Friday, November 18, 2005


Rational Technology for November 20, 2005

Over dinner with friends last Thursday night, someone brought up the topic of a recent report ranking provinces throughout the Philippines according to livability. The surprise of the evening was that Siquijor was at a fantastically high number three in the rankings while Dumaguete came in the dismal sixties. What was going on?

Now, I don't mean to denigrate Siquijor in any way. If some people find Siquijor a better place to live in than Dumaguete, then a higher ranking might certainly justified. However, if the report places Dumaguete and Siquijor at such a huge variance, then something is terribly wrong.

Unfortunately, no one at dinner had any clue as to what criteria were used to produce such a ranking. We didn't even know whether the report itself was serious or not, so for the moment it remains in the realm of hearsay. If the report was in earnest, I certainly would like to know what the people writing it were smoking, because I want some, too. Happy times, man!

The whole episode brings to mind one of the chapters of Malcolm Gladwell's Blink, which I wrote about in this column some months ago. Gladwell talks about thin slicing, a fancy name for the way people make decisions based on very little data. Gladwell is a little ambiguous as to whether thin slicing is good or not; he simply points out that it is there.

Thin slicing works fairly well at times, most especially when people have the proper prior training relevant to the subject of the decision. A case in point would be soldiers making combat decisions based on gut feel in the absence of complete battlefield information. But thin slicing can also have disastrous results when the factors used as criteria for judgment are taken out of the context of the matter at hand.

So perhaps the people conducting that survey were simply overzealous in applying their narrow criteria that they lost the forest for the trees. In any case, we probably won't hear about it anymore until the headlines of the local papers scream warnings of the decreasing competitiveness of Dumaguete City to our faces.

Interestingly enough, that same night, I received a copy of a white paper from a consulting company called NeoIT. NeoIT publishes reports on the outsourcing and offshoring industry. The particular report I received was entitled "Outsourcing to the Philippines: Metro Manila and Beyond", and it gave potential outsourcers recommendations on where they could take their business.

I might as well give you the bad news now: Dumaguete is the runt of the litter among the different cities surveyed. Yes, that's right, in a destination pool that also includes Metro Manila, Cebu, Davao, Clark, Cagayan de Oro, Iloilo, Bacolod, and Baguio, we come in last.

Unlike they mysterious survey that placed Siquijor on top and Dumaguete way below, NeoIT's report actually had a comprehensive and reasonable set of criteria for making their judgment. They examined four factors and several sub-factors under each. These are:

  • People: size of labor pool, number of tertiary schools, English language proficiency, and labor quality
  • Infrastructure: telecommunications, power, airports, transportation
  • Financial: cost of living, availability and cost of real estate
  • Catalysts: government support and initiatives, presence of similar companies, social and political stability, climate, and key developments catering to the ICT industry

I won't go into the details of the report. Suffice to say, that after the preliminary ranking, NeoIT then proceeds to recommend Metro Manila, Cebu, Davao, and Clark as the places to go to for setting up outsourcing facilities, dismissing the other also-rans. Well...duh!

Should we be discouraged that we rank so low in this survey? Should we be discouraged that we will rank low in other outsourcing surveys? Perhaps all this talk of outsourcing in Dumaguete is just smoke and mirrors purveyed by charlatans like me? I will tell you: no, no, and no. A hundred times no. A million times no.

The fact of the matter is, these consulting companies are probably scratching their heads wondering what Dumaguete is doing in their surveys in the first place. We simply don't fit the profile that conventional wisdom dictates. We have a very small population of 50,000 (and NeoIT was even generous enough to assign us double that number), we don't have an international airport, and we don't have a five-star hotel.

But the fact that we're the anomaly in their lists just means that we're doing something right. We already host SPI Publisher Services. We already host Entheos medical transcription. Soon we will also host a Teletech contact center and an animation company. And believe it or not, there are already a number of small outsourcing companies operating in Dumaguete but below the survey radars. We are doing something right, we're just not doing in the conventional manner that the expert surveys expect.

This is not to say that we are doing everything perfectly. There are so many more things to improve, so many more steps to take. So let's improve on what we can, but all the while move forward to our destination.

With all due respect to consulting companies like NeoIT, I say they are victims of the thin slicing trap and overly conventional thinking. A small city like Dumaguete can never be on the outsourcing map by any conventional means.

So the only way there is by unconventional means. By all means, let's do it. And damn the surveys.