The City of Dagupan as an ICT-BPM Destination
To position itself as a major ICT-BPM player in the Philippines is no longer an option for the City of Dagupan; it has become an imperative to elevate itself as much, and maximize the opportunities that it will be given. At the same time, the City and its leaders must collectively face, address, and overcome the challenges that are still looming in order to become one of the major ICT-BPM hubs in the Philippines.
The imperative exists because, as mentioned in the introduction, government bodies and private organizations like the IT-BPAP (IT-Business Processing Association of the Philippines) have recognized Dagupan as a Next-Wave City. This means that it has the potential to birth, nurture, and sustain the growth of IT-BPM hubs fueled by foreign investors and multi-nationals, with a majority of its manpower, especially full-time employees, assumed by the local workforce. The Philippines stands to capture billions of dollars in revenues from the global outsourcing market, and the City of Dagupan, known for its bangus exports, must develop its talent, infrastructure, and other support systems to export, in a sense, business processing outsourcing services to the countries that need them.
The challenges posed by the evolving global landscape, as detailed in the previous part of this roadmap, must be weighed vis-a -vis the City of Dagupan’s capacity to respond to them. We must take an objective, critical, and yet constructive look at the strengths and weaknesses of the city. We must study the capabilities and core competencies which we can leverage on and build for the long run. At the same time, we must also take a ruthlessly honest and pragmatic look at the aspects of our City that must be improved on, restructured, and if necessary undergo a total overhaul if we are to become competitive for the long haul.
The global outsourcing market does present a lot of rewards for companies, organizations, and the leaders—but it remains for those who are courageous enough to effect change where it is needed in order to seize the opportunities being presented. Global competitiveness is rigorous, unrelenting, and sometimes merciless in its quest for those who will continually deliver excellence. The Philippines and her workforce found in various cities have risen to the challenge, and have successfully maintained the leadership position. Regardless of the challenges it may confront, Dagupan City, like her counterparts in other parts of the archipelago, can do no less.
Indeed, it has all the potentials to rise to the top of the line of the Next-Wave Cities in a few years’ time.
The next part, the COGNITIVE Location Assessment Model, will determine and measure the capabilities of Dagupan in the following areas which are prerequisites to its fulfilling its mandate and potentials as a Next-Wave City:
The cost of doing operations in the City (COST). Can the total amount of expenses for setting up an IT-BPM hub in Dagupan City be recovered by the revenues that will eventually come in? What is the volume of the profit margin? Can the earnings incurred by the IT-BPM hubs increase over time and overwhelm the costs of doing business in the city? How long before return of investments happen? Will profits always exceed expenses?
IT-BPM inventory (OUTSOURCING PRESENCE). The initial list of IT-BPM companies that have set up shop can be a fair indicator of the success of the others that will follow in its path. How huge are these sites? Who are their investors and foreign owners? What services do they provide? HowÂ many employees do they manage? How fast have they grown? How were they able to sustain their business? Are they getting more clients overseas? Can we expect them to survive and thrive not just in the foreseeable future, but in the next decade?
Good governance and government Support through the LGU’s (GOVERNMENT SUPPORT). Government support and good, efficient, and honest governance are both critical to the success and sustainability of the IT-BPM’s. This roadmap will assess the kind of support that the local government units (LGU’s) and other affiliated organizations have given, and are willing to continue to provide, the IT-BPM companies. The nature of said support will also be studied: are there tax incentives? discounted prices on property and other infrastructure? facilitation of interaction with schools and other educational institutions? an open-door partnership that will always be cognizant of the needs of the IT-BPM companies?
NETWORK AVAILABILITY. The cornerstone of any IT-BPM location would be the availability of a solid, reliable network infrastructure. Inasmuch as there are only a limited number of providers in the Philippines, it is imperative that their presence and capacity is determined.
INVESTOR EXPERIENCE. Assessing the experience of the IT-BPM players already in place automatically means taking into consideration the experience of their investors. Their feedback can give us an idea of what their future colleagues find both enticing and discouraging in Dagupan City. Where do they give us high marks? Where do they feel lack of support? Which of the city’s strengths are crucial to their business sustainability? Which of the city’s weaknesses cripple their potentials for growth? What’s their wish list if they are to ride their current momentum and take their hubs and offices to higher levels of productivity and profitability, both of which will impact Dagupan City positively?
The talent landscape (TALENT). Talent is the main driver that fuels an IT-BPM site. The lack of it in a region and/or the inability to hire needed talent to deliver the required services can spell the slowdown or death of IT-BPM progress in that location. On the other hand, an abundance of a continuing supply of talent, skilled and open to more training and learning, is an asset that can draw in more investors and their customers. As far as the talent pool is concerned, how plentiful is Dagupan City’s? How literate and skilled are they? Which services have they shown themselves to be competent? Which services have they proven themselves to be consistently excellent? These are questions that will allow us to hone in on Dagupan City’s differentiator when it comes to skilled manpower—and with it, the potential importance of the City to locators and investors.
INFRASTRUCTURE. Talent may be available, but infrastructure is equally vital to guarantee sustainability and growth: competent telecommunications and internet services, uninterrupted flow of power and water, extensive and habitable property, strong capabilities for construction and building, food and retail, and transportation that is available during the off-hours especially the midnight shift. We must study Dagupan City’s current capabilities as far as these are concerned.
VALUE PROPOSITION. All the Next-Wave Cities and other future regions that can be deemed compatible for IT-BPM growth do share similar aspects that have made them suitable launching pads for the industry. Frequent and common examples would be talent and telecommunications. However, each Next-Wave City has its own uniqueness that enhances its appeal to foreign locators. Dagupan City’s own specific attractive features must be studied and highlighted if it is to position and market itself as an IT-BPM player with its own identity offering something of extra value to its investors and customers. It cannot simply be another IT-BPM hub or a note on the list of the Next-Wave Cities. It must be able to provide something that is not usually found in the other IT-BPM regions, which will in turn increase its worth and value and probably mark it as indispensable in this digital age marked by fierce competition.
Growing an IT-BPM Hub in Dagupan City (ENVIRONMENT). A study of the above aspects will then be able to give our potential locators an accurate and hopefully predominantly positive future of the requirements needed to make their IT-BPM hubs succeed in Dagupan City. It will function like a mini-road map in the larger one that is this document. It will become an encouragement and a guideline on how they can take part in the growth of the next major IT-BPM hub in the Philippines, while reaping the rewards.
ASSESSING DAGUPAN CITY The COGNITIVE Location Assessment Model
Here are the findings on the capabilities and areas of improvement of Dagupan City as an IT-BPM hub, as based on the above aspects which compose the COGNITIVE Location Assessment Model.
The cost of doing operations in Dagupan City (Cost). One attraction of Dagupan City to locators and investors is the relatively low cost of doing business, which are significantly more reasonable when compared to other more populated cities like the National Capital Region or even Cebu City. Real estate, local taxes, transportation, and utilities cost less than half of that being spent in those other cities. Minimum wage for an entry-level employee ranges from P205 to P253 pesos a day.
Electricity costs P7.59/kwh while water is billed at P19.23/cu m. A liter of gasoline costs P42. Dagupan City was ranked #2 in the Cost of Doing Business Category by the Cities and Municipalities Competitive Index in April of 2015.
IT-BPM inventory (Outsourcing Presence). Locators that have set up shop in Dagupan City established themselves only a few years ago with one site. Voice and contact service still dominate, with a few providing back-office services in technical, engineering, accounting and auditing. A majority of the clients are based in the U.S.and other Asian Geographies. To date, there are around 12 IT-BPM’s in Dagupan City, an ideal number for satisfied companies whose success stories in the outsourcing industry can attract more of their colleagues. These IT-BPM’s currently found in Dagupan City are as follows: Akamai Call Center, Dynamic Concepts BPO, ETS PH Communications, Farmout,Bitstop Network Solutions,Intersys Call Center, Kirtan Communications, L.A. Daroya Business Services, Linked Outsourcing Services, Network and Internet Solutions, and PIXELHUB and R’Liem Communication Services.
Good governance and government support through the LGU’s (Government Support). Locators look for tax incentives and other additional schemes applied by local government units to encourage and
enhance investor activity. Local legislation that creates a business-friendly environment is also welcome. Major industries and their corporations, and not just those belonging to the IT-BPM sector, have noted Dagupan City’s business-friendly environment, which is strongly supported by activities and incentives created by the local government units. They have cited its speedy processing of permits, the enforcement of peace and order, and integrity in the systems (or the lack of graft and corruption) as conducive for doing business . The Dagupan Investment Incentive Board, created specifically to court investors for the tourism and business sectors, regularly communicates with its shareholders to address their concerns. The board has been widely acclaimed for its fast response time that cuts through red tape to expedite critical business processes.
Two new programs were recently put in place to develop property for business owners: Comprehensive Land Use Plan (CLUP) and a Comprehensive Zoning Ordinance. Dagupan City’s business-friendly environment has catapulted it to the 19th place of the Philippines’ most competitive cities, from its #44 position three years ago. Two ICT councils also support the development and growth of ICT-BPM’s in Dagupan City. The LGU is also the driving force in establishing and creating this roadmap.
Network Availability. The two major providers of telecommunication services are present in the city of Dagupan. In the course of our research, the strong presence of the Philippine Long-Distance Telephone Company (PLDT) which provides data, voice, and other cellular-related services to the companies in the Northern Luzon area, including Dagupan City, is a good selling point for the IT-BPM Industry. Data centers and IT-BPM’s in particular have benefitted from PLDT services, with operational capacity at 99% with very little or practically non-existent downtime. The presence of a fiber optic network is also a welcome addition to Dagupan’s arsenal to cater to IT-BPM opportunities.
Investor Experience. Locators and other foreign companies that have established their businesses in Dagupan City speak highly of the local government support, the availability of talent, the friendliness of the populace and their eagerness for IT-BPM’s to succeed, and the relatively low cost of doing business. They also noted that infrastructure has to be improved, business continuity has to be guaranteed especially in the light of climate change, and that more efforts can be made to boost the quality of computer hardware and software, which are vital to the growth of the ICT-BPM sector.
The Talent Landscape (Talent). As mentioned in the earlier part of this roadmap, the key that opened Dagupan City’s entry into the Next-Wave Cities list was the high quality of talent that could be found in the workforce, and which are nurtured by the academic institutions. The English-fluency skills of the people of Dagupan City have made call centers boom in the region. Following a close second are their expertise in accounting and engineering. Many of the Dagupan young workforce are also looking to expand their wings and establish themselves in careers beyond the traditional fishing industry. Their foreign managers have spoken of their diligence, willingness to learn, resourcefulness, adaptability, and the customer-service attitude that seems to be ingrained in all Filipinos from birth.
Three universities, 14 colleges, and 18 technical-vocational institutions infuse 7,500 graduates into the workforce every single year. These include the following: Asiacareer College Foundation, Aie College Dagupan Campus, AMA Computer College Dagupan Campus, Colegio de Dagupan, Dagupan Colleges Foundation, Escuela de Nuestra Senora de La Salette, Kingfisher School of Business and Finance, Lyceum-Northwestern University, Pangasinan Merchant Marine Academy, Pimsat Colleges, STI College Dagupan Campus, University of Luzon, University of Pangasinan, and the British College International.
It must be noted that Dagupan City’s educational wealth is part of its shared legacy with the Ilocos regions to which it belongs. The North has always prided itself on its educational quality and rightfully so. A Higher Education Study made in 2013 has noted that almost 160,000 students graduate from the Ilocos Region’s schools and higher educational institutions every single year. This places it higher than other regions courting IT-BPM hubs like Bicol and Davao.
ILOCOS REGION ACADEMIC INSTITUTIONS
The Ilocanos’ love for education can also be seen in the number of students and working professionals who enroll in a graduate programs. The Ilocos Regions #3 among all regions in the Philippines when it comes to graduate program enrollees, and #5 when it comes to those who did enroll and finish their graduate studies.
ENROLLEES OF MASTERS PROGRAM PER REGION
GRADUATES OF MASTER’S PROGRAMS
Infrastructure. The need to develop and improve on infrastructure is one urgent request that commonly comes up among locators and businessmen from other industries. While rates of power and water remain low, water wells and other sources of the precious liquid that are sent to Dagupan City are of very poor quality and would need some serious restructuring. Roads have to be built and/or repaired, and made into one convergent roadway that would make travel time even faster. The most important concern to ICT-BPM companies is the absence of a Philippine Economic Zone Park (PEZA) which can effectively house and set apart all ICT-BPM hubs in the region. Such a park would also augur to prospective locators that within Dagupan City exists an extensive piece of urban space with secure, state-of-the-art facilities where they can safely build their business and shepherd them into prosperity while their people can live and work in safety.
Environment. Dagupan’s business-friendly environment, its facilities, location, and people have made it attractive to investors, especially Multi-National Companies, who are looking for viable places where they can invest their resources and grow their business for the foreseeable, extensive future. What it offers must be seen in regards to its neighboring cities and within the socio-economic context of the Philippines as a preferred outsourcing destination for global locators.
First, while talent is plentiful and abundant, it is also cost-effective. Dagupan’s new graduates and the other members of its workforce are as talented, skilled, literate, English-fluent, productive, and as resilient as their counterparts in other Filipino cities. One can even argue that they are more industrious and more cost-conscious than most, which are traits that have been ascribed to the people in the Northern region of Ilocos where Dagupan City is found. At the same time, this talent quality which can be groomed, nurtured, and developed, is not as expensive as those found in the National Capital Region. The minimum daily wage of P253 paid an entry-level employee in Dagupan City is just half of the minimum daily wage of the maximum P491 per-day pay of the same entry-level employees who work in Metro Manila.
Second, Dagupan City ranks among the Top 20 Component Cities in the Philippines, which are deemed desirable and preferable by investors and businessmen, local and international, for the following reasons: economic dynamism, government infrastructure, and operational or business efficiency. Out of 110 Component Cities in the archipelago, Dagupan City is #15. Given the dedication of its local government and private sector alike to harness its potential, boost industries, and provide employment to the qualified citizenry, it would not be long before it climbs up the chart and surpass the other cities preceding it, like Batangas City, Batangas; Koronadal, South Cotabato, and San Pedro City, Laguna.
Third, the Cities and Municipalities Competitiveness Index of the National Competitiveness Council ranks Dagupan City in the Top 20 bracket in destination qualities that locators and investors are looking for, before deciding to establish their bases in that region.
In each category that is rated from 1 to 100, Dagupan City is perceived to excel or has superior capabilities/services/resources in the following aspects:
- Jobs: Employment is high and unemployment and underemployment rate is low, as qualified members of the workforce are readily able to find jobs that are continuously available because of booming business, entrepreneurial opportunities, and the support of local government. Dagupan City ranks #1.
- Cost of Doing Business: An environment that makes it inviting for businesses and companies to settle in the region as they will find ready support among the public and private sectors. Capital expenditure and operational costs are also kept low because the cost of infrastructure, property, power, utilities, goods, wages, etc. are not as expensive as those found in other cities. Dagupan City ranks #1.
- Presence of Investment Promotions Unit: Private sector and public government alike have established offices that promote and market the city and the region to tourists, locators, retirees, and other persons of interest. The objective is to highlight the assets of the region and encourage those not yet living in it to set up shop, do business, or relocate. Dagupan City ranks #1.
- Availability of Utilities: Power, water, gas, and other essential services are available and plentiful 24 hours a day, seven days a week. Disruptions are rare and even when they occur during circumstances beyond anyone’s control, e.g. storms, they can be addressed immediately and effectively with minimal impact on the population and industries. Dagupan City ranks #1.
- Health: Hospitals, clinics, day-care centers, dental offices both private and public are readily available, with operational infrastructure, to provide health care to the community. The higher the ranking, the greater the chances that both medical services and infrastructure can be made comparable to the major urban areas. Dagupan City ranks #13.
- Capacity of Health Services: Hospitals, clinics, day-care centers, dental offices both private and public can accommodate the patients that are brought to them, never sacrificing in quality or failing in their public duty to provide medical service. Doctors, nurses, dentists, and other medical practitioners are never in wanting. No citizen in that community has to worry about suffering major injury or loss of life simply because no doctor is available. Dagupan City ranks #14.
- Capacity of Schools: Centers of learning in all levels, from elementary to post-graduate, from university to technical-vocational, provide education and training to students with such a quality that graduation or certification of courses from these institutions can help them land employment. Dagupan City ranks #23.
- ATM: Bank transactions done through terminals are available in many parts of the city. This can be helpful especially in the evenings, weekends, and holidays when the regular bank establishments are closed. ATM terminals provide easy access to funds that businessmen might need to use at any given moment, especially in IT-BPM’s where services happen 24/7 and at all odd hours of the night. Dagupan City ranks #35.
- Road Network: The quality of the roads, streets, and highways that link the avenues of the region together, as well as create a functional path between the region and other cities by which people and goods can move without harm or delay. Police presence is also strong enough to guarantee protection, and enough infrastructure and utilities pepper the highway to provide support for the travellers through the form of restaurants, motels, retail stores, public toilets, gas stations, etc. Dagupan City ranks #36.
- Transportation: All modes of public transport are available to bring people, goods, and services to any part of the region. They are also extensive enough to facilitate transport from the region to nearby cities. Public transport encompasses a whole range of services from airborne aircraft, boats and ferries, cabs, jeepneys, tricycles, and motorcycles, to name a few. Dagupan City ranks #38.
- Business Efficiency: Red tape and other bureaucratic maneuvers that tend to slow down productivity are kept to a minimum, if not totally eliminated. Permits and other legal documents are given speedily and punctually so as not to cause loss of time or business opportunity. Utilities and service also run optimally, such as transport and telecom, ensuring business continuity and hindering disruptions that could affect sales or negotiations. Dagupan City ranks #41.
- Compliance to National Directives for LGU: The speed and efficiency by which a region’s local government unit complies with directives from the national government, which in turn makes it align and synergize with the national government’s goal of boosting productivity, economy, and citizen well-being in the region. Dagupan City ranks #42.
- Economic Dynamism or the inherent energy, resources, citizen and community participation, and overall local government commitment to develop and mature the various industries in their region and support the private businesses: Dagupan City ranks #45.
CITIES AND MUNICIPALITIES INDEX
NATIONAL COMPETITIVENESS COUNCIL
Peace and Order. People feel safe and institutions are secure in the knowledge that law and order are upheld, and criminal activity is low and do not actively pose any danger to all concerned. It must be noted that in a study made of the Philippines’ most dynamic cities that have suffered crime and its consequences to a regular and semi-debilitating degree, Dagupan City was NOT included.
Value Proposition. Dagupan City as an IT-BPM destination has distinctions that set it apart and differentiate it from its Philippine counterparts, and these the Dagupan City local government units and private sector must capitalize on.
First, Dagupan City is already well-known. Though far from the congested highways and stressful streets of Metro Manila, it is not an out-of-the-way rural place where foreigners will feel like they are strangers from another planet. Dagupan City’s thriving milkfish and tourism industries have placed it on the radar of global entrepreneurs and investors. Foreign companies and their respective countries that have imported products from Dagupan City or installed their regional offices or sites in it know and recognize that the City has a sterling history when it comes to supporting businesses and industries. Dagupan City and its officials are well aware of what makes businesses succeed globally, and they are familiar with the intricacies of doing business abroad. Dig a little deeper and you might find foreigners who visit the city frequently and have made second homes there, or relocated there altogether to put up businesses with their Filipino spouses, and/or are making ventures for retirement.
Second, LGU’s can capitalize on this track record, history, and global relations to propel Dagupan City as a Next-Wave City and home to IT-BPM’s. The famous milkfishing and agricultural industries do not have to be set aside. Rather, they can be grown and nurtured together, to show what a regional city can offer: industrialization in the 21st century aligned with respected and honoured native practices and industries birthed out of a cultivation, and not a devastation of the environment.
Third, Dagupan City as a regional hub has the necessary distance to make it a haven for locators. Power, utilities, and other elements of infrastructure are present to support business. With that being said, the natural environment that surrounds Dagupan City makes it an ideal place where one can do business as efficiently and superlatively as possible, and yet relax and rejuvenate. Resorts, swimming pools, mountain inns, and more are available within a few hours’ drive. After a long hard day at work, a locator can simply take a dip at the ocean or hike off the mountain trail during the weekend. No arduous preparations for an out-of-town trip are necessary because the places for recharging and rejuvenation are already in Dagupan City, next to their place of work.
Besides, there is something to be said about glimpsing entire mountainous landscapes or taking in the fresh ocean air as you drive to and from work. The environment does make for healthy living because it brings you one step closer to Mother Nature. If the locator wants to indulge in other natural’ kinds of entertainment to take a break from his IT-related work, organic farms and fishing are just a stone’s throw away.
At the same time, this wondrous environment is only a few hours’ drive from the National Capital Region. One does not have to be away from the home office to â€œenjoy Paradise,â€ and relocation to this haven does not make difficult the travel time to business partners and clients in the NCR.
Fourth, this haven of the natural is complemented by the peace, safety and security that is a trademark of Dagupan City. The crime rate is practically non-existent. People can go in and out at all hours of the day without feeling anxious or afraid. This is a boon especially for the call center and IT-BPM workers who do have to take trips within the city at late hours in the evening.
Fifth, the peace and order situation that is enjoyed by the populace in Dagupan City is reflective of the harmonious relationships that the local government units have with each other, and which contribute to the progress of the city and the well-being of its inhabitants. The Dagupan City LGU wants its businesses to flourish and will do what is necessary to support them. Unnecessary red tape is still being trimmed down. The local government offices have opened their doors and their collective ear to listen to the concerns of businesses, their owners, and managers. They coordinate with the private sector, like property developers, to see how they can reduce costs and offer valuable support at realistic prices to out-of-town businessmen and companies who want to do business in Dagupan.
Sixth, Dagupan City has laid the proper foundation for a viable business infrastructure, which will be easy and convenient enough to build on. Telecom is strong and power is consistent. The quality of water can be improved on. Property developers are open to working with other parties to make sure each space is maximized and developed for viable businesses and continuing revenue. In short, the brick-and-mortar-and- IT component that makes a viable business hub does not have to be laid from ground zero. There is a considerable foundation to build on, and it can be done at least cost and at a fast pace.
Seventh, Dagupan City’s talent has and will always be cited for the attraction it holds for IT-BPM locators. The education that is being taught in the entire Region is above quality and stands above the rest of the Philippine cities. The populace is generally literate, hardworking, English-fluent, adaptable, and respectful of foreign culture. There will never be a shortage of talent because of the number of high-quality educational institutions surrounding and within Dagupan City itself. Young talent grows by the year, and these are the ones who are always looking for challenge to better themselves, and opportunities by which they can provide for their families. The IT-BPM hub can certainly provide both.
To summarize, what Unique Value Proposition does Dagupan City offer as a Next-Wave City?
It is a thriving, bustling city that has proven itself to be a builder of industries, yet without falling into the congestion, pollution, and stressful situations that are so prevalent in the other capitals. Its business-friendly local government officials and literate, hardworking, skilled talent make it welcome and encouraging for IT- BPM hubs to grow in the region. This support is supplemented by existing infrastructure that, although can still be improved, still is in a much better condition than those found in other regional cities.
Finally, the proximity to the National Capital Region make Dagupan City a convenient location to locators who have business and or sites in the Capital, and at the same time want to expand to outside of it. The travel time makes workshops, symposia, conferences, business meetings, and recruitment events convenient and easy to coordinate. The resorts, beaches, and other natural wonders in Dagupan City that can be inviting to NCR-based locators and their staff can even come across as more inviting ways to self- rejuvenation precisely because of that distance.
Created for the Dagupan ICT Council, Dagupan, Pangasinan
All Rights Reserved 2016