Charting Thailand's IT outsourcing future
By Jon Fernquest
The growing popularity of outsourcing
worldwide is one good reason to bone
up on your English language skills. With advanced English skills you might land a job with tremendous upside potential in Thailand's emerging IT outsourcing industry.
The IT consulting firm Gartner issued a report last week ranking the world's top locations for outsourcing work. Out of the 72 countries assessed a "Top 30" were chosen as the best locations.
Thailand ranked in the Top 30. The top 30 locations for offshore services in 2008 were:
| Asia: | China, India, Malaysia, Pakistan, Philippines, Singapore, Thailand, Vietnam |
| Pacific: | Australia, New Zealand |
| South America: | Argentina, Brazil, Canada, Chile, Costa Rica, Mexico, Panama |
| North America: | Canada |
| Europe: | Czech Republic, Hungary, Ireland, Poland, Romania, Russia, Slovakia, Spain, Ukraine |
| Middle East: | Egypt, Israel |
| Africa: | Morocco, South Africa |
outsourcing - hiring
an outside company to do work instead of doing the work with employees
inside the company (sometimes to maintain a more flexible workforce,
sometimes to save money, sometimes to improve quality; usually the work
is not associated with the core business, outsourcing core business
might reveal firm secrets to outsiders, transferring business
or IT processes to an external service provider (See Wikipedia)
charting - making a map, reporting on how something has developed and planning future developments
bone up on - study to become more skilled in a subject
land a job - get a job
tremendous X - very great X
potential - the possibility that something might happen
upside potential - the possibility that it will increase
Gartner - one of the world's leading information technology research and advisory firms (See Wikipedia)
assessed - evaluated, checked and looked at closely to make a judgement about something
charting - making a map, reporting on how something has developed and planning future developments
bone up on - study to become more skilled in a subject
land a job - get a job
tremendous X - very great X
potential - the possibility that something might happen
upside potential - the possibility that it will increase
Gartner - one of the world's leading information technology research and advisory firms (See Wikipedia)
assessed - evaluated, checked and looked at closely to make a judgement about something
(Photo on right above is of outsource call center workers in Vietnam answering calls)
Why outsourcing?
"Outsourcing" is the growing practice of companies hiring an outside company to do work instead of doing the work with employees inside the company.Companies outsource for many reasons: 1. to maintain a more flexible workforce, 2. to save money, and 3. to improve quality.
Outsourcing may reduce jobs within a company but it also creates opportunities for the smaller more specialised companies that do the outsourced work.
Outsourcing does not have to be to another country. Thai companies can outsource to other Thai companies.
Usually the outsourced work is not associated with a company's core business. Outsourcing the core business might reveal company secrets to outsiders and damage the company.
Outsourcing helps a company focus on its core business. Flexibility is another important feature. New markets can be tested quickly and projects ended quickly if they don't pan out. Short-term projects that require specialized skills are often easier with outsourced staff.
Besides English, Japanese and French are also important languages for outsourcing work. Morroco has become a popular location for outsourcing from France because of the country's French skills (Read about an earlier Gartner report on Thai outsourcing opportunities in Japan).
Besides language skills, cultural compatibility, time zone and travel time were other important considerations in choosing an outsource location.
call center - a
special center for answering large numbers of phone calls and helping
callers (by providing information and doing tasks like
reserving a seat on airplane or a room in a hotel) (See Wikipedia)
a facility - a place with special equipment for an activity (for example, athletic facilities)
compatibility - when things go together well
cultural compatibility - when cultures go together well
a time zone - an area of the world sharing the same time (for example, Burma and Thailand have times that are a half an hour different)
focus - think about and work on one thing (rather than waste time on many), concentrate time and attention on one thing
core - the central part, the heart
core business - the most important part of the business (for example, accounting, sales, and transportation is not really part of the core business of a manufacturing business, designing the products and making them is)
pan out - succeed, work out, produces something of value
a facility - a place with special equipment for an activity (for example, athletic facilities)
compatibility - when things go together well
cultural compatibility - when cultures go together well
a time zone - an area of the world sharing the same time (for example, Burma and Thailand have times that are a half an hour different)
focus - think about and work on one thing (rather than waste time on many), concentrate time and attention on one thing
core - the central part, the heart
core business - the most important part of the business (for example, accounting, sales, and transportation is not really part of the core business of a manufacturing business, designing the products and making them is)
pan out - succeed, work out, produces something of value
Building human capital
Thailand already has a large pool of well-educated professionals with a variety of technical skills. Some specific areas still need attention if Thailand's IT outsourcing industry is to grow and thrive:1. Strengthening IT
standards in Thailand. Software companies need to be encouraged to "comply with CMMI standards,
especially levels 3 to 5, to make
Thailand's outsourcing recognised
at a global level."
2. Attracting more global ICT talent to Thailand to enrich the industry and make it more competitive in international markets.
2. Attracting more global ICT talent to Thailand to enrich the industry and make it more competitive in international markets.
human capital - skills
and knowledge that workers have that can be used to produce
economic value (See
Wikipedia)
a pool of Y - a group of Y
thrive - do well and be successful and strong
comply with - follow rules and regulations
CMMI standards - a system for improving the business processes in a company (See Wikipedia)
recognised at a global level - people and companies around the world accept that the standard is high (capable of doing the job well)
ICT - Information and Communications Technologies, the topic of computer-based information systems, particularly software applications and computer hardware (See Wikipedia)
ICT talent - people skilled in ICT
a pool of Y - a group of Y
thrive - do well and be successful and strong
comply with - follow rules and regulations
CMMI standards - a system for improving the business processes in a company (See Wikipedia)
recognised at a global level - people and companies around the world accept that the standard is high (capable of doing the job well)
ICT - Information and Communications Technologies, the topic of computer-based information systems, particularly software applications and computer hardware (See Wikipedia)
ICT talent - people skilled in ICT
More foreign ICT professionals resident in Thailand training would keep Thai ICT professionals updated with knowledge of the latest technologies and also help to improve their English language skills.
Thailand is one of the most cosmopolitan and open countries in Asia but there are still difficult legal barriers to hiring foreign workers that need to be reduced.
Software companies tend to be small companies with a few smart people working for them. Sometimes the workers even own more than the owners because of the value they add to the business. Incentives for investing in Thailand are directed mostly at large companies who are going to spend a lot of money, not small companies that could boost Thailand's human capital and knowledge. The Thai government needs to be proactive in its policies:
The Thai government should
eliminate
obstacles; the Labour Department will not allow service
companies to
get work permits
for foreign ICT professionals. Work permit approvals
are determined by a
company's registered capital. Service companies,
and especially SME's - the sort which would be adding value and
"packaging" technology resources for larger corporate clients - do not
want or need to have a high registered capital...
a professional - having
a job that requires advanced education and training
ICT professionals - people who work with computers and communications qualified with special education
cosmopolitan - a place with people from many different places and cultures (therefore open to new ideas and ways of doing things)
obstacles, barriers, impediments - things that makes it difficult to do something
legal barriers - laws that make it difficult to do something
eliminate - get rid of, remove
eliminate obstacles - remove difficulties
proactive - acting quickly to solve problems even before they happen
work permits - official permission from the government to work in a country
approval - saying "yes" you can do something, getting official permission to do something
company's registered capital - the official initial investment in a company
clients - customers
ICT professionals - people who work with computers and communications qualified with special education
cosmopolitan - a place with people from many different places and cultures (therefore open to new ideas and ways of doing things)
obstacles, barriers, impediments - things that makes it difficult to do something
legal barriers - laws that make it difficult to do something
eliminate - get rid of, remove
eliminate obstacles - remove difficulties
proactive - acting quickly to solve problems even before they happen
work permits - official permission from the government to work in a country
approval - saying "yes" you can do something, getting official permission to do something
company's registered capital - the official initial investment in a company
clients - customers
Countries like India start out with a competitive advantage because of the high standard of their world-class engineering education. Every year top rated graduate engineering programmes like that of Stanford University in the United States (where I studied graudate engineering) are full of recent graduates of the India Institute of Technology (IIT) which ranks among the best engineering schools in the world. As one IT recruiter observes:
"A larger pool of ICT talent
will help
level the playing field
for the many Thai companies which have yet to
reap the competitive
advantages made possible by technology. Even local
start-ups
will have a greater chance of success if there are more ICT
professionals working in Thailand."
India Institute of Technology
(IIT) - a group of 13 engineering schools in
India with a reputation for educational excellence (See Wikipedia)
a pool of talent - a group of skilled people
level the playing field - make things fair for everyone
reap the competitive advantages - use an advantage to gain and do better than the competition
start-ups, start-up companies - new small companies (often focusing on a new and risky business idea)
a pool of talent - a group of skilled people
level the playing field - make things fair for everyone
reap the competitive advantages - use an advantage to gain and do better than the competition
start-ups, start-up companies - new small companies (often focusing on a new and risky business idea)
(Source: Bangkok Post, database, 07-01-09, Thailand enters Gartner's Top 30 off-shore service providers, SUCHIT LEESA-NGUNANSUK, link)
