Chapter 3: ICT-enabled Industry

Question 1

This is the contracting of a specific business task, such as payroll, human resources (HR) or accounting, to a third-party service provider.

Answer 1

business process outsourcing (BPO)

Question 2

This is implemented as a cost-saving measure for tasks that a company requires but does not depend upon to maintain their position in the marketplace.

Answer 2

business process outsourcing (BPO)

Question 3

This is one of the most dynamic and fastest growing sectors in the Philippines.

Answer 3

Information Technology - Business Process Outsourcing (IT-BPO) Industry

Question 4

The IT-BPO industry is composed of eight sub-sectors:

Answer 4

1. knowledge process outsourcing
2. back offices
3. animation
4. call centers
5. software development
6. game development
7. engineering design
8. medical transcription

Question 5

What are the 2 BPO setups?

Answer 5

third party outsourcing and captive markets

Question 6

What are the two types of third party outsourcing?

Answer 6

project based outsourcing and dedicated development center

Question 7

This is primarily used for business activities with irregular frequencies or one-off projects. The usual costing method makes use of time and material costs as variable costs and the fixed costs.

Answer 7

project based outsourcing

Question 8

This is primarily used in business cases when there are hanging requirements. In this specific model it could be used for some long-term goals for developing technology or software. This is preferred when resource requirements are lower in the outsourced country than the home country hence developing a comparative advantage.

Answer 8

dedicated development center

Question 9

This is preferred when core or crucial business activities are needed to be run at cheaper costs.

Answer 9

captive market

Question 10

The rationale for employing such a setup is to cater to long term strategic plans involving high managerial control.

Answer 10

captive market

Question 11

What are the 2 major ways of setting up a captive market?

Answer 11

DIY or “Start from Scratch” model and the Build Operate Transfer model

Question 12

The usual flow is for the company to develop all its resources in the new designated area or country of operations.

Answer 12

start from scratch model

Question 13

This is preferred by the companies that have high levels of market knowledge and analytics.

Answer 13

start from scratch model

Question 14

The practice is to contact a 3rd party vendor in order to develop a contract in which the vendor is the one who develops the property, sources the employees and manages the BPO center for the first designated period or amount of time.

Answer 14

build operate transfer model

Question 15

This is preferred by companies that do not have any specialized expertise in the new country of operations hence needing a local partner or vendor to assist with market entry strategies.

Answer 15

build operate transfer model

Question 16

What are the trends in the industry?

Answer 16

1. better information security
2. strategic balanced-shore outsourcing
3. blooming blogging and social media outsourcing
4. popularity of cloud-based software

Question 17

What are the issues concerning the ICT-enabled industry in the Philippines?

Answer 17

1. health issues
2. political issues
3. economic issues

Question 18

Give some examples of the health issues surrounding the industry.

Answer 18

• Employees experience back and shoulder pains, due to the workstation setups and monitor levels
• Several have complained about experiencing throat irritations due to dealing with multiple calls a day coupled with a high stress work environment
• Concerns regarding the employees’ hearing being damaged due to most of these workers being exposed to higher noise levels.

Question 19

Give some examples of the political issues surrounding the industry.

Answer 19

• Revision of Republic Act 7916 to include floors in buildings where BPO companies operates to be considered as special economic zones, exempting the companies from national and local taxes and only having to pay 5% of their gross income as tax.
• Approval of RA 7916, the establishment of the Philippine Economic Zone Authority (PEZA) which considered IT Parks as special economic zones, encouraged foreign investment in the industry by providing subsidies for infrastructure development and tax exemptions.

Question 20

Give some examples of the economic issues surrounding the industry.

Answer 20

• The BPO industry is the fastest growing sector in the country and is expected to overtake OFW remittances in 2017
• The growth in the BPO industry has barely trickled down to most of the Philippine population
• The development of the country mainly because of the high unemployment and underemployment rates; the BPO industry was the fastest growing sector from 2005-2012 but only took in 1% of the labor force

Question 21

This is defined as those companies, which together enable the provision of telecommunication, information and entertainment services including voice, internet, SMS, text and other data services.

Answer 21

mobile-based service industry

Question 22

What are some examples of mobile-based services?

Answer 22

• Mobile banking,
• economic development,
• delivery of health services,
• citizen empowerment and;
• greater access to media and education

Question 23

This is envisioned to create “a digitally empowered and integrated government that provides responsive and transparent online citizen-centered services for a globally competitive Filipino nation.”

Answer 23

E-Government (in the Philippines)

Question 24

This includes the efficient delivery of public services

Answer 24

e-services / e-government (citizens)

Question 25

This places a premium on value-added, shared services, interoperability and the maximization of public resources

Answer 25

e-services / e-government (government)

Question 26

These provides spaces for participation and fosters synergy in governance.

Answer 26

e-services / e-government (Civil
Society Organizations)

Question 27

They identify policy and advocacy areas that need to be addressed in creating an environment necessary for fostering an integrated, interoperable and harmonized system of e-Governance.

Answer 27

e-services / e-government (policy makers)