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Atty. Benedicta Du-Baladad Message from the President:

Benedicta Du-Baladad


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PRESIDENT’S REPORT
August 2017 Issue

Last July 19, Department of National Defense (DND) Undersecretary Cardozo Luna shared with us the security policies of the Duterte Administration amidst Marawi crisis and the Martial Law in Mindanao. Unfortunately, DND Secretary Delfin Lorenzana Jr. was not able to grace the event due to an emergency meeting that he has to attend.

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Digital innovations and Philippine outsourcing
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Ms. Wilma Inventor MirandaMs. Wilma Inventor Miranda

Business Mirror (FINEX Free Enterprise)
September 15, 2017

Digital innovations and Philippine outsourcing

Finex Free Enterprise is a rotating column of members of the Financial Executives Institute of the Philippines appearing every Wednesday & Friday in BusinessMirror, banking & finance Section.

IN the recent Tholons Services Globalization Index 2017 released June 28, the top 100 cities and top 50 nations in terms of service globalization have digital transformation, innovation and start-up ecosystems as key components.

The Philippines is among the biggest leaders together with India, East Europe, China and Latin America. However, there are new entrants, like Canada, Chile and Ireland, with Poland and Vietnam, threatening to become leaders. In fact, Manila, rated as among the top 5 super cities, has moved down from second to fourth position. Cebu City is no longer in the top 10, having been eased out by São Paulo and Buenos Aires. This shows the aggressiveness of Latin American cities in terms of digital innovation, which is the prime gauge of Tholons, the leader in global outsourcing location rankings.

What are these digital innovations and transformations? I wrote in an earlier article about robotics and artificial intelligence gaining popularity. Aside from these, other digital forces adopted globally include social media, mobility, big data analytics, digital supply chains and digital trust, which are all mounting great pressure on established industry players. The Philippines and China, for instance, are facing big threats from Canada and Israel, while Latin American countries, like Chile and Brazil, are the innovators looking to grab the top positions.

In the Philippines if we are not careful, we might not see ourselves among the top 5 super cities anymore. Countries like those in Latin America and Israel are investing a great deal in digital innovation. As digital innovation move with lightning speed, businesses cope up in various ways to deliver service to their customers and manage the workplace to meet client expectations. This is where the outsourcing service providers can come in. Philippine providers should move out from the goal of cost arbitrage (although it is important) to business transformation through digital innovation in offering service to clients.

There are businesses not capable of chasing technology but they have to keep up in order to meet clients expectations. So they look for third-party outsourcing providers to support them with technology enablers. Examples of enablers are cloud platform offerings enabling clients to offer cloud-based service delivery to their customers, the use of data analytics as an effective tool in formulating business decisions and strategies, offering end-to-end solutions with managed mobility services for expense management and order to delivery models.

According to an article, “Digital Innovation and Outsourcing”, written by Kevin Parikh many organizations lag behind due to the lack of in-house capabilities to take advantage of new technologies as the new technology tools and platforms go mainstream. As they move away from stopgap technology fixes to enterprise level transformation in their business processes, they will likely be looking more for third-party providers to support them in their goal of implementing digital innovation in their office.

Service providers in the Philippines should strengthen their capability to meet the demands of the digital challenge. As clients cope with the challenge of the digital explosion of new technologies to serve their customers, service providers are also facing stiff competition in the market to keep their clients and attract more by enhancing their offerings with a clear focus on providing support for digital innovation.

According to the Tholons 2017 Service Globalization Index, there is an opportunity for growing from $2.4 trillion to $3.8 trillion by the accelerated transition of legacy businesses to digital that service providers should be aware of. A focus on digital innovation at enterprise level will give the new players an edge since they are not saddled with legacy and big transformational effort and cost. Manila, in order to regain its former rank or go notches higher as a super city, needs government support in order for providers to cope with the costs of digital transformation.

Furthermore, the Philippines should pave the way for new entrants who have the potential to engage in digital innovation, without being saddled with legacy and the cost of transformation compared to the existing players that already invested heavily in legacy or outdated computer systems. Development programs should be provided to enhance the skills of Filipino workers, to design or redesign processes, implement them, and are capable of running an automated environment.

The digital challenge that the global outsourcing is facing right now is overwhelming but presents a great opportunity enabling the country retain its status as one of the top global destinations or move up the rankings even. It depends on how the Philippines handles it. By ably meeting the challenge, the outsourcing industry rises higher in the ranings, otherwise we will see our ranking falling futher down the list.

Our firm, Inventor, Miranda & Associates, is sponsoring a seminar on Outsourcing Trends and Opportunities on October 17, at Business Inn Hotel Bacolod City, from 8 a.m. to 5 p.m.. For more info, visit our Facebook page or call us at 0917-500-0517).

Wilma Miranda is the Managing Partner of Inventor, Miranda & Associates, CPAs and Treasurer of KPS Outsourcing, Inc. The opinions expressed herein are the views of the writer and do not necessarily reflect the views and opinions of these institutions. https://businessmirror.com.ph/digital-innovations-and-philippine-outsourcing/

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