Phillipine challenge to Indian call centers
Rob O'Malley, chief consulting officer of call-centres.com,
says that anyone who thinks that India has won the battle to be the
call center capital of the world is missing keen competition from a
number of countries, especially The Philippines. In fact, there are
many reasons why The Philippines is a far better place for an
English-speaking call center than India.
Indian issues of concern
The arguments for choosing
India to house your call center are strong, but India has been very
slow to overcome several major issues. The telecommunications and
electricity infrastructures are major barriers and there are
concerns with the quality of management in some Indian call centers.
Whilst there are many good Indian vendors, their reputation is
being spoiled by others who see the industry as a way to get rich
quick. They seem content with winning business exclusively on cost,
with limited attention to quality.
The advantages
Culturally, The Philippines has more in
common with the West than India does and the Filipino accent is far
easier to understand for Westerners. Visit Manila and it seems just
like an American city without money. The Philippines has the best
spoken English of anywhere in Asia, basketball is the national sport
and Manila has the look and feel of a run-down American
city.
The key attraction of the Philippines is its highly
skilled, motivated, English-speaking workforce. A recent survey of
top executives conducted by Hong Kong's Political and Economic Risk
Consultancy rated the Philippines better than virtually any country
in Asia on the quality, cost, and availability of skilled labor.
Like everyone else, I do believe that India will house more call
center seats than The Philippines, but it won't be proportional to
its far larger population. I also believe that India will be used
for lower-value calls, whilst The Philippines will become a niche
player for more complex call center activity.
The current situation
There are around 30 call centers
operating in the Philippines. These include:
- large corporate
call centers such as America On-Line
- international outsourcers
such as Sykes and People Support
- large domestically-owned call
centers trying to tap the markets
- numerous smaller players
jointly owned by American companies and local Philippine partners.
Ford forges ahead
Ford already has a call center
presence in The Philippines and looks set to expand this
dramatically. Senior executives from Ford have already met President
Gloria Macapagal-Arroyo and promised a new call center in Manila.
There are also very strong rumors that BT Directory Enquiries will
soon be moved to Manila. Teletech have a joint venture with PLDT
(the incumbent telecoms company) which will open soon.
The Ireland of Asia
The Philippines would like to copy
Ireland in becoming a regional call center power. The Filipinos are
quick to point to cultural similarities to Ireland, and The
Philippines are evidence of why this should happen.
- Both countries are predominantly Catholic in areas of the world
where Catholicism is not prevalent.
- Both have spent much of
their history ruled by others, which led to English being widely
spoken.
- Even their most famous exports are both alcoholic;
Ireland has Guinness whilst The Philippines has San Miguel. In fact,
the main difference between the two countries is that while Ireland
is confident enough as a nation to be proud of Guinness, most people
think San Miguel is a Spanish beer.
- Their other exports are
their human assets. The brain drain that plagued Ireland for so many
years is mirrored in The Philippines.
Too modest by far
Unfortunately, the Filipinos are too
modest to talk about their inherent talents, and marketing of The
Philippines as a base for call center activity is limited. The
Philippines is also considered to be politically unstable, but in
reality is less of a risk than its neighbors.
Services supporting The Philippines industry need to be improved.
Recruitment companies, consultancies and trainers are trying to jump
on the call center bandwagon and American companies are trying to
fill the skills shortage.
Government incentives
There are a number of Government
investment incentive packages available to call center businesses.
These include the Board of Investment (BOI), Philippine Economic
Zone Authority, and the Clark and Subic Bay Special Economic Zones
in areas that were previously bases for The United States Navy and
Air Force. The BOI's primary incentive is an income tax holiday of
up to eight years. PEZA, Subic and Clark offer a special five per
cent tax break on adjusted gross income applies and also allow
equipment to be imported duty-free.
Telecommunications
The telecommunications structure in
Manila is more stable than in most Indian cities, but there are
still issues. The market is recently deregulated and there is a
serious drive to improve the infrastructure. The Philippines is also
making it very easy for call centers to use all possible modes of
international call routing.
Motivated labor force
The country is fortunate to have
a virtually unlimited pool of talented, well-trained, and motivated
workers. They are creative and learn quickly. According to Hong
Kong's Political and Economic Risk Consultancy (PERC), The
Philippines is the only Southeast Asian nation besides Singapore
with a labor force with the potential to move beyond a manufacturing
focus to a higher value-added level.
PERC ranks the Philippines as fourth in Asia on quality of labor
force, behind more expensive locations such as Japan, Taiwan, and
Singapore.
Summing up
The Philippines needs to focus time and
effort to ensure that it its viewed as a destination for quality
call centers. Bad news spreads quickly and Western companies are
unwilling to take risks when it comes to their customer
interactions.
If the country continues with its approach to quality, there is
no limit to its opportunities.
Rob O'Malley is the chief consulting officer of Asian Call
Centers, a consultancy that specializes in helping business
outsource call center activity to Asia. O'Malley has nearly 10 years
experience in the call center industry in the UK and across
Asia.
call-centres.com
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