwide. At the same time, BT s expertise in communications, a cornerstone of the collaboration needed to run and win X PRIZEs, will be a valuable resource for the Foundation and prize competitors to mobilize ecosystems of innovators and scientists around the world toward collaboration. The X PRIZE Foundation currently has three active competitions: the US$10 million Archon X PRIZE for Genomics that aims to usher in a new era of personalized, preventive medicine; the US$10 million Progressive Insurance Automotive X PRIZE to create a new generation of viable, super fuel-efficient vehicles; and the US$30 million Google Lunar X PRIZE to send privately funded rovers to the Moon. With a number of prizes now in active development, the X PRIZE Foundation will launch 12 or more new prizes over the next five years. BT is a worldwide leader in technological innovation and collaboration, says Dr. Peter H. Diamandis, Chairman and CEO of the X PRIZE Foundation. Their expertise and global reach will give the X PRIZE Foundation an even greater impact in the areas that are in desperate need of a breakthrough. Together, we can achieve what was once considered unachievable. BT Global Services CEO Francois Barrault also remarks, This partnership is the latest step in BT s long legacy of innovation. For more than 100 years, BT has been helping customers to use communications and collaboration to make the world a smaller, and better, place. We believe the X PRIZE Foundation is a valuable demonstration of how collaboration and global networks, both human and technological, can create positive change for business and society. The X PRIZE Foundation is an educational nonprofit prize institute whose mission is to create radical breakthroughs for the benefit of humanity. In 2004, the Foundation captured the world s attention when the Burt Rutan-led team, backed by Microsoft co-founder Paul Allen, built and flew the world s first private spaceship to win the US$10 million Ansari X PRIZE for suborbital spaceflight BT is one of the world s leading providers of communications solutions and services operating in 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to our customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services. z Headstrong ranks 33rd in The Global Outsourcing 100 Headstrong, a global consultancy and IT solutions firm, announced last May that the International Association of Outsourcing Professionals (IAOP) has ranked it 33rd in the annual Global Outsourcing 100 list in 2008 (ranked 50th in 2007). Headstrong is cited as one of the Best 10 Companies by Industry Focus: Services and Best 20 Companies by Industry Focus: Technology. The Global Outsourcing 100 list is considered one of the most comprehensive vendor ranking within the outsourcing services industry, and lists the top technology vendors and service providers in this space. This is the third consecutive year that the company has received this honor. The Global Outsourcing 100 is devoted to featuring the best of today s leading outsourcing service providers and tomorrow s rising stars. Along with its publication by IAOP, the list appears each year in FORTUNE Magazine in the special advertising section produced by IAOP. Companies must demonstrate excellence in categories such as size and growth, customer experience, depth and breadth of competencies, and management capabilities. Because of the rigorous application and judging process employed, The Global Outsourcing 100 defines the standard for excellence in outsourcing service delivery. This recognition validates Headstrong s commitment to growth and its vision of providing top notch end-to-end consulting and outsourcing services to financial services sector focused on Capital Markets and Securities industry. Improving our ranking by a big 17 places on this year s list affirms that Headstrong is on the right path towards achieving leadership in our chosen markets. Our distributed consulting model of domain-led consulting is key to providing true value to our customers than mere pure labor arbitrage. Our customers appreciate our value proposition, said Nicki Mehra, Managing Director for Corporate Strategy and Marketing at Headstrong. Headstrong boasts a 26-year plus track record of providing clients with value-based solutions across consulting, application outsourcing, product development and business process outsourcing domains. Headstrong has recently rolled out a three-year internal plan to scale to US$500 million by 2010, calling it Headstrong 2.0. It is a global consulting and IT services company that applies its expertise in business processes and technology across key verticals in the Financial Services and Capital Markets Industry. z Valassis Signs Three-Year Contract with Outsourced Graphic Services Provider Affinity Express Robinsons Cybergate in Davao City Completed by 2009 Affinity Express Inc. has announced that Valassis has signed a new three-year contract for advertising production services for the company s RedPlum Wrap. The new deal will see Affinity Express providing premedia ad production and prepress services to Valassis. Affinity Express is a top business process outsourcing company that is 100 percent dedicated to graphic and design services for print and online media. Headquartered in Chicago, Illinois, it has over 800 employees and maintains production centers in Pune, India and Manila, Philippines. It supports more than 6,000 clients in the direct mail, newspaper, publishing, commercial printing and promotional products industries, as well as major U.S. corporations. Valassis, the leading marketing services company in the United States, offers unparalleled reach and scale to more than 15,000 advertisers in Livonia, Michigan, with approximately 7,000 associates in 28 states and nine countries. Valassis companies include Valassis Direct Mail, Inc., Valassis Canada, Promotion Watch, Valassis Relationship Marketing Systems, LLC and NCH Marketing Services, Inc. We helped Valassis pioneer the outsourcing of demanding, high-volume design services in the direct mail industry and are delighted the company has decided to extend our relationship, says Affinity Express Senior Vice President of Operations for Advertising Services Michael Santamaria. The RedPlum Wrap is a strategic component of the Valassis portfolio and we see this as validation for the quality, reliable turn times, creativity, and cost savings our team has been delivering for the past two years. It s also a vote of confidence from Valassis that we ll continue to deliver these significant benefits well into the future. Valassis Senior Vice President, Client Services, Shared Mail Products Ron Goolsby says, Outsourcing a service as critical as ad production requires collaboration, reliability, and a strong commitment from both parties. We have been pleased with our affiliation with Affinity Express and partnered for a portion of our ad production services to do what is in the best interest of our clients. Affinity Express, a Delawareincorporated firm, is 100 percent owned by LiveIt Global Solutions, the holding company for Ayala Corporation s investments in the Business Process Outsourcing (BPO) sector. Ayala Corporation and its listed subsidiaries have a combined market capitalization of approximately US$20 billion. z Robinsons Land Corporation (RLC) Commercial Centers Division is currently building Robinsons Cybergate Davao, which will offer both retail and office spaces. Located along J. P. Laurel Avenue, a major thoroughfare in Bajada, Davao City, Robinsons Cybergate Davao is expected to be completed by first quarter of RLC is developing a two-level structure with a total gross floor area (GFA) of over 13,500 square meters. The floor areas have been designed to accommodate retail establishments like service outlets, quick-serve restaurants and coffee shops, Internet cafes, gadgets & accessories stores, and office spaces. A perspective of Robinson Place Davao Robinsons Supermarket & Handyman-Do- It-Best will be located on Level 1 while office spaces will be situated at the second level. Publicly listed Robinsons Land Corporation is a major real estate player in the Philippines. RLC s growing portfolio covers various operations involving shopping centers, high-rise residential condominiums and town houses, housing & land with residential subdivisions (projects & properties) with, office buildings as well as hotels. To date, there are 23 shopping malls, 26 residential condominiums, six office buildings, 31 housing & land developments, and four hotels. z

16 Accenture Wins PEZA s Outstanding Employer and Outstanding Exporter Awards Company News 19 MTIAPI Opens More Doors for RP Medical Transcription Services at US Convention Accenture, a global management consulting, technology services and outsourcing company, was recently recognized as the 2008 Outstanding Employer of the Year (Large Enterprise Category) and the Outstanding Exporter of the Year (IT Services Category) at the recent Philippine Economic Zone Authority (PEZA) investors awards. PEZA bestowed the Outstanding Employer of the Year Award to Accenture for being one of the country s top job generators and for promoting employees welfare through a comprehensive program of employee professional and personal development. Beth Lui, Accenture Phils. Country Managing Director, accepts the award from Exec. Sec. Eduardo R. Ermita and PEZA Dir-Gen. Lilia B. de Lima. At the same time, the company earned the Outstanding Exporter recognition for its contribution to exports, based on total export value, growth and net trade balance, as well as for its good corporate citizenship programs. Accenture is a global management consulting, technology services, and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. z The Medical Transcription Industry Association of the Philippines, Inc. (MTIAPI) drummed up interest in the country s medical transcription services at the annual convention of the Medical Transcription Industry Association (MTIA) held in Long Beach, California last May. MTIAPI president Myla Rose Mundo- Reyes, who joined other industry delegates from India and the Caribbean in the convention s first-ever panel discussion on Building a Viable and Sustainable Relationship with Offshore MT Service Organizations, said the well-attended panel discussion tore down barriers to the Philippines emergence as the outsourcing and offshoring destination of choice and presented the country as having viable solutions for U.S. MT companies looking for virtual extension offices. Reyes, who is also the Managing Director of Total Transcription Solutions, Inc., explained that the panel discussion corrected some of the participants negative perceptions about offshoring and informed them where to go, whom to talk to, and what to consider if they want to explore outsourcing to other countries. I was actually glad that the participants concerns on quality, data privacy, public holidays, and government support in policy making were openly raised because I was given the opportunity to inform them that the Philippines is addressing exactly the same issues that really matter to our clients, she added. Another MTIAPI delegate and Marketing Manager of IQ West, Sammy Pe, said that as a result of the panel discussion, he was able to get a number of leads at the convention. While in the United States., the MTIAPI delegation met with the MTIA board of directors. The two associations agreed to forge a partnership to protect the interests of the industry and its players. Some of the highlighted areas of cooperation were policy enforcement on data privacy protection, intellectual property rights protection of their MT curricula, certification of MT workers and training facility accreditation, a company verification process, and some business matching activities for MTIA s U.S. Medical Transcription Service Organizations (MTSO) members looking for offshore partners. Colin Christie, CEO of MXSecure and MTIAPI Director, viewed the meeting as a great step toward future cooperation. MTIAPI Director and Transkripsyo Chief Executive Officer Michael Chua also commented, It was a very good mission. I believe the delegation presented the Philippine value proposition very well. We are looking forward to having more U.S. companies taking a second look at the Philippines for their outsourced transcription needs. Reyes added, The challenge now is for our local stakeholders the private sector and the government to ensure that the right components are in place when the investors begin pouring in. z