Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Typhoon Unlikely to Have Long-Term Impact on Philippines Outsourcing Industry

Stephanie Overby | Nov. 25, 2013
Philippines outsourcing hub Cebu, closest to the path of the storm, did not take a direct hit. However, a lack of public statements from industry groups and providers reveals industry immaturity.

"This is a sign of immature approach to the current realities of this world of information, social media, et cetera," says Karamouzis, who said officials at the BPAP indicated to her that they don't feel the storm will have a long-term impact on the industry.

However, there may also be a number of small players scattered around the islands that were impacted by the typhoon, says Durant. The largest providers tend to have robust disaster recovery and business continuity processes. "They have had the capital to invest plus they have alternate locations to offload work," says Karamouzis.

"Precautions with respect to elevation, power, communications can all be taken. The issue, however, is that employees who are a part of the servicing organization are impacted." -- Jerry Durant, Partner with outsourcing consultancy NeoGroup

"It's a low frequency issue so most clients take the risk. However, once it hits, it's difficult to come up with options in the short term."

Indeed, the outsourcing industry in the Philippines was, more than anything, lucky in avoiding the impact of the unprecedented and catastrophic storm.

Can't Prepare for This Magnitude of Disaster

"Even with the best preparation and processes in place, a disaster of this magnitude is an entirely different beast. You can't be prepared for this order of magnitude," says Durant.

"Precautions with respect to elevation, power, communications can all be taken. The issue, however, is that employees who are a part of the servicing organization are impacted. Unless they live at the workplace they are all at risk of peril," says Durant. In terms of facilities, even concrete structures in the path of the typhoon were destroyed.

And while the industry and its major players have been spared, the typhoon will increase the focus of outsourcing customers and providers on location monitoring, says Durant. "Many of the regulators have started to pay attention to this too in the U.S."

It also sheds a light on the importance of the government's role in business relationships, as the Philippines government's response has been criticized.

"This highlights the importance of considering the effectiveness of the government in a region under consideration as a sourcing location," Durant says. "After all, laws in and of themselves are no good without enforcement. A government's self-commitment is heavily weighed against how corrupt the diversion of funds is taking place."

 

Previous Page  1  2 

Sign up for CIO Asia eNewsletters.