$6B BPO sector builds on early gains

For an industry that prides itself in following processes meticulously, the success of business process outsourcing (BPO) seems to have hinged on seemingly small measures that later turned out to be “game changers.”

One such policy shift that would later come to have massive positive implications on the industry was the government’s decision to allow individual buildings to be accredited by the Philippine Economic Zone Authority (Peza).

According to LiveIT CEO Fred Ayala, the government’s timely action to ease previously restrictive rules about incentives for investors was one factor that helped the BPO industry bloom.

Policy shift

“Before it [government] intervened, export processing zone rules provided incentives to investors only if they located in a specific industrial technopark,” he said.

“One of the key insights pushed by [the Department of Trade and Industry and the Board of Investments] was to suggest and push for changing those rules, so that the Peza framework could now allow building owners to designate and apply their buildings for Peza accreditation,” Ayala added.

The immediate result was the accreditation of the RCBC Plaza in Makati City as as the first Peza-certified building—a site that became a magnet for BPO firms despite the lingering effects back then of the 1997 East Asian financial crisis.

“If that had not taken place, a BPO coming here might have been told by the government, ‘you must locate in Mariveles,’” the Ayala executive said. “In such a situation, there is no doubt that the take off would have been much slower.”

“It’s like drilling for oil,” he said, crediting the BPO sector’s backers at the trade department for pushing for the rule change. “You have to go where the people are. Export processing zones are quite far from urban locations. So this change allowed BPOs to ‘drill for oil’ by looking for the best people where they were.”

After that, selling the Philippines to foreign firms as an outsourcing destination became a lot easier.

Another BPO industry pioneer, ICT Group president Karen Batungbacal recalled how critical it was for a concerted effort between the public and private sectors to jointly push the country as a product to potential investors.

“Back in 2000, I approached DTI to talk to [then] Secretary [Mar] Roxas and he quickly came on the bandwagon,” she said. “He understood that it was a ‘country sell.’”

Selling RP

Batungbacal said that in the BPO industry, foreign locators and their clients first had to be convinced about the viability of a particular country—its political, social and economic potentials—before even taking a look at individual firms offering their services to them.

This is where companies like Gartner—with its broad influence in the information technology industry—were critical to the country’s success.

“It was very important because companies would refer to consultancy firms or research firms if they wanted to locate offshore,” she said. “We needed to sell the country first.”

“Whenever I approach a potential client, the first hour or two would be about the country,” the ICT Group chief said. “Only after they are convinced about the country’s feasibility would I be able to talk about my company.”

With the public and private sectors focused on this goal, the BPO sector grew into a $6.1-billion-yearly industry with close to 400,000 employees today—and aiming for one million in just a few years.

“We are not resting on our laurels,” Business Process Association of the Philippines president Oscar Sañez said. “We are now focused on making sure that this industry is sustainable over the long run.”

Indeed the BPO sector is now widely credited as one of the industries that helped the country weather the worst global economic crisis since the Great Depression.

In the end, the sector’s success is all about having foresight, the cooperation of government agencies and the private sector, dogged determination and—according to former Board of Investments managing director Gregory Domingo—that crucial dinner between top officials of DTI and Gartner in 2001.

“That opened the doors of the world for us,” he said. “It changed everything.”

RP hosts 10th SCA conference

The Science Council of Asia (SCA) in its recently concluded 9th conference held at the Grand Copthorne Waterfront Hotel in Singapore voted a Filipino medical doctor as its next president.

Dr. Jaime C. Montoya, president of the National Research Council of the Philippines (DOST-NRCP) and concurrent executive director of the Philippine Council for Health R&D (DOST-PCHRD) was elected for the 2009-2010 term. He succeeded Prof. Hong Wanjin of the Singapore Agency for Science, Technology and Research (ASTAR) who assumed the position of the immediate Past-President in the SCA Management Board.

Other elected officers include Prof. B. Chadraa of the Mongolian Academy of Sciences and Prof. Yoichi Muraoka of the Science Council of Japan as secretary general and treasurer, respectively.

In his acceptance speech, Dr. Montoya expressed confidence in the Philippine's hosting capability which equals that of ASTAR's. He also led the SCA group in conduct of the 10th SCA Conference in Manila, Philippines held on July 25-28, 2010 at the SOFITEL Philippine Plaza.

The 10th SCA Conference focused its discussion around the theme, "Meeting the Health Challenges in the Asia Pacific Region: Responding through an Integrated and Multidisciplinary Approach in Science and Technology." This was the first time that the SCA Conference focused on multi-disciplinary health issues and concerns such as tuberculosis, avian flu, swine flu, dengue, SARS, and the Ebola-Reston virus. These were discussed in light of climate change, globalization and its social and economic impacts.

The Science Council of Asia was founded in 2000 with the Philippines as one of its founding members. It is an international scientific organization in the Asia Pacific Region that brings together scientists and scientific organizations from all academic fields. Their annual scientific discussion serves as a forum for information exchange, collaboration and cooperation, as well as integrating emerging advances in science and technology for the improvement of the quality of human life.

Eleven countries compose SCA, namely Thailand, Malaysia, Indonesia, Republic of Korea, Vietnam, India, Japan, China, Singapore, the Philippines and Mongolia.

Senate resumes probe of broadband deal

After a long lull, the Senate on Tuesday resumed its investigation into the anomalous $329-million national broadband network (NBN) with China’s ZTE.

Present at the hearing of the joint committees on accountability of public officers and investigations (blue ribbon), trade and commerce, and national defense were losing bidder Jose de Venecia III, former Budget Secretary Benjamin Diokno, and whistleblower Rodolfo “Jun” Lozada Jr.

Also invited to the hearing were Trade Secretary Peter Favila, Transportation Secretary Leandro Mendoza, Social Security System president Romulo Neri, Securities and Exchange Commissioner Manuel Huberto Gaite, Philippine National Railways chairman Michael Defensor, University of Philippines Prof. Felipe Medalla, and Ramon Sales, former chairman of the Commission on Information and Communications Technology.

In separate letters to Senator Richard Gordon, chairman of the blue ribbon committee, Gaite and Defensor said they could not attend the proceeding because of their previous out-of-town engagements.

Besides, Gaite said he has already testified lengthily on the issue.

Favila made the same statement in a separate letter to Gordon, “I don’t think my presence would be helpful and I’ve already testified and answered to the best of my knowledge.”

De Venecia and Lozada also admitted that they have no new information to offer in the hearing.

Speaking to reporters before the hearing, both De Venecia and Lozada asked for the immediate closure of the investigation.

“I don’t know why I’m still here,” De Venecia said, when asked about Gordon’s statement that he should also be charged in court for his participation in the anomalous deal.

“Naitaya ko na lahat dito. Hinihingi ko na lang na lumalabas ang katotohanan (I have given everything I know here. I only ask that the truth will come out),” Lozada said.

Big Blue to expand RP services hub

With several hundred employees – many with business management skills -- at its disposal, the Philippine office of technology firm IBM is being positioned to become a global hub for experienced services providers.

IBM Philippines recently started re-expanding their local Global Business Services (GBS) to complete a network of multisite solutions offices that can offer 24x7 assistance to global clients.

The Philippines would be one of the eight such GBS locations worldwide. The others are Argentina, Brazil, China, Egypt, India, Romania and Vietnam.

During a visit to the Philippines, IBM GBS Vice President for Global Delivery Richard Patterson said they are hiring skilled workers to serve as the local pool that can be tapped for specific projects in offshore locations.

Patterson said adeptness to English is one of the key factors why the Philippines was again chosen to become part of the GBS, aside from its geographical proximity to other countries where IBM has a presence.

He noted GBS offers its services to a variety of industries such as telecommunications, travel, industrial manufacturing, financial and retail.

After the economic downturn, Patterson sees a return to "normalcy" in global industries, particularly those with multiple locations that need to ensure full operational capabilities.

“They would need to have the right people working with them to optimize their business and build relationships,” Patterson said, adding that the improved global business climate would fuel IBM’s offshore services business.

How lifestyle shapes technology, vice versa

MOBILE PHONE manufacturers are constantly upgrading devices to enable people “to experience a wide variety of features that complement their personalities and lifestyles,” says Sandeep Khanna, Nokia Philippines marketing head.

“All handset brands, Nokia, in particular, are bringing technology that fuses seamlessly into people’s lives. If you get them to do more with their device, they will stay loyal to you.”

So how does Nokia make its hardware more attractive to consumers?

Khanna cites key trends:

Smartphones or mobiles with IT features are the next big thing. Wide access to multimedia information is available on hand, literally. “It’s adding more function to a small device. The N97 has 32 gigs of storage. My laptop has 37 gigs,” says Khanna.

According to the New York Times, “The great promise of a smartphone is that it can be just about anything you need it to be in a given moment.”

Traditional features are getting more sophisticated yet made accessible with lower price points. In the past, a 5-megapixel camera-phone would fetch P25,000. Today, the popular Nokia 6700 classic offers this feature at P16,570. The mobiles are slowly replacing the MP3 player. The 6700 can store 325 songs using the +eaac (high-efficiency advanced video coding) format.

But with its expandable memory of up to 8 gigabytes, it can store 3,000 songs. For the audiophile, the Nokia 5130 Xpressmusic stores 750 songs and is priced at P5,840.

Materials are getting more refined. The new phones are made of high-tech materials such as carbon fiber, titanium and burnished steel, which lend lightness, durability and elegance to the product.

With its constant evolution, Nokia is also blurring the lines between manufacturing handphones and providing mobile data services. Ovi.com, the Finnish word for “portal,” is going the way of Microsoft, Apple and Google.

“It is our door to the Internet. Through Ovi.com we will bring a range of services and solutions to the Philippines – e-mail, maps, games and music. It will consist of a fairly rounded repertoire of services that people need today,” says Khanna.

The local launch is still under wraps. However, you can check out www.ovi.com and even open a free e-mail account with 1 gigabyte of storage.

New products

The marketing executive adds that Nokia will present new products that will enable users to open an e-mail account on the phone and access their e-mail in just three clicks. The range will be available from the lower and mid-range phones, which cost between P2,500 and P15,000.

“It’s a very clear strategy for us to make e-mail accessible to the widest mass of users,” he says. These features and services will augur well in remote areas where people don’t own a computer or have access to an Internet café. (Users will pay for Internet charges).

As added feature, Nokia owners can personalize their phones with the company’s latest application outlet, the Ovi Store. Most of the apps are free of charge in the Philippine market, such as games and media entertainment.

Khanna points out the potential of Ovi Share. “You can upload photos and videos in an unlimited storage for free... More than just devices, we have to present services and solutions to people. That’s the way to encourage usage [of Nokia], the way to build brand equity and live by our mission of connecting people.”

Meanwhile, Nokia is strengthening ties to its market segment through the 6700 classic.

“To connect, you need to go beyond the traditional feature-benefit type of communication. This audience requires a sensorial connection. This is where marketing is important. This segment leads to a fuller, richer and more well-rounded life. We need to be a part of that life,” he adds.

Prestige events

Nokia recently tied up with a society magazine for the launch of its restaurant guide. An event highlight was a photo exhibit of foods by Alex Van Hagen, taken with the 6700c camera.

Nokia also collaborated with Inquirer Lifestyle and Look magazine for the Manila debut of Australian-based Filipino designer Leonardo Salinas.

On September 7, Nokia, the Philippine Daily Inquirer and Look will hold a style photo exhibit at Ayala Museum. In October, Nokia and Inquirer Lifestyle will hold an art exhibit.

“Lifestyle trends are changing and you need to have your ear to the ground to see what’s new. For example, no-name branding is what connects more with this market profile than the in-your-face branding. Understatement is a big statement by itself. Basically we live through the different facets of our customers’ lives. Fashion was the starting point.

“But it was also important to connect to other dimensions such as food and gourmet. The upcoming events are on beauty/style and art. We thought of presenting all of these in a well-rounded and cohesive way. Today, every brand likes to have a lifestyle dimension because people are realizing there is more to products than just features and benefits,” explains Khanna.

“In Nokia, we live through our brand values and personality. We are very sociable, curious and authentic. Those are our brand values. In the way we present ourselves, we stand out uniquely because we’ve always been a leader in the Philippines. The 6700 is sensorial and a piece of affordable luxury. Hence, the Lifestyle and Look event aims to present style as it’s never been done before. It’s all about the look and invoking the senses.”

Proposed nuclear body gets Congress nod

The proposed Philippine Nuclear Regulatory Commission (PNRC) is gathering steam as the congressional committees on government reorganization and science and technology approved House Bill 03254 for plenary debate.

The proposal aims to form the PNRC and consolidate all agencies involved in nuclear energy research and regulation.

Among those that would be absorbed if the bill becomes law are the Philippine Nuclear Research Institute (PNRI) - Nuclear regulations, Licensing and Safeguards Division (NRLSD), and the Radiation Regulation Division (RRD).

The PNRI is under the Department of Science and Technology (DOST) while the RRD is under the Department of Health's (DOH) Bureau of Health Devices and Technology.

The PNRC will also be led by one commissioner and two associate commissioners and will have five technical divisions and two non-technical divisions.

Like most government commission, the PNRC would be directly attached to the Office of the President.

Representative Joseph Emilio Abaya (1st District, Cavite), who chairs the committee on science and technology, explained that the PNRC would be tasked to regulate and control the use of nuclear energy and ionizing radiation sources.

Abaya, who co-authored HB 03254, added that the PNRC will also create guidelines for regulatory actions related to nuclear technology in the Philippines, in particular, public health concerns and environmental issues.

Abaya is also one of the proponents to re-commission the controversial Bataan Nuclear Power Plant, which has been at the center of numerous debates over its technical and commercial viability after being mothballed for 25 years.

SAP gathers clients for RP leg in world tour

OVER 300 customers, partners and prospective clients of German business software company SAP gathered recently at the Philippine stop of the SAP World Tour, one of 27 stops of the 70-leg tour in the Asia-Pacific region and in Japan.

SAP Philippines country manager Jenny Ligones said the world tour “is a global event, but at every stop, it addresses the unique needs of companies in that particular region. In today’s business environment, our customers need to see clearly, think clearly and act clearly to thrive. Gaining clarity and then acting upon it, both within their organization and across their wider network, ensures our customers become best-run businesses.”

SAP’s clientele in the Philippines cuts across all sizes, from food and beverage giant San Miguel Corp. to small and medium enterprises like Optical Works and food franchise business Rice in a Box. The solutions SAP offers its clients are, as Ligones said, “customized to their needs and are designed for transparency and real-time efficiency in their business processes.”

The SAP World Tour “takes place in over 100 cities across 50 countries in Europe, Asia, North America and Latin America, and it is seen as a premium business and technology event that has reached over 240,000 of SAP’s customers, partners and influencers over the last five years, providing businesses with information on how SAP solutions can help companies of all sizes successfully transform business challenge into opportunity,” Ligones said.

The tour has an interactive format focusing on the SAP’s new, strategic initiatives, highlighting the power of SAP Business Suite 7, focusing on analytics and business intelligence, surviving the current market conditions with the SAP SME portfolio and best-run now packages, SAP customer relationship 7 and CRM in SAP Business All-in-One and a specific industry focus for each market.

The interactive format included industry- and product-specific breakout sessions where SAP World Tour Manila participants learned how the SAP business software solution portfolio can help companies adapt more quickly to changing market needs, differentiate against tougher competition, execute growth strategies in an international environment and maximize results with existing resources, while continuing to concentrate on core business competencies and maintaining close customer relations.

Ligones said this year’s SAP World Tour “comes at an opportune time, as best-run businesses have an advantage in coping with the current economic situation. The Philippines is indeed fortunate to be a part of such an event.”

10 state colleges, universities to offer biotechnology courses

Sixteen state colleges and universities nationwide will soon include biotechnology in their existing curriculum in a bid to popularize the subject and eventually help the country benefit from the relatively new field.

The University of the Philippines’ National Institute of Molecular Biology and Biotechnology (NIMBB), in collaboration with the Department of Agriculture and the Commission on Higher Education, has developed the program instituting a General Education (GE) Biotechnology Course in the curriculum of selected state colleges and Universities (SCUs)

Dr. Cynthia Hedreyda, NIMBB director, said that while there is limitless information on biotechnology, there is not enough popular awareness of the subject.

Biotechnology is defined as “the use of living organisms, especially microorganisms, in industrial, agricultural, medical and other technological applications.”

She said biotechnology education in the country is disseminated primarily through workshops and symposia conducted by scientists, people from the academe, government agencies like the DA and the Department of Science and Technology.

“These attempts, are, however, not sufficient to make knowledge of benefits derived from products of the new technology, particularly the agricultural products of modern biotechnology, widespread,” she said.

Agriculture Secretary Arthur Yap said the introduction of the biotechnology course is “one of the many initiatives that we are undertaking to vigorously promote the safe and responsible use of biotechnology is its inclusion in the college curriculum, initially in 16 selected state colleges and universities.

He said, “Our aim is to equip Filipino teachers, students and other interested individuals with the basic knowledge, and enable them to make informed decisions on biotechnology products and latest breakthroughs and developments, and related issues on human health and the environment, and ethical concerns.”

“Further, through this initiative we hope to encourage more Filipino youth to pursue a career in the field of biotechnology, either as researchers and scientists or entrepreneurs,” he added.

The Cavite State University and University of Southern Mindanao have begun offering three units of the biotechnology course to their students.

Segfredo Serrano, DA undersecretary for policy and planning, said the integration of the biotechnology course in the college curriculum “will help transform biotechnology education into something we can benefit more from.”

Biotechnology courses cover a variety of topics from the history of traditional and modern biotechnology, the use of biotechnology for health, environment and industry, legal battles, and ethical issues.

Kepco to use ‘smart grid’ in RP

THE LOCAL SUBSIDIARY OF SOUTH Korea-based firm Korea Electric Power Corp. (Kepco) yesterday revealed it was eyeing to use the so-called “smart grid” technology in the Philippines, through its planned renewable energy projects.

Smart grid refers to the incorporation of information technology into an existing power network, making a two-way information exchange between suppliers and consumers possible.

With this setup, electricity from suppliers is delivered to consumers using digital technology to save on energy, reduce cost and increase reliability and transparency. Energy usage can also be monitored more efficiently through the smart grid.

“It can predict mechanical and technical problems even before they occur, thus preventing large-scale power outages. More importantly, it allows renewable energy sources to be integrated into the existing network, therefore contributing to greenhouse gas emissions reduction,” Kepco Philippines said in a statement.

According to Kepco Philippines, it targets to incorporate the smart grid technology into its planned wind and hydro power projects, backed by its parent firm’s know-how.

Its parent firm had been tapped at the G8 Summit’s Major Economies Forum (MEF) on Energy and Climate, to spearhead the research, development and commercialization of smart grid technology, which has been named as one of the seven technologies that may “help change the world.”

The sole provider of electricity in Korea, Kepco is set to pilot a smart grid project city in Jeju Island by 2011. The company targets to complete the consumer-side smart grid by 2020, and implement this in the whole South Korea by 2030.

The Korean firm is also expected to prepare a detailed map of its smart grid, and a plan on how to develop the technology, which will be submitted to the MEF in November this year.

Kepco Philippines plans to give the Philippine public a glimpse of how a smart grid works as it showcases the technology at the PowerTrends 2009 Exhibit on Sept. 9 to 11.

Locally, the Manila Electric Co., the country’s biggest power distributor, has already been planning to implement smart grid technology once the necessary infrastructure has been set in place.

In an earlier interview, Martin Lopez, vice president and chief information officer of Meralco, said the utility will pilot test its broadband over power lines (BPL) project within the year. The BPL project is part of the company’s bigger smart grid project.

“BPL is just a means, a subset of the whole project,” he earlier said.

He explained that the smart grid technology would allow utilities like Meralco to be able to remotely monitor all the facilities on the field and check transformers and transmission lines, with the use of power lines as means of communication.

Filipino CIOs learn from each other

As the global economic crisis slowly unravels, local chief information officers (CIOs) continue to look for strategies that will ensure business continuity and prepare them for the eventual upturn.

However, not all strategies could work and some CIOs still lack the maturity to implement strategies either because they are not familiar with effective industry practices or even with simple yet novel ideas.

“The best way to learn new techniques is to bring them together and share experiences so CIOs know what works and how these can be implemented in their organizations,” according to Accenture Philippines country managing director Beth Lui.

Speaking before a CIO workshop conducted by Accenture, Lui said CIOs are inclined to learn more from others’ experiences to enable their own companies to effectively maintain business continuity.

She said CIOs are able to exchange ideas and ask relevant questions pertaining to business operations, citing that as the economy turns, these companies would want to deliver faster and better services without breaking their budgets.

“The general consensus is that companies have smaller budgets, especially for information technology but they still expect to deliver their services better. They’ll learn if they find out how others did it,” Lui said.

Accenture has been conducting CIO workshops in other countries bringing together executives from different industries specifically to showcase key findings on how companies leverage in IT for specific business requirements.

The Philippine CIO workshop would be the first the company is conducting locally. About 40 are expected to attend.

Accenture CIO Organization Executive Director Kenneth Corless said the event will highlight different usage models for new technologies.

Among the topics include network security, data consolidation, return on IT investments, strategic IT cost reduction, and even new technologies such as virtualization and “green” technologies.

In the workshop, Accenture will be used as one of the models of a large company that successfully managed their IT needs while reducing costs.

“What’s important here is that they have a venue for peer collaboration and to share these experiences. A large company may learn new things from a small company that is using new ways to operate efficiently. People are hungry for new ideas,” Corless said.

DA seeks US technology for farm dev't

The Department of Agriculture (DA) is exploring local applications of American agricultural technologies to further increase production and farmers' incomes.

"The Philippines and the US can collaborate in the field of agricultural science and techology as a promising way to hasten the development of practical agricultural technologies to help improve productivity in Philippine farms," Agriculture Secretary Arthur Yap said in a statement.

According to Yap, the Philippine Agricultural Development and Commercial Corp. (PADCC) and the United States Agricultural Research Service (ARS) have agreed to collaborate on the development of biofuel feedstock, particularly sugar, sweet sorghum, and cellulosic materials.

The PADCC is an attached agency of the DA, while the ARS is the main in-house research arm of the United States Department of Agriculture (USDA).

Yap said the agreement was made upon his recent visit to the USDA, along with DA Undersecretary for Special Concerns Berna Romulo Puyat, Assistant Secretary Joy Javelosa, Philippine Agricultural Attache to Washington Vic Leviste, and PADCC President Marizz Agbon.

Aside from the research on biofuels, the DA said Yap has discussed with ARS various crop simulation models that can be applied in the Philippines, as well as biocontrol of diseases in cacao crops.

Quoting USDA Secretary Tom Vilsack, Yap said a USDA-led delegation is set to arrive in Manila in October, the first-ever agribusiness mission led by the department in Southeast Asia. He said Vilsack wants to use the Philippines as "a staging ground for exports to the region for food and biotechnology."

During his meeting with the USDA, Yap said he has proposed 2 funding projects from the recently launched G-8 $20-billion food production fund. These include a $120-million program for developing climate-ready seeds, and a $20-million geographic information system and remote sensing project.