CEBU has climbed from fourth to first this year in the list of 50 emerging outsourcing destinations for global companies this year.

This was according to a research report released last week by industry publication Global Services and investment advisory firm Tholons.

Cebu ranked first after the top three cities in the list last year—Chennai, Hyderabad, and Pune (all in India)—-were elevated to the category of developed global outsourcing cities.

They are now part of the top eight in that category along with Bangalore, India; Delhi NCR, India; Dublin, Ireland; Makati City, Philippines; and Mumbai, India.

Global Services and Tholons highlight in their research the increasing importance of choosing the right city instead of the right country.

“It is rather the city that represents a more accurate package of attributes the service providers seek. Thus, Cebu City and Monterrey matter more than the Philippines and Mexico from a decision-making standpoint,” the study said.

The list is based on the criteria that include scale and quality of workforce, business catalyst, cost, infrastructure, risk profile, and quality of life.
But it does not include developed or established outsourcing locations.

Top cities

According to the list, the other hot cities for outsourcing are Shanghai, China at number two (eighth last year); Beijing, also in China at number three (10th last year); Ho Chi Minh City, Vietnam at number four (sixth last year); and Krakow, Poland at number five (16th last year).

Rounding up the top 10 are Kolkata, India at number six (fifth last year); Cairo, Egypt at number seven (11th last year); Sao Paulo, Brazil at number eight (fifteenth last year); Buenos Aires, Argentina at number nine (14th last year); and Shenzhen at number 10 (13th last year).

Asian cities dominated the top cities list (38 percent).

Baguio City, which was number 36 last year, dropped out of the list while new entrants from the country entered the list, like Quezon City (number 21) and Mandaluyong City (number 45).

Pasig City was number 15.

Avinash Vashistha of Tholons and Imrana Khan of Global Services said local stakeholders need “to address infrastructure and ecosystem concerns in a timelier manner.”

“Many city mayors and local government units, for example, can provide city-specific tax incentives and telecom providers can deploy connectivity in a much more
targeted scale,” they said.

Service providers, they noted, look for resources to capture specific market segments.

They cited the cities in the Philippines as an example since they “continuously provide large English-proficient workforce that can cater to the US customer service market.”

Venue

In a press conference yesterday, Cebu Investment Promotions Center (CIPC) executive director Joel Mari Yu said that Cebu achieved this feat even when it only started moving into information technology (IT) and building contact centers around 2002 to 2003.

He said that Cebu provides a venue for global companies like those in the US to remain competitive and to save money.

Putting up a call center in Cebu with its cheap labor, for example, enables locators to reduce costs by as much as 90 percent compared with putting up one in the US.

With the continuous growth of call centers and non-voiced services, Yu added, the 23,000 local graduates every year have “very little choice” but to join IT and business process outsourcing (BPO)-related jobs.

CIPC records show that Cebu currently has 22 call centers with around 20,000 agents, as well as 36 foreign direct investments in IT or BPO.

Yu said that when Cebu was fourth last year, it helped them promote the city to global companies so that some firms are already planning to expand to Cebu.

He cited technology company Hewlett-Packard (HP); engineering, procurement, construction and maintenance services company Fluor Corp.; global IT firm HCL; and software giant Tata Consultancy Services. - Sun.Star Cebu