Cebu needs to step up digital transformation

CEBU, Philippines - Cebu has to step up in digital transformation to be able to bounce back in its ranking in the Tholons' top outsourcing list.

Joel Mari Yu, consultant at the Cebu City government's Cebu Economic Business Unit, said that Cebu's exclusion from the Tholons' 2017 top 10 global outsourcing hubs has shown it is lagging behind in terms of digital advancement and innovation.

While Yu believes Cebu will to do well in the voice segment in business process outsourcing (BPO) operations, he stressed it has to put more focus on digital innovation as the demand changes.

"We can do a lot of things," Yu said in a recent interview.

Cebu's pressing challenge to innovate has been underscored following Cebu's ranking in the Tholons Services Globalization Index 2017 (Top 100 “Super Cities”), released last June 28, slipped to the 12th spot from its eighth spot last year.

While the advisory firm did not explain in its report the reason why Cebu City's ranking slipped, it introduced this year “innovation, startup ecosystem and digital transformation” as key components in its ranking of global outsourcing hubs.

Also, Manila's ranking -- which was second last year after Bangalore, India -- was also downgraded to fourth place after Bangalore, Mumbai and Delhi.

For his part, Wilfredo Sa-a Jr., managing director of Cebu IT-BPM.Organization (CIB.O), said Cebu's recent ranking should push it to do more initiatives to boost the culture of innovation in Cebu.

Briann Mueller of  the Cebu Innovation Council believes Cebu has a lot of potential to advance in digital innovation given the availability of its talents currently working in outsourcing firms.

In a recent report, Colliers Philippines said: "BPO operations in Cebu City are continuously growing. The projected 5 percent to 10 percent annual growth of Cebu’s outsourcing workforce should support the expansion of the city’s consumer base."

Supporting Cebu's retail sector growth, it said, is also the establishment of more knowledge process outsourcing (KPO) firms in the city that provide higher value outsourcing services such as health information management, software engineering, and finance and accounting.

Among the major KPO firms currently operating in Cebu are Accenture, FPT Software, Cardno Engineering, Google, JP Morgan, Fluor Daniel, Medcor, and Dash Engineering.

The influx of these companies boosted the share of KPO employees to Cebu’s outsourcing workforce to nearly 30 percent in 2015 from a mere 10 percent in 2008.

“We are optimistic that Cebu will continue to attract more KPO companies given the presence of adequate infrastructure, redundant internet connection, ample supply of skilled college graduates, and a high level of urbanization driven by the development of several townships and public infrastructure projects,” said Gerard Padriga, general manager at Colliers' Cebu office.  

(FREEMAN)