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NASSCOM: INDIA LEADERSHIP FORUM 2009,Re-shaping the Global Economy, Session 1C: How to succeed in Asia: A primer on unlocking the potential in our backyard.
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2.
www.bpap.org
3. O&O market USD billions Source: Team analysis~45 2005 ~130 2010 CAGR +24% Addressable market Actual penetrated market ~450 10% ~30% 30 4. Philippine IT-BPO industry currently has overUSD 6 billion in revenues Source: Team analysis1.5 2004 6.1 2008 42% 299,168 2004 371,965 2008 39% 285 Direct employmentFTEs RevenuesUSD billions
5. Philippine IT-BPO: Growing All SectorsSource: Joint BPAP/BOI/PEZA/CICT Task Force Sector 2007 Revenues ($000,000) Past 3 years Ave growth Contact Centre 3,600 52 Back Office (non-voice BPO) 398 46 Transcription (non-voice BPO) 197 24 Animation 105 38 Software 423 35 Engineering/Design Process 152 55 TOTAL Philippine IT-BPO(export only) 4,875 50 6. * Contains multiple countries Source:Duke University/Booz Allen Offshoring Research Network 2006 survey Percentage of firms citing offshore location of choice China EasternEurope* OtherAsia* 18 Others* 21 India 19 Philippines 14 LatinAmerica* ITO ESO 13 45 12 49 13 45 19 12 BPO Back office Call center 5 2007Outsourcing Destination of the Year National Outsourcing Assoc, UK# 2 # 2 7. 8. Cost to employer index across average of 7 occupations, 2005/06, Index, US = 100 IndiaPhilip-pinesChinaMala-ysiaMexicoChilePolandHun-garyBrazilCzech Repu-blic RussiaCan-adaUS JapanIrelandUK Ger-many
Source: McKinsey Global Institute; Watson Wyatt 2005/06 report 9. Source:www.infodev.org/en/Publication.170.html (copyright: World Bank)/ZDNet Asia 2007 The Philippine Talent Value Proposition:Cost CompetitivenessBPO Sector Average Entry-Level Salaries (in $/year) South Africa 19,764 Mexico 18,653 China 5,680 Egypt 4,237 India 3,911 Philippines 3,858 IT Professionals Annual Average Salary (US$) Hong Kong 51,964 Singapore 41,601 Malaysia 16,696 India 14,702 Indonesia 11,231 Philippines 10,730 10. Of 100 graduates with the correct degree, how many would you employ if you had demand for all? Per cent Engineer Countries* Mexico is the only country where interview results (higher number) were adjusted ex-post since interview base was thinnerSource: Interviews with HR managers; HR agencies and Heads of Global Resourcing centers; McKinsey Global Institute Asia Latin AmericaEastern EuropeSuitability rates are empirically based on a total of >80 interviews with HR professionals working in each country 42* 35* Finance/accountingGeneralistChina Philippines India Malaysia Brazil Mexico Russia Czech Republic Poland Hungary 11. Source:Phils Comon Higher Education : CIA World Factbook 2007; *China data for unemp and literacy is major Cities only Suitability rates are empirically based on a total of >80 interviews with HR professionals working in each country
Number of college degree graduates2007 Annual growth Business & Accountancy 128,000 Engineering & Tech 55,752 IT-related courses 42,047 Architecture 3,100 Medical Sciences 31,400 Fine Arts/Humanities 7,660 TOTAL Tertiary level454,818 3.8% Pop Labour force Unemp rate Literacy World 6,602M 3,400M 6.3% 82.0% India 1,130M 509M 7.8% 61.0% China 1,322M 798M 4.2%* 90.9%* Brazil 190M 96M 9.6% 88.6% Philippines 90M 36M 7.9% 92.6% 12.
Build reputation for operational excellence, business model innovation Consolidate position in voice, develop position in adjacencies,natural affinitiesLeverage intrinsic strengths, establish capabilities Building blocks Talent Cost BusinessEnvironment RiskManagement Infrastructure 13. Presence of Dedicated IT Parks Right in the Center of Business Districts McKinley Hill Taguig The Philippine Workplace Infrastructure Proposition:IT-BPO designed, reliable infrastructure Northgate Cyberzone Muntinlupa City RCBC Plaza, Makati City Bonifacio Technology Center, Taguig City Eastwood City Cyberpark Quezon City PBCom Tower Makati City METRO MANILA 14.
Expatriatestop choice for quality of life HOSPITABLE LIFESTYLE 15.
The Philippines is viewed as a Favorable Location for IT-BPO Services 16. Philippine IT-BPO: Prospects for Growth
2007 Offshoring Destination of the Year -Philippines 17. Our Goals MARKET SHARE HEADCOUNT REVENUES 18. The Challenge
19. The Action
20. Note: GDP estimates are at 2005 prices and PHP 46.30 (May 07) forex. Source: NSCB Economic Accounts; NEDA-MTDP; team analysis Exports USD billions Employment creation Million jobs 98% 2% 117.0 2005 92% 8% 163.0 2010 100% = 95% 5% 47.5 2005 85% 15% 84.3 2010 100% = GDP USD billions BPO estimated tocontribute 8% of total Philippine GDP by 2010, higher than the current share of finance, real estate, or transportation and communication Industrys five year 40% CAGR to outstrip 12% average for exports Industry to provide one of every ten jobs created in the Philippines in the next 3-4 years 94% 6% 2.4 2005-06 90% 10% 6.8 2007-10 100% = PRELIMINARY 10 Others IT-BPO 21. Source: Team analysisKey issues Suitable and abundant talent Operational performance Quality infrastructure Conducivebusinessenvironment
Risk management NEXT WAVECITIES BUSINESS ENVIRONMENT TALENT TEAM2010 22. Potential Labor Pool TALENT 23. * Non-traditional pools include college drop-outs with less that two years tertiary education, high school graduates who do not enroll In college, housewives, and retirees ** PPS: Percentage points Source: CHED; MGI; BPAP; NSCB; ADB Statistical Database; interviews; team analysis ESTIMATES Estimated impact (2007-10) Thousand FTEs Thematic program Develop comprehensive assessment and training program
Affected talent pools Improve awarenessof career opportunities in IT-BPO
Tap alternative talent pools
Improve ability to fund
Focus on responsive curriculum changes
Short-term Low-end FTE impact High-end FTE impact Long-term 30 100 210 10 30 150 20 40 10 30 560 290 TALENT 24. Source: Team analysis Information Services BPAP Inventory BPAP city scorecard Case studies NEXT WAVECITIES
Topics
Information demands 25. Davao Metro Cebu Iloilo Metro Manila Naga Baguio Bacoor Bacolod Cagayan de Oro Santa Rosa Legazpi Zamboanga Tacloban *Super cities have >15,000 IT-BPO workers; large cities have a potential capacity of 10,000 15,000, mid-sized cities 5,000 10,000; another 20-plus cities offer a potential capacity of