WTO Symposium on Cross-Border Supply of Services

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WTO Symposium on Cross-Border Supply of
Services The Private Sector Experience 28 April
2005 Ernest L. Cu President CEO
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The Private Sector Experience Table of Contents
Section 1 About SPI Technologies

• Who we are
• What we do
• How we do it

Section 2 Our Experience In Cross-Border Supply
Of Services

• Key opportunities
• Key challenges
• Case study
• Wishlist

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Section 1 - The Private Sector Experience Who we
are

• Founded in 1980 in the Philippines as a data
  entry company. Evolved into one of the leaders in
  the content outsourcing space. IPO in 1991 went
  private in 2004. Owned by TH Lee Putnam Ventures,
  GIC of Singapore and management.
• Provide IT-enabled content transformation,
  structuring and processing solutions which
  enhance the value of enterprise content and
  enable clients to meet their large-scale, complex
  content and data management needs.
• Key markets served - Publishing, Legal,
  Healthcare, Financial Services and Retail.
  Focused on the US markets.
• Over 150 clients worldwide - Fortune 1000
  companies, leading non-profit organizations,
  institutions and government agencies.
• Five years of double-digit revenue and profit
  growth 2004 revenues and profits were 53
  million and 13 million respectively.

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Section 1 - The Private Sector Experience What we
do

• Content Editorial and Production
• Deep domain expertise in providing content
  transformation services such as content
  enrichment (e.g. copyediting and layout), content
  conversion, content structuring (e.g. abstracting
  and indexing), and content delivery across
  multiple data and delivery formats.
• Transaction Processing
• Focus on providing large-scale, high-quality
  rules-based data entry transaction processing
  services.
• Content Coding and Electronic Data Discovery
• Acknowledged as the leader in conventional
  coding and online coding services. Provide also
  large-scale electronic data discovery services.
• Medical Transcription
• Offer a unique onshore/offshore medical
  transcription solution that delivers high quality
  and high volume to a number of hospitals and
  clinics.

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Section 1 - The Private Sector Experience How we
do it

• Multi-country operating model offering
  significant cost advantages, risk mitigation,
  enhanced scalability and flexibility.
• Scaleable resource pool of 6,500 content
  specialists and support staff in 24 locations
  across the world.
• World-class quality processes ISO 90012000
  BS-7799 CMMi Level 5 and Six Sigma.
• Robust technological and shared services
  infrastructure to support service lines.

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Section 2 - The Private Sector Experience Key
opportunities

• Growth prospects in offshoring across industries
  are very promising. BPO/ITES services are among
  the fastest growing sectors in international
  trade. BPO/ITES offshoring expenditures are
  expected to grow from US 1.3 billion in 2004 to
  US 24 billion in 2007.
• Short-term pain long-term gain. Win-win
  situation for all in the long run through
• Significant cost savings.
• Improvements in quality and productivity.
• Transition to higher-value, core competence work
  in developed countries.
• Employment generation in developing countries.
  Substantial indirect benefits.

Gartner Research
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Section 2 - The Private Sector Experience Key
challenges

• Regulatory environment in importing country.
• Anti-offshoring legislations in various US
  states Ominous precedent being set by government
  bodies and institutions.
• Negative public sentiment towards offshore
  outsourcing.
• Visa issues impact on delivery, service,
  manpower development.
• Offshoring is still in its infancy.
• Industry dynamics are still evolving
  Fly-by-night operators still outnumber legitimate
  players.
• Service and quality standards vary widely.
• Country image perception vs. reality. Brand
  India vs. the rest of the world.
• Managing client expectations.
• Managing intellectual property is a concern.
• Multi-country model is key for scalability and
  growth.
• Negative press about the Philippines.
• Potential shortage of qualified labor.

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Section 2 - The Private Sector Experience Case
study - Publishing

• History (1997-1998)
• Entered the pre-press production market in 1997
  thru the acquisition of a customers pre-press
  operation in Europe. Migrated work to the
  Philippines.
• Single client, single service offering, one unit
  operations in Manila.
• Focus on Scholarly, Scientific, Technical,
  Medical and Educational (SSTM) publishing
  markets.
• Current situation (1999-2005)
• Multiple operations across countries
  Philippines, India, China, Vietnam, Mexico and
  the US 9 delivery centers in Asia 3 project
  management/customer support offices in the US.
• Ability to match skill sets required for the job
  with location uniqueness, e.g. Vietnam and
  Dumaguete Produce over 1 million pages for 550
  journals and 650 books and encyclopedias.
• Over 40 clients commercial publishers and
  not-for-profit publishers.
• Ability to attract work that was never offshored
  high-end copyediting, rights and permissions,
  Science journal (AAAS).

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Section 2 - The Private Sector Experience Case
study - Publishing

• Challenges faced
• Perception that offshore work is inferior.
• Building a robust, scaleable and interconnected
  I.T. platform across countries.
• Managing outsourcing and offshoring biases at all
  levels within client organizations.
• Visa hurdles.
• Free flow of employees between India and
  Philippines is cumbersome.
• Inability to send many employees to the US for
  extended periods of time young workforce
  with majority of employees being single has its
  disadvantages.
• Looking into the future
• Offshoring will become a key competitive
  advantage for those who manage it well.
• Role of government in outsourcing of services
  needs clarity and redefinition.

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Section 2 - The Private Sector Experience Wish
List

• Our wish list
• Make government intervention more fact driven
  rather than sentiment and perception driven.
• Allow market forces to take their course leading
  to win-win scenario for all parties in the long
  run.
• More transparency in the financial and legal
  systems in developing countries.
• Flexibility in visa regulations US, Europe,
  India and ASEAN countries.
• More balanced view of exporting countries like
  the Philippines.

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• Q A