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PITON:
Filling the Marketing Void
By Michael Alan Hamlin
October 15, 2002
Ralf Ellspermann is one of those
people that sees opportunity in crisis. For Ellspermann the global
economic crisis is good news for local and international offshore
IT service providers - a number of which his Philippine IT Offshore
Network (PITON) - represents. As a result of economic pressures
to lower costs in the global marketplace, he says that "PITON
is presently experiencing an increase of more than 140% in service
inquiries, primarily coming from US and European corporations, compared
to last year."
Ellspermann - a young German expatriate
who previously worked in the auto industry in Japan and is now PITON's
CEO - claims his company is the first, largest and premier IT offshore
vendor network and consulting firm in the Philippines (Full Disclosure:
PITON is a client of mine.). It currently represents 20 Philippine-based,
leading IT service providers including domestic and international
software development firms, multimedia and web design companies,
and contact centers. Its vendors' clients include Fortune 500 corporations
such as Citibank, P&G, Microsoft, Epson, Canon, Fluor-Daniel,
Nokia, and Schlumberger.
PITON is filling an ugly void, in
my view. Since government has no coordinated country marketing or
branding campaign of its own, and little money is spent on communicating
the attributes of local e-services offerings, Ellspermann saw opportunity
in educating and assisting foreign investors and contractors. He
wound up helping local companies, too.
Since most local companies don't
have the resources to develop a U.S. or European presence, Ellspermann
takes on that role, marketing the sector and the individual companies
he represents. And because foreign purchasers of his clients' services
want to compress the normal vendor evaluation and selection cycle
for such things as call centers, Ellspermann essentially provides
a headhunter function, recommending a vendor he believes best suits
the contractor's requirements.
"There is a clamor for a local
organization - such as the National Association of Software and
Services Companies (NASSCOM) in India - that will spearhead initiatives
and activities to promote the Philippines' IT outsourcing capabilities
and advantages globally," Ellspermann says. Since no one else
has, he's taken on that role.
"Service providers are sprouting
up almost on a monthly basis as foreign companies enter the Philippines
to set up offshore operations, giving prospective clients a myriad
of choices," he says by way of explaining the relevance of
his business model. "Potential outsourcers who may be unaware
of the offshore IT outsourcing market in the Philippines but lack
an intimate understanding can be spared the usual arduous vendor
identification and selection process by tapping PITON's extensive
knowledge of the market and vendors."
Ellspermann says that it is crucial
that prospective clients are aware of options available to them
in the market. "Our vendor networking and consulting practices
are designed to help our clients practically eliminate all offshore
outsourcing-related risk while maximizing the benefits. We achieve
this due to our hands on approach and an unmatched knowledge of
the Philippine offshore IT and call center markets as well as the
key service providers."
And despite tough times, Ellspermann's
business is prospering. He told participants at a recent ICT Congress
in the Philippines that offshore outsourcing has emerged as a powerful
strategic management tool used by corporate decision makers to gain
and maintain competitive edge on a global scale. "Companies
competing with other companies that outsource e-services have little
choice but to do the same," he said, explaining the recent
surge in outsourcing to the Philippines.
And things should get even better.
By 2003, 60% of foreign companies will rely on outsourced applications,
according to a recently released Gartner Research report. This up-trend
is driven by significant offshore cost-advantages of up to 50% over
standard US rates, increased flexibility in staffing, and higher
quality and service levels, according to the report.
International Data Corporation (IDC)
predicts that offshore outsourcing will more than triple from US$6.5
billion this year to more than US$ 17.6 billion by 2005, and other
leading IT research organizations such as Giga have ranked the Philippines
as one of the world's top three global outsourcing providing countries.
Ellspermann says that software application development and IT-enabled
services such as call center and multimedia services are the areas
with the highest growth potential over the next three to five years.
Like a good many others these days,
Ellspermann believes the Philippines' has a number of basic but
important advantages over other offshore destinations, including
India, its principal competitor for outsourced e-services. "Aside
from the country's vast pool of highly qualified IT professionals,
which currently ranks second next to India, the Philippines possesses
a clear edge over all other offshore contenders due to its superior
telecommunication infrastructure. Apart from that, the Filipino's
unmatched level of American English language proficiency, which
is called 'world class' by Gartner, as well as the country's close
cultural affinity to the US clearly differentiate our country from
any other offshore destination worldwide."
Giga Information Group and Software
Outsourcing Research (SOR) both rank the Philippines as one of the
world's top four offshore outsourcing destinations for application
development and call center services. And Giga has said the country
is the world's best offshore alternative to India and has the potential
of becoming the call center hub of Asia.
Thanks to organizations like PITON,
that word is finally getting out.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). He can be reached
at mahamlin@teamasia.com.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
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