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Enough
Business for Everyone
By Michael Alan Hamlin
January 26, 2004
I like to think I've seen - and pretty much heard
- everything. So it's not often that I hear or see something that
just stops me cold. But it happened last week. Deep in conversation
with a client about competition in the call center sector I was
told, "But who cares? There's plenty of business for everyone."
I knew that, and in fact have been told before in less direct ways,
but given the chronic grumbling by traditional business sectors
I was simply unprepared for someone to tell me with great candor
that life - at least business life - is beautiful.
And then a couple of days later it happened again. But this time
it was the medical transcription sector and involved an online discussion
about medical transcription (MT) services. MT is still mostly a
cottage industry, and very fragmented. But a few large players are
emerging. It is that process that members of DigitalFilipino's ph-outsource
group were discussing. Some of the small players were concerned
that they were going to get gobbled up by bigger, emerging players.
No worries, suggested one of those bigger players. In fact, "If
you are a small firm now and have done a terrific job servicing
a client or two, why stop there? Think big. Expand. Serve more.
Then think bigger." The writer suggested that the industry
has yet to achieve critical mass, and that the incredible demand
for MT services globally suggests that the tipping point is many
years off.
I haven't heard that kind of talk since just before the 1997 financial
crisis when Asian businesses rushed to get into every business they
could. It was a sellers market for everything, and as long as an
organization could meet basic standards of quality, costs, and service,
there were fortunes to be made. But while demand for e-Services
is huge, unlike the pre-1997 boom business is not simply there for
the picking. It still requires hard work.
To understand why, it's important to understand why there is demand
for offshore e-Services in the first place. The first reason is
cost. While the Philippines is not the cheapest place in terms of
raw price to outsource, there is tremendous pressure on margins.
US and other companies are outsourcing precisely because it's supposed
to be cheaper.
Second, outsourcing something like customer service or even outbound
sales means that US companies that outsource are trusting the welfare
and even nurturing of their customers to other organizations. They
want good reason to believe, therefore, that their customers are
going to be treated with exceptional care and patience in an impressively
competent manner. Failing to meet that unmovable objective - just
once - can ruin a company providing e-Services for good.
And it happens to both big and small firms. Although I was impressed
last week that so much e-Services demand is out there wanting and
waiting to be served, I was saddened to see some shops closing up
as well. Difficulty consistently meeting very high quality standards
is the main reason. Another is the difficulty firms starting out
can have because they don't grow fast enough to make a profit on
razor-thin margins.
Big firms face their challenges as well, particularly when hundreds
- and sometimes even thousands - of seats are dedicated to a particular
client. What happens when that client decides it wants to go elsewhere,
for whatever reason? Ironically, while there is great demand for
e-Services, that demand call also breed dependence. It happens because
it's natural to want to chase big clients. But companies that do
so must also be prepared for the unfortunate chance that a bustling
call center can suddenly go quiet.
All businesses, of course, have challenges, and clearly the challenges
and hurdles prevalent in e-Services sectors are worth taking. Recently
installed Department of Trade & Industry secretary Cesar V.
Purisima has said that approximately 40,000 employees - a higher
number than I'd previously heard - are presently employed by call
centers alone. And that number is expect to grow anywhere from 75
percent to 100 percent this year.
Growth - and potential - is so strong in the e-Services sector that
government has organized an annual exposition designed to promote
Philippine e-Services providers to the world. Called e-Services
Philippines, this year's exhibit - organized by the Center for International
Trade Expositions and Missions - will take place February 12-13
at the Edsa Shangri-La Hotel. Approximately 150 exhibitors - including
groups from Cebu, Dumaguete, and Davao - in the medical transcription,
contact center, software development, other business process outsourcing
services, and animation services sectors will market their services
to an expected 10,000 local and international visitors.
A conference featuring well-known international speakers will take
place concurrent to the exposition, and will focus on trends and
best practices in e-Services sectors. An animation festival is a
special feature this year and will showcase the work of local studios.
A contest dubbed Animazing Shorts - for amateur animators and students
- will be held for the second time.
There's enough business for everyone, but for those who want to
make sure they stay in business and understand what they're getting
into, e-Services Philippines is a good place to begin to educate
yourself. For those already in the business, it's the place outsourcers
world over come looking for suppliers. To be a player, you've got
to be an exhibitor, too.
(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), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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