Business Week recently unveiled sponsored benchmark of 2008 IT competitiveness Index, where the Philippines ranked higher than most of its counterparts such India, China, Vietnam, Indonesia and Russia. Suffice to say, Philippines has emerged as one of the major players in the global outsourcing industry specifically on the strength of the following indicators:

• Overall business environment: 0.10
• IT infrastructure: 0.20
• Human capital: 0.20
• Legal environment: 0.10
• R&D environment: 0.25
• Support for IT industry development: 0.15

With a score of 29.8, which is way below the score of this year’s still most competitive country, the United States with 74.6, the Philippines has so much catching up to do. However, no matter the ranking, the country is taking the proverbial baby steps towards the right direction, as the information technology—particularly in software development—and communication are some of the key areas where Philippines can compete with other global players.

Let’s see how the country fares in some of the criteria used by the magazine’s Economist Intelligence Unit.

Overall business environment

The country posted a very positive 7.5% GDP growth in 2007, and if not for the recent challenges in the global financial market, the country could have posted at least 5.5% growth in the economy; the Philippine economy has been growing by a positive 5% since 2001. From a low of $1,400 purchasing power parity at the start of the decade, the Philippines enjoys some $3,400 PPP as of 2007.

IT Infrastructure

Thanks to increasing demand from businesses and consumers, local telcos have aggressively pursued broadband development in the past two years. Some $800 million have been spent so far by the country’s leading telcos on improving the infrastructure, which also rides on the popularity of mobile communication in the country. Mobile use enjoys an overall subscriber base of 67% of the population.

Human Capital

The US-based consulting firm, Meta Group ranks the Philippines as the top player in knowledge-based jobs and workers worldwide. The country boasts of a huge army of software engineers, content developers, creative designers, and professionals in accounting and finance, legal, and health care. The Philippines’ emphasis on English as the official mode of instruction is finally paying off, as the Philippines has the third largest English-speaking population.

Support for IT Developments

The government is one of the biggest supporters of the IT industry, thanks to the possibilities that it can provide in creating jobs and making the country globally competitive in business process outsourcing. Last year, the government unveiled regional ITC centers outside Metro Manila, allowing further access to a vast talent pool and tax breaks for businesses that set up offices in assigned economic zones.

The Philippines shows so much promise in offshoring that even India-headquartered outsourcing companies, such as Tata Consulting and Infosys have opened offices in Manila. The local association of outsourcing businesses aims to increase its workforce size to one million and earn revenues of up to US$13 billion by 2010.

Every month (or so) we conduct a bonding activity to promote employee camaraderie here in Ideyatech. For the month of September we have the mooncake activity (or is this festivity?), where there are prizes (cash), food and of course lots of fun .

Here are some of the pictures (guys, next time remember to smile to the shutter):

Just in case you don’t know what Mooncake is all about (sounds like me) here’s an email from Philip (our events organizer)

“ Buddhists, Taoists and believers of Chinese folk religions consider the seventh lunar month (August) as the “Ghost Month,” otherwise known as the “Month of the Hungry Ghosts”, in which ghosts and spirits, including those of the deceased ancestors, come out from the lower realm. The first day of the month is called the “Opening of the Gates of Hades” since it is believed that the gates of Hell are flung open on this day to allow the ghosts and spirits of the nether world into the world of the living for a month of bacchanal of food and wine. This earthly party comes to an end on the last day of the month, called the “Closing of the Gates of Hades,” since the portals to the spirit world are shut once again on this day. On the 15th day of Ghost Month, many people stay at home to avoid an unlucky encounter with a ghost out enjoying the Ghost Festival; and special care is taken to avoid walking near riverbanks where a water spirit may easily steal the body of the living. During this whole period, the believers suspend all important activities and decisions. “

This is my first mooncake experience and by the end of the game I got a total of 420, not bad at all.

Full picture set is located here.

Offshore outsourcing is a brilliant business strategy for many businesses. Gartner analysts predict that offshore outsourcing will rise by 8.9% in 2008, and the trend will continue on to 2009. However, it is not (yet) a perfect solution to various business issues and requirements. Before engaging the services of vendors, whether by offshore or onshore outsourcing, it is important to know that outsourcing has its own sets of issues.

The bright side of the debate is that if a business understands the issues surrounding outsourcing, these “cons” can easily be turned into “pros” that will add up to profitability and result in better quality of products and services. Below are some of the risks that you must understand about outsourcing:

• You are putting parts of your business in someone else’s hands. Realize that you are inviting a third party into your own operations. Business matters that used to be kept within your company’s walls are being laid open to the scrutiny of the vendor, or as some say, consultant. While trust must be established between the company and the vendor, it is absolutely necessary to form security measures from contracts to security audits. And be hard-headed in the implementation of these contracts. In most security breaches, the weakest points are not the systems put in place to prevent data leaks, but humans, the staff themselves, who fail to understand the enormity of keeping corporate information secure.

• Business experts and visionaries are still a weak spot among outsourcing destination. Offshore outsourcing vendors can provide highly skilled workers who can perform volume tasks. However, management is often a weak spot among vendors. This means the lack of familiarity or knowledge of established processes by your company, lack of enough knowledge about your business or industry. In cases like these, it is important to know the people who will lead your outsourcing team. In many situations, middle- and junior managers receive months-long trainings on-shore before getting their feet wet with actual project delivery.

• Unfavorable business conditions in offshore destinations include economic and political factors. If you think that you are giving away control of parts of your businesses to companies located outside your country, consider how much less control you will have if you factor in the political and economic upheavals in that country.  Any upheavals at all poses risks of operational disruptions. You must make sure that there are business continuity measures put in place in case it is business unusual offshore.

• Businesses only consider outsourcing in terms of cost-savings instead of value to the company. This weakness happens on both ends of the outsourcing spectrum. Both business and vendor only see outsourcing as a way to cut costs instead of adding value to the company’s product, services, customer relationship, among other things. Instead of concentrating on the outsourcing relationship in terms of money savings alone, it is important to add long-term product or service innovation and process improvement in the mix. The money saved today can be reinvested into bigger endeavors tomorrow.

For the past two months, we have been having our weekly T3 (Tuesday Tech Talk) sessions. It’s a 30-minute discussion about any technical topic the presenter would like to discuss. Presenters are randomly selected from the development group.

So far, we have received nothing but benefits from this activity. Here are some of its benefits and advantages:

1. The presenters get an opportunity to talk, express themselves and practice their presentation skills. More importantly, they steer away from the developer mindset for a while, get out of their shells, and think of good topics to discuss.
2. The attendees learn something new. Everybody seems to know something others don’t.
3. Everyone begins to understand the specialization and span of knowledge of their colleagues. In this way, it becomes easier to know who to ask regarding particular topics. Subsequently, the developers become experts and specialists in their own way.
4. This builds camaraderie within the team. Everyone relaxes and opens up their minds for new knowledge.
5. The topics discussed are usually not something we do or use in our daily routine at work. So, everyone gets to learn more than the usual stuff.
6. Everyone realizes the things that they do not know and starts to seek for more information about it.
7. The organization strengthens its corporate IQ as people share their ideas and knowledge with each other.
8. After a couple of sessions, everyone began appreciating the activity and now looks forward for new things to learn.

When it comes to outsourcing opportunities in the Philippines, one most often calls to mind call centers or customer service. Being an English-speaking country (Philippines is the third largest English-speaking country in the world), it has an edge over call center outsourcing destinations, such as India or even China. The Philippines also boasts of college educated customer service agents who are adept at handling customer complaints and requests.

Next to call center or customer service support, Philippines has also made a considerable progress in the medical transcription business. On top of the labor force’s ability to speak and write in English, it has a surplus of workers with degrees in the medical field, such as nursing, pharmacy, and medical technology, thanks to the growing trend of exporting medical workers to developed countries, such as the US, UK, and the Middle East.

Software Development Outsourcing to the Philippines

Is Philippines in a good position to take a cut in the technology outsourcing pie? Fortunately, the answer is yes, according to analysts.

While still trailing behind India and China, the country “is already emerging as a strong player in this rapidly evolving industry, demonstrating that it can compete with India and other low-wage destinations in creating value,” according to a 2005 report by the McKinsey Global Institute (MGI). Case in point: While Philippines’ population is 16 times smaller than China, it produces twice as many engineers, according to MGI.

In 2007, the Philippines captured USD 4.1 billion or 1.4% of the global outsourcing market share. According to a Reuters report, diversifying outsourced opportunities beyond call centers will earn the country up to $12.2 billion by 2010.

Opportunities Despite Tech Spending Crunch

Because of the global economic crunch, cuts in IT spending are inevitable. The upside of belt-tightening measures is off-shoring of technology jobs. Of course, the downside could be that the growth of off-shored tech opportunities may not be as high as it was projected in the past years. Still, opportunities abound for outsourcing destinations, such as the Philippines.

Filipino engineers and generalist tech workers have become attractive to foreign companies. “Poaching” of tech workers by other Southeast Asian countries has been observed over the past 3 years, thanks to their technical and communication skills. This temporary diaspora of Filipino tech workers offers better earning opportunities to the workers themselves, but on a larger and more important scale, world-class training experiences that they can bring back home.

If the tech industry can supply ample technical and managerial training to its workers, the Philippines can become a more attractive outsourcing destination for technical development. The country should not rest on its call center laurels alone.

Why develop Java applications on Mac? Well, why not? Aside from the coolness factor, here are some business and technical reasons to do so.

• Macbooks are faster and more stable than any other Vista machine.
• Macbooks can run multiple OS - Linux, Windows and Leopard. With VMWare or Parallels, you can even run Windows within your Mac environment.
• You have a better brand than any other outsoucing or software development company. Imagine sending 5 consultants to your clients each carrying a Macbook.
• They have the tools needed for Java development - including Eclipse, MySQL, Xcode and any other Java IDE.
• The graphics interface is inspiring. Who says developers don’t need inspiration?
• Prices of software (e.g. iWorks, etc.) is cheaper than its Microsoft counterparts. Besides, most of the tools are open source.
• Prices of Macbooks are competitive if not cheaper than other laptop brands.
• It’s secure… it’s built on top of BSD.
• Did I mention NO virus?
• The coolness and intuitiveness of Time Machine encourages data backup. The video below is available now in Leopard and it works!

Mac OS X Leopard - Time Machine

Today, we attended the Sun Tech Days Conference at the Makati Shangrila. Aside from the great food and freebies, I enjoyed the whole experience. There were several things I learned during the second day of the 3-day conference. Here’s to recap what I learned and observed:

• Java 6 has some nice features including Scripting Language Support (JSR 223) and Web Service Integration. I agree that these 2 features are very common and should be part of the standard Java. I’m not sure about JDBC 4.0; with the success of JPA, JDBC might not be that useful anymore.
• Grails is cool, but not necessarily great. I think it still needs improvement to be able to compete in the enterprise, if at all possible. My main concern with template codes is “customizability”. But it’s still cool.
• Sun admitted their problems with Java 6, such as slow start-up and large codebase. I think this is a good sign for the future of Java.
• Netbeans has improved since I switched to Eclipse three years ago. It supports a ton of platforms/frameworks and has a lot of productivity tools. I believe Netbeans is probably worth revisiting.
• Half of the conference attendees are going to the Enterprise track, which means there is more demand for web applications development rather than desktop (Swing, SWT) or system administration.
• The “new” technologies that the speakers discussed were the same technologies two years ago. We have been already using these technologies (such as Ajaz, JPA, and ESB) in our projects. Either Sun didn’t do a good job in looking for resource persons, or Ideyatech is just updated with the latest technology! (The latter is most probably true… hehe) Anything else new?
• Open-source is confusing - everyone else wanted to be the best platform/framework, and developers are confused which one to use. Even Sun promotes several conflicting/competing technologies - Seam vs. Grails vs. JSF, JDBC vs. JPA, GlassFish vs. JWS. With the myriad of platforms available, which one works best?

I left Manila to see if there was a market for my SMS appliance product. I had to take a job so I can stay and have time to study the market. After working in Singapore for 2 1/2 years, I finally realized that it was the right time to go home. I still have this feeling of competing in the global scene and make my country proud so I looked for opportunities to come back. On the course of doing this, I met Allan, President and CEO of Ideyatech. When we first met, I just told him about my SMS appliance product, on how he can integrate it to Ideyatech’s existing applications.

After maybe 4 months, Allan told me that he needed someone who can help him with one of his big projects. I can’t remember how he came up asking me if I could help. After a few conversations about what needs to be done and how hard it is to look for senior guys in Manila, I expressed my intent of thinking about the offer. Since I was also considering of going back and do business, I thought about it. It took me maybe a month to decide.

I arrived with my bags packed in the Centennial Airport(NAIA Terminal 2) on May 21, 2008. Eager to meet my new team, I went to work the following day. It’s nice to be back, I told myself.

Let me share a photo of our team in our board room which I took. This is the team that will lead us to success and grow the company. Who knows we might be the next Google!

Time for some fun! Here is a pic taken during our bowl and dine activity.

Highest scorers were Philip and Beth garnering scores of 146 and 135, respectively.

Today, Jaycobb and I attended the Google Techtalk at AIM Conference Center. Like Jaycobb said, “it’s good to know that Google employees are human after all - and not androids”. Sure it was fun meeting Jay and Franklin, Google engineers from MountainView, but what catches my attention is that these 2 guys are Pinoys and they spent their “20% time” to fly here and share their Google experience - quite encouraging… this shows that Filipinos can really make it to world’s best. I hope they come back more often and share knowledge with us. I’m sure there are lots of local talents that are just waiting to be discovered - like us [ideyatech] and what we’re doing in the open-source area.

They talked about Google Gadgets, Summer of Codes, OpenSocial and Android, certainly lots of cool activities going on at Google. One insight I had from the talk is that “gadgets can be used to promote contents and to increase traffic”. Certainly worthwhile to do a couple of gadgets for our existing projects.

Here’s another picture taken during the chitchat after the seminar, from left: Franklin, Hans (syndeomedia), me and Jay.

BTW, thanks for Hans for pulling some strings to get us into the seminar.