Upload
isaac-lewis
View
222
Download
0
Tags:
Embed Size (px)
Citation preview
IT Services IT Services Industries in Industries in
Developing NationsDeveloping Nations
Andrea NelsonJessica Cassano
Developing Developing CountriesCountries
Countries that are generally Countries that are generally characterized by low levels of characterized by low levels of industrialization, personal industrialization, personal incomes, educational incomes, educational attainments and health attainments and health standards standards
Source: home.ica.net/~drw/glossc-d.htm
IT Service IndustriesIT Service Industries
Although India and China are Although India and China are leaders in Offshoring for leaders in Offshoring for developing countries, other developing countries, other countries are setting up the countries are setting up the systems and infrastructure to systems and infrastructure to compete in this global compete in this global marketplace. marketplace.
Global Outsourcing Report: Global Outsourcing Report: Opportunity, Costs and Opportunity, Costs and
RisksRisks Costs (30%)Costs (30%) Risks (54%)Risks (54%)
– Geopolitical risk (10%)Geopolitical risk (10%)– Human capital risk (10%)Human capital risk (10%)– IT competency risk (10%)IT competency risk (10%)– Economic risk (6%)Economic risk (6%)– Legal risk (6%)Legal risk (6%)– Cultural risk (6%)Cultural risk (6%)– IT infrastructure (6%)IT infrastructure (6%)
Market Opportunity Rating (16%)Market Opportunity Rating (16%)
HofstedeHofstede StudiesStudies
Power Distance Power Distance Index (PDI)Index (PDI)
Individualism (IDV)Individualism (IDV) Masculinity (MAS)Masculinity (MAS) Uncertainty Uncertainty
Avoidance Index Avoidance Index (UAI)(UAI)
Long-Term Long-Term Orientation (LTO)Orientation (LTO)
Source: Geert Hofsted Cultural Dimensions; www.geert-hofstede.com
CountriesCountriesPhilippinesPhilippinesThailandThailand
PhilippinesPhilippines CultureCulture
– Inequalities of power and wealthInequalities of power and wealth– Collective society, extended families, group Collective society, extended families, group
responsibilitiesresponsibilities– Male dominance in power structureMale dominance in power structure– Risk taking society, accepts changeRisk taking society, accepts change– Traditions are not impediments to changeTraditions are not impediments to change
WesternizedWesternized– English Speaking, neutral accentEnglish Speaking, neutral accent– Business laws and accounting practices are Business laws and accounting practices are
similar to U.S. similar to U.S.
Source: www.outsourcing.ph
Source: Philippines Geert Hofsted Cultural Dimensions; www.geert-hofstede.com
Hofstede Studies Hofstede Studies ( Philippines)( Philippines)
Source: Philippines Geert Hofsted Cultural Dimensions; www.geert-hofstede.com
ThailandThailand CultureCulture
– High levels of inequality of power and wealth High levels of inequality of power and wealth Not forced, cultural heritageNot forced, cultural heritage
Strict rules, laws, polices, and regulationsStrict rules, laws, polices, and regulations– Try to avoid uncertaintyTry to avoid uncertainty
Low individualismLow individualism– Loyalty to family is key, over-rides rules, lawsLoyalty to family is key, over-rides rules, laws
Less AssertivenessLess Assertiveness– Less competitivenessLess competitiveness
95% Buddhist values (LTO)95% Buddhist values (LTO)– Being mindful & aware of thoughts and actions, Being mindful & aware of thoughts and actions,
developing wisdom and understanding developing wisdom and understanding
Source: Thailand Geert Hofsted Cultural Dimensions; www.geert-hofstede.com
Hofstede Studies (Thailand)Hofstede Studies (Thailand)
Source: Thailand Geert Hofsted Cultural Dimensions; www.geert-hofstede.com
PhilippinesPhilippines Location:Location:
– Southeastern Asia, Southeastern Asia, between Philippine between Philippine Sea and the south Sea and the south China Sea , east of China Sea , east of VietnamVietnam
Population:Population:– 81,159,64481,159,644
Educational System:Educational System:– Similar to USASimilar to USA– Good system - more Good system - more
students enrolled in students enrolled in University than University than EuropeEurope
Major Cities:Major Cities:– ManilaManila
Source: www.computerworld.com (9/15/03); www.offshoreitoutsourcing.com
ThailandThailand
Location:Location: – Southeastern Asia, Southeastern Asia,
southeast of Burmasoutheast of Burma Population:Population:
– 66,444,37166,444,371 Educational System: Educational System:
– SchoolNetSchoolNet– Only 5,000 IT specialist a Only 5,000 IT specialist a
yearyear Major Cities:Major Cities:
– BangkokBangkok
Source: www.odci.gov ; CIA – The World Factbook; Digitizing a nation; Far Eastern Economic Review; Mar 8, 2001; 164; 9
PhilippinesPhilippines Religion:Religion:
– 83% Roman Catholic83% Roman Catholic– 9% Protestant9% Protestant– 5% Muslim5% Muslim– 3% Buddhist and 3% Buddhist and
otherother Language:Language:
– Pilipino (official Pilipino (official based on Tagalog)based on Tagalog)
– English (official)English (official)
Source: www.odci.gov ; CIA – The World Factbook
ThailandThailand ReligionReligion
– 94.6% Buddhist94.6% Buddhist– 4.6% Muslim4.6% Muslim– 0.7% Christian0.7% Christian– .1% other.1% other
LanguageLanguage– ThaiThai– Ethnic and regional Ethnic and regional
dialectsdialects– English (secondary English (secondary
language of elite)language of elite)
Source: www.odci.gov ; CIA – The World Factbook
PhilippinesPhilippinesLiteracy Rate:Literacy Rate:
– 94.6%94.6% Age 15 and over can Age 15 and over can
read and writeread and write
Life Expectancy: Life Expectancy: – 64.65 males64.65 males– 70.46 females70.46 females
Source: www.odci.gov ; CIA – The World Factbook
ThailandThailand Literacy Rate:Literacy Rate:
– 92.9% 92.9% age 15 and over can age 15 and over can
read and writeread and write
Life ExpectancyLife Expectancy– 69.65 males69.65 males– 74.37 females74.37 females
Source: www.odci.gov ; CIA – The World Factbook
PhilippinesPhilippines GDP per Capita:GDP per Capita:
– $390.7 billion$390.7 billion– GDP growth: 4.5%GDP growth: 4.5%
Government:Government:– 3 branches(Republic)3 branches(Republic)
PresidentPresident Congress/SenateCongress/Senate JudicialJudicial
Availability of Skilled Availability of Skilled Labor:Labor:– 380,000 college 380,000 college
graduatesgraduates– 15,000 IT graduates15,000 IT graduates
Source: www.computerworld.com (9/15/03); Global Ventures, Inc. – Global outsourcing report pg 36
ThailandThailand GDP:GDP:
– $524.8 billion$524.8 billion GDP per CapitaGDP per Capita: :
– Purchasing power parity Purchasing power parity - $8,100 - $8,100
GovernmentGovernment::– Constitutional monarchyConstitutional monarchy
Availability of Availability of Skilled Labor:Skilled Labor:– Nearly ¼ of firms are not Nearly ¼ of firms are not
operating at full capacity operating at full capacity due to skill shortagedue to skill shortage
Source: www.odci.gov ; CIA – The World Factbook
PhilippinesPhilippines
Government Support for IT ServicesGovernment Support for IT Services
– Tax holidayTax holiday– Business parkBusiness park– DeregulationDeregulation
Source: Global outsourcing report
ThailandThailand
Government Support for IT ServicesGovernment Support for IT Services
– Business ParkBusiness Park– DeregulationDeregulation– SchoolNetSchoolNet
Source: www.odci.gov ; CIA – The World Factbook
Piracy RatesPiracy Rates
Philippines:Philippines:– 71% software piracy71% software piracy– $69 Million in losses$69 Million in losses
Thailand:Thailand:– 79% software piracy79% software piracy– $183 Million in losses $183 Million in losses
Source: www.bsa.org/globalstudy
Philippines Technology Philippines Technology InfrastructureInfrastructure
3.3 Million land-line telephones3.3 Million land-line telephones 3.5 Million cellular telephones3.5 Million cellular telephones 93 Internet services providers93 Internet services providers
Source: Global Outsourcing Report
Thailand Technology Thailand Technology InfrastructureInfrastructure
6.6 Million land-line telephones6.6 Million land-line telephones 26.5 Million cellular telephones26.5 Million cellular telephones 15 Internet services providers15 Internet services providers 6.9 Million Internet users6.9 Million Internet users
Source: Going Global Ventures Inc., Global Outsourcing Report. pg 36
Size of IT services Size of IT services market (Philippines)market (Philippines)
2005 market growth 29%2005 market growth 29% 2.2% of GDP in 20052.2% of GDP in 2005 $1 Billion$1 Billion 30 Companies30 Companies 10,000 software programmers10,000 software programmers
Source: Going Global Ventures Inc., Global Outsourcing Report. pg 36
Size of IT services Size of IT services market (Thailand)market (Thailand)
Increased from $817 million in 1999 Increased from $817 million in 1999 to $1.5 billion in 2002to $1.5 billion in 2002
5.6% of population are Internet users 5.6% of population are Internet users (2001)(2001)
16% in Bangkok16% in Bangkok
Source: EIU ViewsWire; Thailand industry: Internet use is held back by rural poverty; Apr 28, 2003
3 Major Software/Service 3 Major Software/Service Providers (Philippines)Providers (Philippines)
SVISVI SPISPI AJK ConsultingAJK Consulting
Software Venture Software Venture InternationalInternational
Largest outsourcing company in RPLargest outsourcing company in RP– 2500 Employees2500 Employees– $40 Million in Annual revenues$40 Million in Annual revenues
Low costLow cost High qualityHigh quality IFC investmentIFC investment
Source: IFC Invest in largest Software Outsourcing House in the Philippines; Jul 2003
Outsourcing in Outsourcing in PhilippinesPhilippines
Overview: Strong educational system, low risk, Overview: Strong educational system, low risk, language compatibilitylanguage compatibility
Ondeo Nalco CompanyOndeo Nalco Company– Naperville, ILNaperville, IL
Reasons for choosing the PhilippinesReasons for choosing the Philippines– English-speakingEnglish-speaking– Low costLow cost– Joint developmentJoint development– Disaster recovery plansDisaster recovery plans
Source: www.computerworld.com 9/03
Assessing Risks to Ondeo Assessing Risks to Ondeo Nalco Nalco
Time differenceTime difference System securitySystem security Militant groupsMilitant groups
Source: www.computerworld.com
Internet penetrationInternet penetration
PhilippinesPhilippines– 4%4%
ThailandThailand– 2%2%
Global averageGlobal average– 5%5%
Source: EIU ViewsWire. New York Aug 1,2003; Digitizing a Nation; Far Eastern Economic Review; Mar 2001; 164, 9.
Information and Technology Information and Technology and E-commerce Council and E-commerce Council
(Philippines)(Philippines)
Failure of Congress to ratify budget Failure of Congress to ratify budget for e-commerce initiativesfor e-commerce initiatives
P1 Billion for ICT initiatives – rejectedP1 Billion for ICT initiatives – rejected Current President Arroyo orders Current President Arroyo orders
E-government fund E-government fund
Source: Computerworld Philippines. Metro Manila, Feb 16,2004 pg 1
E-commerceE-commerce
PhilippinesPhilippines~$2 to $3 Million (2000)~$2 to $3 Million (2000)
ThailandThailand~$31 Million (1999)~$31 Million (1999)
Source: EIU ViewsWire. New York Aug 1,2003.
Government RegulationGovernment Regulation
CAT (Communication Authority of CAT (Communication Authority of Thailand)Thailand)– Government regulation of Internet and telephone Government regulation of Internet and telephone
connectionsconnections– Monopolistic – high cost, poor quality, and Monopolistic – high cost, poor quality, and
generally unresponsive to consumers.generally unresponsive to consumers.
TOT (Telephone Organization of TOT (Telephone Organization of Thailand)Thailand)– 2002 – register as private companies2002 – register as private companies– 50% of each sold to the public50% of each sold to the public
Source: E-commerce emasculated; Far Eastern Economic Review; Sept. 21, 2000 pg26; www.business-in-asia.com/telecom_software_electronic.html
National Electronic and Computer National Electronic and Computer Technology Center( NECTC)Technology Center( NECTC)– Government agency responsible for development of IT Government agency responsible for development of IT
in Thailandin Thailand– Initiated SchoolNet (Internet services)Initiated SchoolNet (Internet services)
Electronic Commerce Resource CenterElectronic Commerce Resource Center– Set up by Ministry of Science, Technology and Set up by Ministry of Science, Technology and
EnvironmentEnvironment– Helps with awareness, training programsHelps with awareness, training programs
www.thaiecommerce.netwww.thaiecommerce.net– Government website to allow companies to sell online Government website to allow companies to sell online
at no costat no cost
E-commerce Resources E-commerce Resources (Thailand)(Thailand)
Source: Journal of Global Information Technology Management; 2003; 6,3, pg 72; Slow Progress; Asian Business. Nov 2000 pg 19
National Electronic and National Electronic and Computer Technology Computer Technology
Center (NECTC)Center (NECTC)
www.thaiecommerce.netwww.thaiecommerce.net
Software Park ThailandSoftware Park Thailand
Est. 1997Est. 1997 In 2003:In 2003:
– 50 Companies50 Companies– 17 Companies 17 Companies
with with International International LinksLinks
– $10 Million/yr in $10 Million/yr in incomeincome
Source: www.swpark.com
Major Software/Service Major Software/Service ProvidersProviders
– Companies include:Companies include: IBM (Thailand)IBM (Thailand) Oracle (Thailand)Oracle (Thailand) Intel (Thailand)Intel (Thailand) Sun (Thailand)Sun (Thailand) Microsoft (Thailand)Microsoft (Thailand)
Source: www.swpark.com
Risks of Doing BusinessRisks of Doing Business
PhilippinesPhilippines– Complex DisputesComplex Disputes– TerrorismTerrorism– Illicit DrugsIllicit Drugs– Typhoon BeltTyphoon Belt– TsunamisTsunamis– RebellionsRebellions– Declining MarketsDeclining Markets– ERAP FactorERAP Factor
ThailandThailand– Complex DisputesComplex Disputes– TerrorismTerrorism– Illicit DrugsIllicit Drugs– Typhoon BeltTyphoon Belt– TsunamisTsunamis– RebellionsRebellions– InflationInflation– Legal SystemLegal System
Source: Research Technology Management; Jul/Aug 1994; 37, 4; Forbes.com, DiCarlo, 5/22/03; Knight Ridder Tribune Business New. Wash.: Apr 26, 2005, pg 1
Benefits of Doing Benefits of Doing BusinessBusiness
PhilippinesPhilippines– Low costLow cost– English-speaking English-speaking – Tax BreaksTax Breaks– Requires very little Requires very little
capital for start-upcapital for start-up– Niche SpecialtiesNiche Specialties– Backup SiteBackup Site– Western InfluencedWestern Influenced
ThailandThailand– Low costLow cost– Requires very little Requires very little
capital for start-upcapital for start-up– Niche SpecialtiesNiche Specialties– Backup SiteBackup Site– Security risk is Security risk is
historically low historically low – Western InfluencedWestern Influenced
Source: Research Technology Management; Jul/Aug 1994; 37, 4; Forbes.com, DiCarlo, 5/22/03;
Conclusions for IT Conclusions for IT ManagerManager
Evaluate Technology InfrastructureEvaluate Technology Infrastructure Research Local IT Service ProvidersResearch Local IT Service Providers Government Initiatives/Tax BreaksGovernment Initiatives/Tax Breaks Assess Benefits vs. RisksAssess Benefits vs. Risks Partner with Firm for Niche ProductsPartner with Firm for Niche Products Consider Backup OptionsConsider Backup Options