I wish to clarify the government's strategy as it relates to the 'export oriented' segment of the Information Communication Technology (ICT) industry and the steps being taken to attract investment in this sector.

For the purposes of clarification, the call centre industry should be classified as 'IT enabled services' and not 'IT' meaning the technology enables and facilitates the services offered.

In the diagram below 'IT enabled services' would refer to the activities under Business Process and Customer Contact Outsourcing, while 'IT' would refer to those activities under Information Technology Outsourcing.

The more substantive point is the strategy being employed by the government to attract investment in this sector. It is important to outline why the government has decided to focus on these areas.

THE MARKET OPPORTUNITY

A number of recent studies undertaken by management consulting firms Deloitte & Touche (June 2003) and A.T. Kearney (May 2003) point to the growing practice of many US companies, particularly financial institutions, outsourcing their business processes to lower cost developing countries.

The main findings from the Deloitte study are:

Competitive pressures are encouraging financial institutions to send work offshore. A Deloitte study found one-third of the globe's major financial institutions are already utilising offshore outsourcing with 75 per cent reporting they will be doing so in the next 24 months.

IT processes are going offshore first. But BPO processes will soon follow.

India is currently the bank office of the world. But banks don't want all their processes in one location and are sending work to secondary locations, too.

Respondents said cost savings averaged 39 per cent. But some enjoyed savings over 50 per cent. Deloitte forecasts that $356 billion worth of transactions will shift offshore over the next five years.

The A.T. Kearney study indicates "United States financial services firms are planning to relocate more than 500,000 jobs overseas ­ more than eight per cent of their workforce ­ over the next five years. Nine out of ten respondents cited cost reduction as a reason for moving jobs overseas. Other reasons cited were improved productivity, enhanced service, increased capacity and expanded skills."

WHY JAMAICA?

For US companies, who are the major clients for outsourcing, the Caribbean is the closest near shore location that offers comparable benefits to places like India. Jamaica is the leader in the Caribbean for the following reasons:

Opportunity to achieve significant cost savings while maintaining quality

Large pool of English speaking,
educated work force

Well developed telecommunication infrastructure and a liberalised sector

Presence of well-known global players

Ease of access from most major US cities

INFORMATION TECHNOLOGY OUTSOURCING

The government has focused on developing our human resource capacity to compete in this segment of the industry. Examples of this are:

The Caribbean Institute of Technology (CIT) established in 1999 and which offers an 11-month course of study to teach graduates the concepts and skills required for a career in software development. The CIT programme which started in Montego Bay has been franchised to a number of local institutions and has graduated to date over 500 software developers.

The CISCO Regional Academy established in 2002 and which offers the CISCO Certified Network Associate (CCNA) programme. This initiative will create a critical mass of technicians who can design, build and maintain computer networks.

There are a number of Jamaican companies operating in this segment of the industry that compete successfully on a global basis. These include MC Systems Ltd which has been the recipient of a number of Microsoft Awards for its locally developed software; Advanced Digital Services, whose insurance solutions and outsourcing services are demanded globally and Indusa Global, which has provided offshore software development services to a number of North American clients.

To increase the number of jobs in this segment the government will continue to invest in our human resource capability to (a) attract inward investment and (b) provide Jamaicans with the skills and expertise to develop IT solutions for the export market. It should be noted that while there are significant opportunities for further growth in IT outsourcing, it will not provide the same number of jobs as business process nor customer contact outsourcing. For example in offshore software development, Jamaica does not have the critical mass of developers nor the price competitiveness to attract large scale software development. The real opportunity is in the development of local software solutions for export.

CUSTOMER CONTACT OUTSOURCING

This is the segment that has attracted greatest attention and provides the most significant opportunities for job creation. Despite the much-publicised shortcomings, Jamaica continues to attract investment in this segment.

The strategy for further development of this segment involves focusing on human resource development through training programmes and the construction of office space suitable for contact centre businesses. This segment can be classified into three main categories:

inbound customer service support (technical help desk/web chat/email response)

collections

outbound telemarketing

Some of the players include:

e-Services Group/Sitel Caribbean (www.e-servicesgroup. com) which provides inbound customer service for major US corporations.

West Corporation (www.west. com) the number one ranked outbound call centre in the US.

Alliance One Incorporated (www.allianceoneinc.com) a leader in receivables management business.

National Asset Recovery Services (www.narsnet.com) a new entrant to Jamaica that is also in the receivables management business.

Westcom Jamaica Ltd (www.westcomjamaica.com) a local company based in Savanna-la-Mar that provides both inbound and outbound services.

VistaPrint (www.vistaprint.com) another new entrant that provides email response and web chat services.

BUSINESS PROCESS OUTSOURCING

This segment which traditionally focused on data entry and conversion is evolving into much higher value added activities and includes finance and accounting, human resource and supply chain outsourcing. It provides a link into professional services outsourcing and an opportunity for highly skilled Jamaicans to gain employment.

The strategy involves continued development of our human resource capability and the targeting of global companies in this segment.

Jamaica has managed to attract some of the global leaders in this industry.

ACS (www.acs-inc.com) ­ Affiliated Computer Services, a Fortune 500 company is a premier provider of diversified business process and information technology outsourcing solutions to commercial and government clients worldwide. ACS operates in over 100 countries worldwide and had revenues of approximately US$4 billion.

Healthaxis (www.healthaxis.com) ­ is a technology and business process services firm committed to providing innovative and configurable Web-based connectivity and applications solutions for health benefit distribution and administration. It operates in Jamaica under the name Satellite Imaging Systems (SIS).

CONCLUSION

The government is committed to establishing and developing capabilities from the low to the high end in ICT services.

There is significant investment taking place in the sector by well-known global companies.

There are numerous success stories of Jamaican companies excelling in the ICT industry on a global basis.

The sector continues to provide significant opportunities for economic growth and job creation.

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