How the Philippines' Rising IT Sector Can Service Japan

Back to Contents of Issue: September 2003

The Philippines boast some of the finest IT workers in the world, argues Jessica Pabellon

by Jessica Pabellon

NINE TOP IT COMPANIES from the Philippines participated in the 12th Software Development Expo and Conference (SODEC) 2003, held this July at the Tokyo Big Sight in Odaiba. SODEC is Japan's largest software development exhibition, and this year's Filipino presence was a first.

"SODEC is one of our best ICT projects to date," says Roman G. Baltazar, Tokyo-based Commercial Counselor for the Center for International Trade Expositions and Missions. "It proves the competitive position of the Philippines in this sector -- even in a non-English speaking environment such as Japan."

Japan's future labor shortages have been amply covered in the global media. Filipino laborers come from a multicultural society that makes them extremely adaptable to multinational work environments. They are not only multi-skilled, but English-proficient as well -- and an increasing number are taking their communication skills a step further by mastering the Japanese language. They work long hours, and their salaries are typically one-tenth of their counterparts' earnings in the US.

Filipino knowledge workers
have been working behind the
scenes of the IT industry for
more than 25 years

With 643 IT schools, 400 technical schools and 86 colleges and universities turning out an estimated 350,000 graduates every year, the Philippines boasts a 94 percent literacy rate -- and ranks second among 15 Asian countries in terms of training.

The Philippine IT industry has grown dramatically over the past 30 years. From $10 million export revenue in 1989, the Philippine IT industry now exports approximately $1 billion in information technology services generated from some 290,000 skilled professionals. Once considered the "best-kept secret" of global companies, it has grown into an advanced industry capable of providing a broad and highly specialized range of services to different sectors in the local and foreign markets.

Filipino knowledge workers have been working behind the scenes of the IT industry for more than 25 years, providing the technological backbone for some of the biggest international firms. With five operational cyberparks and 1,739 registered IT companies all over the country, the Philippines is not only a top contender for the distinction of being the e-services hub of Asia, it is also recognized as a major outsourcing services provider for American, European, and Japanese firms.

US companies -- including Oracle, Lotus, IBM and Microsoft -- currently dominate the Philippine IT software and services outsourcing industry, holding more than 50 percent of the total market share. The challenges of the global economy have led an increasing number of companies to tap overseas professionals to do part (and sometimes all) of their backroom business processing and computer operations. Offshore outsourcing offers the single best solution to the rising cost of operations for many companies. The Philippines is an ideal offshore outsourcing services provider, not only because of the low cost of labor, but primarily for the superior quality of its human resources.

One of the first companies to pioneer the Japanese IT offshore outsourcing market was Advanced Technology and Systems Inc., (ADTX), a Philippines-based subsidiary of IBM-Japan and the Alcantara Group of Companies. A research and development company dealing in application software development, retail solutions, storage solutions, mobile device services, firmware and device driver development and Product Quality Assurance Service, ADTX's pride is its Training Center, which it established in cooperation with NIIT Philippines this year.

ADTX won the "Best Product" Award for its Multi-Monitor Color Panel in April of this year in the e-Services Philippines (the country's premier ICT trade fair in Manila). The company enlists the most promising IT graduates in the Philippines to train as scholars in a five-month intensive program based on JITSE (Japanese IT Standard Examination) standards. The program not only equips graduates with new technologies, but also sharpens "soft skills" in business, leadership, communications and Japanese language proficiencies.

These companies combine the
advantages of Filipino ingenuity and
friendly service with the strength of
Japanese technology and discipline

Equally strong in its emphasis on training and research is Astra (Philippines) Inc. The company is unique among other Philippine IT firms in its strong ties with the University of the Philippines. Its close collaboration with academia gives it direct access to some of the most brilliant minds in the country and keeps it in the forefront of research and development.

Astra is currently working to develop its own software, which it hopes to release in the international market in the near future. Some of its other services include corporate application systems development, database system development, web system development, content design and production and engineer placement.

Customized service from start to finish is EAZIX Inc.'s promise. "We had three objectives at SODEC this summer," notes Luke Mendoza, EAZIX's director and head of systems and software development. "To understand Japan's needs in software outsourcing, to introduce EAZIX and to benchmark other global outsource solution providers. We achieved two of those objectives this summer, and we look forward to a bigger and better participation next year."

A joint venture of electronics manufacturing service provider Integrated Microelectronics Inc. (IMI) and global logistics service supplier SiiX Corporation, EAZIX is engaged in design services and original design manufacturing (ODM) design development. Its forte is in digital multimedia, radio frequency, and wireless networking for home and office environments. This one-stop-shop approach not only expedites the client's time-to-market, but also assures total intellectual protection -- from the conceptualization stage down to the delivery of the finished products.

With over 16 years of IT experience, First Datacorp's strength lies in combining its products and services to address the critical business issues of its individual clients. The core competence of the company is in system integration, revolving around the Unix and NT environments. It major services are CAD Outsourcing, Application Development Outsourcing and HP OpenView Consulting & Deployment.

As an HP Premier Service Provider, First Datacorp provides unparalleled hardware and software services management for its HP clients. Through its affiliates, I-Merge Online and Info Source-Out, Inc., the company is presently engaged in CAD outsourcing for the Japanese market.

Established in 1993, Radix Systems Services Corporation is an IT outsourcing services company established to provide local and international clients with highly professional and superior technical and business application skills and service products.

A member of IBM PartnerWorld for Developers, and a Microsoft Certified Partner, Radix's expertise and experience are built around the IBM AS/400 platform and the Windows environment. The company's areas of focus are in application software development, implementation, and support services. Their identified major advantage is a readily available pool of skilled personnel at lower labor rates.

Combining the resources and competence of its Japanese and Filipino investors and manpower, SGS Technology Corporation's role is to provide marketing for Philippine IT capabilities abroad. An affiliate of the Suganuma Group of Companies and Cat's Hands Corporation of Japan, and SGS Human Resources Corporation and SGS Import & Export Corporation of the Philippines, the company trains and authenticates Filipino knowledge workers' skills in the areas of Internet technology, network administration and software development and application. By maintaining high standards and a steady pool of readily accessible manpower, the company is able to deliver quality outsourcing service on demand.

SGS Technology Corporation is also engaged in the offsite development, design and creation of customized software application for Japanese companies. In coordination with Terix Technologies of Germany, the company also provides services in web hosting, design and administration.

Hugle Technologies, Inc. specializes in wireless embedded applications while providing the ultimate solution for wireless product development through Bluetooth and RF applications. Its R&D team is highly competent in the development of ideas, designs, and concepts utilizing wireless applications, with solid technical skills in the design and development of micro-code using 32-bit microprocessor and its tools. Its resources are highly capable of performing functional tests for various embedded software applications.

Proudly Filipino, and backed by strong Japanese ties and technology, these companies show why Philippine IT professionals may be the ideal offshore outsourcing service providers for the biggest and most reputable companies in the world. @

Note: The function "email this page" is currently not supported for this page.