Outsourcing
Had meeting with the Japanese client this morning. This is the Japanese telecommunication company and has the branch office here in the Philippines to support the Philippine telecommunication company. The meeting was to discuss the possibility if this Japanese company can find some outsourcing services that can handle the whole branch operation on behalf. Of course we are one of the candidates. The reason why they are looking for the outsourcing service is cost cutting.
Not only this telecommunication company, but also many Japanese firms have their branches here in the Philippines. Some have their factories here to utilize the cheaper labor resources. And from the Philippine point of view, accepting such foreign investments is also beneficial especially for generating the employment. It is mutually beneficial as far as the socio-economical development is concerned. At least in this point the foreign investment in the Philippines is ideal, although this is derived from the socio-economical gap rested in the North South Problem. Some might call it neo-colonialism, while still some call it industrial globalization. Anyway I do not go to the details on this controversial issue between Orange meme and Green meme conflict (or inter-paradigmatic conflict), but just focus on the Orange meme dimension here (See "Life Conditions" to understand the meaning of meme).
Although this foreign investment is an ideal situation, it seems that there are still more rooms to be improved. That is cost cutting for the branch operation where Japanese employees are working. Compared to hiring local employees, which is one of the advantages to reduce the cost, maintaining Japanese employees in the branch is so expensive. If they have to stay in the Philippines for a long period, then mostly their families also stay together and the company has to take care of everything from the living cost to the additional salary to compensate the risk of staying in the politically unsteady countries, etc.
For example, if one whole family of a Japanese employee has to stay in the Philippines, then this family needs to stay in the condominium in Makati or the house (almost mansion) inside the subdivision in Alabang with their house maids and drivers, and their children need to go to school that is mostly International School of which tuition is so expensive. Usually the parents want their children to study in International School in expecting that they can be bilingual.
The point is that having Japanese employees in the foreign countries are so expensive for any Japanese companies. Thus, they need to find the solution that is having the outsourcing services locally in stead of having the expensive Japanese employees stay in the Philippines. For example, if one of the local outsourcing companies can manage the whole branch operation on behalf of their own costly branch. It can be really an effective solution to reduce their unnecessarily expenses. This is the recent trend among the Japanese firms that have their branches in the foreign countries especially, in this case, here in the Philippines.
Coincidentally, the good thing is that so-called BPO (Business Process Outsourcing) has been a recently emerged trend in the Philippines together with call center operations. This means that the countries such as Philippines are considered as the ideal location where people handle the outsourced transactions from the companies in the US, Canada, and Australia. One of the advantages is that Filipino people can speak English fluently and the living expense here is cheaper; hence, their salaries are not so high, either. In this sense, many companies in the first world, English speaking countries can reduce the operation cost by assigning it to the outsourcing services in the Philippines, or India.
This is an interesting phenomenon. A few decades ago a number of companies used to come to the Philippines especially in looking for the cheaper factory workers. The Philippines used to be a destination for the industrial mass-production. But now, due to the industrialization and a sort of democratization in China, such destination of the mass production has been seemingly shifted into China, Vietnam and so on. The other countries that can provide much cheaper laborers than the Philippines have been revealed and get more prominent. In such circumstances the Philippines is beginning to show another possibility of the cheaper labors not in the field of industry but in the field of so-called information technology and communication services.
In this particular field, starting from the call center operations to the software developments and now BPO has become the main tool for the cost cutting for those IT companies in the first world. When the demands of BPO come out, then people in the US, Canada and Australia have already found out that the Philippines can be an ideal destination for this kind of business. And of course Filipino people are also much aware of such demands these days.
But now, the challenge is whether or not the Philippines can be the BPO destination even for the Japanese companies. Considering the fact that many Japanese factories have been here in the Philippines, it is probably acceptable as well. Once concern, however, is language. Unlike the factory works, the employments of BPO are required the more sensitive and customer oriented language proficiency. This field is basically the communication related business.
For the US, Canada and Australia, the big advantage of the Philippine BPO is that Filipinos can speak English. On the other hand, that cannot be really and obviously the advantage in the case of Japan. If some Philippine BPO company has to handle the branch operation of the Japanese company, then the proficiency of Japanese language is highly expected. In fact, that is the main reason that the call centers of Japanese IT companies are not in the foreign countries, but the rural areas in Japan such as Okinawa.
Despite such obstacle, however, BPO is still the main trend among the IT oriented globalization. Thus, Japanese companies cannot be out of this trend. In other word, even Japanese company of which branch is in the foreign countries cannot ignore the possibility of having outsourcing in the local companies. Certainly the language must be one of the obstacles in such global outsourcing. But we should think this way. If the language is one of the obstacles, then this reality shows that the true global BPO cannot ignore the multilingual situation in the business world.
It is true that what people call globalization has been monopolized by one particular language, English. But it is not the true globalization if the linguistically diverse business reality in the world has been ignored. We can maintain the convenience of using English. However, there are also other so-called business languages aside from English such as Chinese, Japanese and many European languages. Therefore, while speaking English is a big advantage for BPO (the good example is the Philippines and India), it is also true that if BPO can truly handle the multilingual situation, then it is also really a big, real advantage to enter the globally developing diverse business network.
Not only this telecommunication company, but also many Japanese firms have their branches here in the Philippines. Some have their factories here to utilize the cheaper labor resources. And from the Philippine point of view, accepting such foreign investments is also beneficial especially for generating the employment. It is mutually beneficial as far as the socio-economical development is concerned. At least in this point the foreign investment in the Philippines is ideal, although this is derived from the socio-economical gap rested in the North South Problem. Some might call it neo-colonialism, while still some call it industrial globalization. Anyway I do not go to the details on this controversial issue between Orange meme and Green meme conflict (or inter-paradigmatic conflict), but just focus on the Orange meme dimension here (See "Life Conditions" to understand the meaning of meme).
Although this foreign investment is an ideal situation, it seems that there are still more rooms to be improved. That is cost cutting for the branch operation where Japanese employees are working. Compared to hiring local employees, which is one of the advantages to reduce the cost, maintaining Japanese employees in the branch is so expensive. If they have to stay in the Philippines for a long period, then mostly their families also stay together and the company has to take care of everything from the living cost to the additional salary to compensate the risk of staying in the politically unsteady countries, etc.
For example, if one whole family of a Japanese employee has to stay in the Philippines, then this family needs to stay in the condominium in Makati or the house (almost mansion) inside the subdivision in Alabang with their house maids and drivers, and their children need to go to school that is mostly International School of which tuition is so expensive. Usually the parents want their children to study in International School in expecting that they can be bilingual.
The point is that having Japanese employees in the foreign countries are so expensive for any Japanese companies. Thus, they need to find the solution that is having the outsourcing services locally in stead of having the expensive Japanese employees stay in the Philippines. For example, if one of the local outsourcing companies can manage the whole branch operation on behalf of their own costly branch. It can be really an effective solution to reduce their unnecessarily expenses. This is the recent trend among the Japanese firms that have their branches in the foreign countries especially, in this case, here in the Philippines.
Coincidentally, the good thing is that so-called BPO (Business Process Outsourcing) has been a recently emerged trend in the Philippines together with call center operations. This means that the countries such as Philippines are considered as the ideal location where people handle the outsourced transactions from the companies in the US, Canada, and Australia. One of the advantages is that Filipino people can speak English fluently and the living expense here is cheaper; hence, their salaries are not so high, either. In this sense, many companies in the first world, English speaking countries can reduce the operation cost by assigning it to the outsourcing services in the Philippines, or India.
This is an interesting phenomenon. A few decades ago a number of companies used to come to the Philippines especially in looking for the cheaper factory workers. The Philippines used to be a destination for the industrial mass-production. But now, due to the industrialization and a sort of democratization in China, such destination of the mass production has been seemingly shifted into China, Vietnam and so on. The other countries that can provide much cheaper laborers than the Philippines have been revealed and get more prominent. In such circumstances the Philippines is beginning to show another possibility of the cheaper labors not in the field of industry but in the field of so-called information technology and communication services.
In this particular field, starting from the call center operations to the software developments and now BPO has become the main tool for the cost cutting for those IT companies in the first world. When the demands of BPO come out, then people in the US, Canada and Australia have already found out that the Philippines can be an ideal destination for this kind of business. And of course Filipino people are also much aware of such demands these days.
But now, the challenge is whether or not the Philippines can be the BPO destination even for the Japanese companies. Considering the fact that many Japanese factories have been here in the Philippines, it is probably acceptable as well. Once concern, however, is language. Unlike the factory works, the employments of BPO are required the more sensitive and customer oriented language proficiency. This field is basically the communication related business.
For the US, Canada and Australia, the big advantage of the Philippine BPO is that Filipinos can speak English. On the other hand, that cannot be really and obviously the advantage in the case of Japan. If some Philippine BPO company has to handle the branch operation of the Japanese company, then the proficiency of Japanese language is highly expected. In fact, that is the main reason that the call centers of Japanese IT companies are not in the foreign countries, but the rural areas in Japan such as Okinawa.
Despite such obstacle, however, BPO is still the main trend among the IT oriented globalization. Thus, Japanese companies cannot be out of this trend. In other word, even Japanese company of which branch is in the foreign countries cannot ignore the possibility of having outsourcing in the local companies. Certainly the language must be one of the obstacles in such global outsourcing. But we should think this way. If the language is one of the obstacles, then this reality shows that the true global BPO cannot ignore the multilingual situation in the business world.
It is true that what people call globalization has been monopolized by one particular language, English. But it is not the true globalization if the linguistically diverse business reality in the world has been ignored. We can maintain the convenience of using English. However, there are also other so-called business languages aside from English such as Chinese, Japanese and many European languages. Therefore, while speaking English is a big advantage for BPO (the good example is the Philippines and India), it is also true that if BPO can truly handle the multilingual situation, then it is also really a big, real advantage to enter the globally developing diverse business network.
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