Tuesday, August 21, 2007

US retail giant's software outsourcing operations in RP


Catanduanes Rep. Joseph Santiago, chairman of the House information and communications technology committee, has cited Pleasanton, California-based Safeway Inc.'s rapidly growing software development outsourcing operations in the Philippines.

"We are pleased to recognize Safeway for its contributions in building up the Philippines as a global software development hub," Rep. Santiago said.

A Fortune 50 company, Safeway is one of America's largest food and drug retailers, operating about 1,750 stores that generated $40.2 billion in sales in 2006.

Its fast-expanding software development operations in Manila are executed by a wholly owned Philippine subsidiary, Safeway Philtech Inc., backed by more than 300 Filipino software engineers and technicians.

Safeway Philtech serves as a back office technology core providing application support and software development based on specifications from the US firm's in-house information technology (IT) division.

To maintain an edge in a fiercely competitive and low-margin industry, Safeway depends heavily on technology. The company runs more than 470 software-based systems that support mission-critical operations, including logistics, distribution, points-of-sale, retail, marketing and back-end support for human resources and accounting.

Santiago said buoyed by the global IT boom, the Philippines' software development industry is expected to produce $1.28 billion (P60.16 billion) in annual revenues and fully engage 75,000 Filipino workers by 2010.

The country's software developers are projected to yield $374 million in export revenues this year, up 38 percent from the $272 million they posted in 2006. Revenues are expected to hit $561 million in 2008; $850 million in 2009; and $1.28 billion by 2010, he said.

The industry employed 16,000 Filipinos at the end of 2006. This is expected to increase to 22,000 by the end of this year; 33,000 in 2008; 50,000 in 2009; and 75,000 by 2010.

Santiago also renewed his call for increased public and private sector support for the training of software developers. He said even college graduates of non-engineering or non-IT-related courses could be cultivated as skilled software technicians.
With global corporations increasingly relying on new technologies to boost productivity, he cited the need for the country to continuously produce a large pool of software developers not only to attract more foreign investments but also to keep domestic industries competitive.

One of the reasons many multinational firms are off-shoring more IT-enabled services to India is because of its thriving software development industry backed by thousands of highly creative engineers, Santiago pointed out.

Software is a program of written coded commands or instructions that tell a computer what tasks to perform, or to do useful work.