The Silicon Valley Model for Cebu

In a meeting sponsored by the Cebu Chamber of Commerce and Industry last October 4, 2005, at the Aboitiz Conference Hall, Bonifacio "Boni" Belen, Executive Director of the Cebu Educational Development Foundation for Information Technology or CEDFIT, presented his concept paper entitled, "Cebu ICT as an Event and a Work-in-Progress".

Note that the Cebu Chamber just finished the CEBU ICT 2005 last June and is now gearing up for the next round of events for 2006. The meeting presided by Clarito "Lito" Fruelda the Vice President for Business Development Division of Cebu Chamber was also attended by Frederick "Fred" Kintanar of NEC, Antonio "Jun" Quintos, Jr. of Lexmark, Lawrence Hughes of InfoWeapons, Robert Macalalad and Jimmy Chua of PLDT, Aimee Tejano of Innove Communications, Felix Cogal of ICAL (Internet Cafes) and yours truly. The meeting was facilitated by Markus Ehmann and Lorenzo Templonuevo of the Small and Medium Enterprise Development for Sustainable Employment Program or SMEDSEP.

Boni Belen presented his paper as a reference for the content and direction of the 2nd ICT Summit intended to be done on March 2006. Boni's position in presenting the paper is that Cebu should move to the next level which is to take the Silicon Valley Model as a reference for a strategic effort to make Cebu an ICT hub.

The presentation was great. Even Lawrence Hughes considered it a good move and Lawrence is speaking from the perspective of a Silicon Valley player himself.

A lot of those in the meeting was a bit worried about the short preparation period recalling how huge the first summit was. Apparently, Boni's confidence lies on the fact that the original team that did most of the "hands-on" work on the summit is still around like himself, Caesar Atienza (now a Consultant of the Cebu Provincial Government), and of course yours truly.

I have my own views of how the Silicon Valley Model can be "cultured" in Cebu but I rather let Boni take you to his encapsulated presentation. I will discuss my views in a separate blog.

Here's the Four Pillars of the Silicon Valley Model:

(The following text are excerpts from the original concept paper presented to the Cebu Chamber of Commerce and Industry last October 4, 2005.)

(Start of Excerpt)

Essential Ingredients for an Honest-to-Goodness ICT Hub

Many books have been written, describing in detail, the "Silicon Valley Model", and how, for instance, Bangalore in less than two decades has been transformed into the "Silicon Valley of Asia". Many countries have likewise consciously and conscientiously used the Silicon Valley Model -- Singapore, Malaysia, Taiwan, South Korea, etc. - in their quest to become an ICT hub. One thing in common among all these countries is that they do stop at the "marketing hype". They work hard to provide the key ingredients necessary for the transformation process to "produce" the reality, and most, if not all of them, are slowly but surely succeeding.

Although authors differ in attributing forms and degrees of importance, the essential ingredients in the Silicon Valley Model revolve around four (4) major components as follows:

The creation of an Innovation Ecosystem (with AsiaTown IT Park)

Innovation is a major driving force behind economic success. Innovation happens within an "ecosystem" that promotes and enables R&D to find its way to the marketplace.

For Cebu to aim at long-term sustainability in ICT, innovation has to be at the heart of the endeavor with our IT Parks (Asia Town, for example) taking center stage in such undertaking.

The promotion of a Culture for Technology Entrepreneurship (with CebuSoft)

Technologists need much encouragement to make the decision to enter into business. Beyond this step, moreover, the "incubation" of their ideas, mentorship from business experts, and partnership form venture capitalists, has to be within "real" reach.

Cebu has the potential of reaping an abundance of technology entrepreneurs within the next decade, but only if we succeed (through CebuSoft, for instance) in "incubating" these people and start-up companies.

The provision of a Critical Mass of Quality Professionals and Practitioners (with CEDF-IT and CCS)

Aspiring to develop technology start-ups necessarily requires that there be a critical mass of competent ICT professionals and practitioners - from engineers, to teachers with postgraduate degrees, to scientists, highly skilled technicians, etc., sustaining the needs of these technology business.

The quantity and quality of such professionals and practitioners currently available, as well as the stream of graduates from Cebu's educational institutions, have to be increased; by sustaining, and making more effective and wider in scope, the interventions already put in motion by CEDF-IT (and the Cebu Computer Society) in the last four years.


The availability of Legal and Financial Framework (with the Provincial IT Council)

Technology venture formation calls for unambiguous Intellectual Property Laws, availability of IP lawyers, accountants and assessors for fair financial valuation, and adequate legal framework for venture capital.

For Cebu to give birth, or lend support, to existing innovation-based companies that have no collateral except for their ideas and intellectual property, it is essential that the legal and financial framework be made definite and available (through the leadership of the Provincial IT Council perhaps).

(End of Excerpt)

By all indications, the direction the Cebu Chamber is taking is still on track in as far as the concept above is concern. The last meeting I had with Boni, Lito, and Caesar at the CEDFIT in AsiaTown IT Park indicates that the 2nd ICT Summit will still be on March 2006.

If you got comments please make them known. Just click the "Comment" link below. We need to hear from as many people as possible. I am helping Boni prepare for the 2nd ICT Summit. The more feedback we get the better we can refine the papers that will be distributed during the Summit.

You'll get my blog on the 4 Pillars of the Silicon Valley Model soon!

I wish you a productive New Year!

DBM's Procurement IRR Meeting Shall Be an Exercise in Albinism Genetics

Last December 28, 2005, Janette Toral of DigitalFilipino sent an email to Michael Jurado, CebuSoft President, the response of the Department of Budget Management or DBM to the CebuSoft position paper sent to the office of Senator Mar Roxas regarding Republic Act No. 9184 otherwise known as the "Government Procurement Reform Act". Incidentally, Janette keeps her ear on the ground about government ICT initiatives through her involvement with the Office of Senator Mar Roxas and other government agencies.

The response of DBM as quoted by Janette is as follows:

"On the concern of the Cebu Software Association on the RA 9184 IRR-A provisions Section 23.11.1 i.e., Eligibility criteria for the procurement of goods requiring "prospective bidders to have experience in undertaking a similar project within the last two years with an amount of at least 50% of the proposed project for the bidding", this issue is pending discussion at the Government Procurement Policy Board (GPPB). We have been informed that this issue on the single largest contract will be included in the agenda for the next GPPB meeting. It appears that the Inter-Agency Technical Working Group (TWG) is considering three (3) options to amend the Implementing Rules and Regulations provisions on the single largest contract in lieu of the existing requirement: a) the prospective bidder should have completed at least three similar contracts and the aggregate contract amounts should be equivalent to at least fifty percent (50%) of the approved budget for the contract of the project to be bid; b) the largest of these similar contracts must be equivalent to at least twenty-five percent (25%) of the project to be bid; and c) the business/company of the prospective bidder willing to participate in the bidding has been in existence and must have a track record of supplying the item or similar item subject of the public bidding at least three (3) consecutive years prior to the advertisement and/or posting of the Invitation to Apply for Eligibility and to Bid (IAEB)."

Earlier, I published a blog, "CebuSoft Takes a Position on Government Procurement Reform Act ", on the position that Michael Jurado of CebuSoft took on RA 9184.

Personally, being in the frontlines of managing government accounts in ICT projects in the past, the issue is really not much the size of the project, the equity of prospective bidders or the value of the bidded project, the issue really is in the manageability of the bidding and project. These are the two areas in the procurement and acquisition in government where there is little precedence in excellence or successful completion. The only consistent track record of government in multi-billion projects anywhere is that huge sums of money will change hand and a new elephant is always born and it is always an Albino!

If this Inter-Agency Technical Working Group (TWG) is truly intent of finishing projects that actually works, they should break up the project into manageable components:

• Bidding Management
• Project Management
• Hardware Configuration and Installation
• Network Configuration and Setup
• Hardware Maintenance
• Software Design, Development and Deployment
• Software Installation and Deployment
• Software Maintenance
• System Integration
• System/Project Documentation
• Network Security
• Data Management and Security
• Migration Services
• Post-Handover Assessment

The reason for breaking the projects up is to take advantage of highly specialized expertise and the best of breed systems, and at the same time provide local players the opportunity to bid for products and services where they excel regardless of their size.

The logic of having different service providers for Bidding Management, Project Management and Post-Handover Assessment is that three distinct expertise and service providers will ensure the project is actually completed according to specification and a system of check-and-balance is built into the management and post-project assessment of the whole project. But the most compelling reason is that nobody in government has both the expertise, integrity and credibility to deliver any of the three almost with absolute certainty. You can bet the whole Philippines' future on that.

Another mechanism to guarantee completion of projects is for large participating bidders with no local presence to have a local partner and select and appoint from among local service providers. The Original Equipment Manufacturer or OEM shall train these local partner to support all the service requirement of the client agency during the project implementation and after the handover. The agency must include a provision or clause in the service contract that such a service provider shall guarantee support even after warranty provisions have expired with a pre-agreed schedule of fees applied for specific services.

The clause must also include that in the event the bidder fails to complete or defaults in the delivery of the project and its post-handover support, it shall allow the local partner to use proprietary mechanisms of support and license this local partner to deliver OEM services and products to the agency which shall be to the account of the winning bidder. In the 1980s to the 1990s, we use to refer to this type of support as a Third Party Support Agreement. It was specifically designed to break the monopoly of OEMs with proprietary technology and to avoid the scenario of government being hostage by a single service provider. It also rationalizes the schedule of fees for after-sales support and maintenance.

I would like to believe that we should give the GPPB the benefit of the doubt but I would be very dishonest. Historically, very few benefit from these types of biddings and I have doubts if ICT biddings will be any different. Like always it will end up with only few large players, it will not be completed according to specification (assuming it ever gets finished and delivered), and almost certainly will not benefit the public nor the agency it is supposed to serve.

ICT projects will be a new wave of GPRA-inspired genetic experiments in creating Albinos from another specie of elephants.

The Choices We Make

They say our future is decided by the choices we make.

My father just like his grandfather chose someone to live his life with and raise a family and the rest is history. Then, there was me, my wife and my kids and what will probably be a whole lifetime of choices.

I chose to marry and have a wife instead of the original path I wanted for myself which is to eliminate a whole generation of bad choices. The choice I made will leave a society today that my children will have to live with. A society bred by a government that is not accountable to anyone and a population of Filipinos still unable to make the government accountable.

Look at the kind of life we have decided for ourselves today. We see law enforcers shooting suspected "car jackers" in cold blood on national television and nobody is shock. We witness and hear a Commission on Election officer lie to his teeth on prime time and made all of us look like a country of fools and we still are not angry. We can't get murderers arrested but we can have a fragile and retired military general arrested for merely insinuating that change in government is necessary.

How can you protect yourself against your own government? It has clearly demonstrated that your vote, your rights, your voice, your choices and even your life is not worth anything. If your not scared by the prospect that you can just be shot by anyone in government on national television and be branded a terrorist, a car jacker, a drug dealer, a subversive or a snatcher after a "legitimate" operation based on a "textbook" rules of engagement then you deserve to be shot. I certainly don't want my son and daughter to see my bullet-ridden body and read about me as a "suspected terrorist" shot in an encounter with a SWAT team. Even you would not like that specially when what actually happened was you were waving a number 10 stapler menacingly in a checkpoint filled with hoodlums pointing high-powered guns at you.

The present government thinks that they have something to fear in the ostentatious display of defiance by a few well-funded group of people representing themselves as "civil society". They worry about the eloquent speeches of disgruntled former cabinet members and old politicians succumbing to the flatulence of their own self-proclaimed status of being the "national conscience".

What they have to really fear more is the apathy that is growing among the greater number of the population? The population that no longer cares. The population that will choose to look the other way. I personally am exhausted at the existing avenues for redress and to think I know well both the easy and the hard way to get redress.

Imagine the kind of fatigue that majority go through everyday. The majority who either cannot afford the avenues for redress or have no knowledge that such avenues exist. I can still feel and remember the rage seething in my mind and in my heart in my own personal experience when government has failed me. Try to mathematically approximate the intensity of this rage if more than 60% of our population goes through pain of either being abused by representatives and officers of government or simply being ignored. All that plus the life of living with poverty every single day. This simply is like gunpowder in a keg, pressurized molten lava in a volcano or a nuclear chain reaction waiting to happen.

Whoever will have grand plan to bring a change in government or in society as a whole will succeed if a viable platform is presented, a new ideology is advocated, a leader emerges as an embodiment of that ideology, an infrastructure to deliver the ideology, and a resolve to eliminate the old values.

Communism has failed and socialism is not getting any sweeter. Democracy in this country has failed even its loyal adherents and religion ceases to be a refuge. Your spiritual adviser is himself either lost or confuse, a bigot, a fanatical extremist, a pedophile, or can't seem to make up his mind if he is a man or a woman and add to that have serious issues about getting married.

The new ideology if it has promise and when it does come will have no defiant adversary but the government. When the army of the new ideology marches on the street it will not necessarily get support from the population but the population will not be too eager either to put their lives on the line to defend the ideals of democracy or any fashionable version of it.

The followers of the new ideology will just march on and raise their flags and announce a new social order has arrived. This social order will not forgive those who participated in the old one. Many in government will go to prison, some will probably get shot in their offices and others will simply disappear.

This social order will be unlike any since it will only deal with government.

You might ask yourself, will this not trigger a national outcry? Did it trigger an outcry when millions of money is unaccounted for by a Catholic priest? Did it trigger an outcry that the impeachment trial of a president was never finished? Did it trigger an outcry when young men on national television are shot defenseless? Did it trigger an outcry when legislators boldly announce that they will not submit to any ethical standards? Did it trigger a national outcry when time and again public officials lie on national television? Ask yourself that and then think again!

Think about this: A sniper is more than a hundred yards from its target across a mass of people in between. He is not carrying an M-14 rifle with night and thermal scope. He is carrying a hit seeking guided Stinger missile launcher and he is just there with a mass of people between him and the target. He doesn't hide or wear camouflage. He takes a bull horn and shouts: "Hello excuse me your blocking my sights. Can you please take one step back?" People will probably look at the sniper and then look at the other side to know who is the target and take five steps back. Today, many will consider government as a legitimate target for almost anything for many legitimate reasons. Creating an atmosphere of apathy provides the right conditions for motivating people to take a few steps back to give anyone a clear shot.

There will be a lot of takers. Take your pick! You can have the Bangsa Moro, the NDF, Abu Sayyaf, Jemal Islamiyah, Cory Aquino, Loren Legarda, Boy Abunda but most of all it provides a strong motivation and a clear shot for a well-motivated group with a legitimate agenda for a new order driven by a lot less confusing ideology.

I'm not sure how this will be played out because the government is either paranoid or in denial. It cannot provide a decent way to redeem itself. Lies are becoming a policy and obfuscation obviously is becoming a virtue. And as if conning a whole nation is not enough another Constitutional Convention will now legitimize the term of what many consider a questionable presidency. Apparently our esteemed Constitutionalists believe that this country will be in better hands if the same people in government will be given a chance to govern under a parliamentary system.

This kind of thinking is like a Catholic Priest assuming that his virgin daughter will not be raped and killed if he sends her naked to Satan's bedroom on the condition that Satan converts to Buddhism. Of course, Satan will become a Buddhist, probably burn lots of incense then chops the virgin daughter to pieces after he sodomize her. But why be so gruesome? It's just another Constitution, another form of government and another lost election.

Anyway, our Commission on Election will probably guarantee that the next election in 2010 will be "trouble-free" and abides by the new constitution and the parliamentary system. The Comelec had always abided by the Constitution. We can rely on our Comelec to be really just a call away in its new anti-tapping anti-surveillance shielded PABX system. Hello Garci...

With the way election works in this country, a peaceful transition is a trip to the Yellow Brick Road! Change is eminent and it will be grotesque to many in government.

Change will be rapid cutting across the executive and the legislature first and then moving on to the judiciary. The most corrupt government agencies will probably believe that the new order will be just like any political change and think their hidden wealth will guarantee their safety. They will fall helpless victim to the system of abuse and corruption they have created. Along with hundreds of thousands of their colleagues they will find themselves locked in a dark foul-smelling abyss--well-documented, their fate sealed and forgotten.

Apathy will ensure the takeover of the new ideology will be painless for the general population. The only critical decision that the Filipino nation will make is a choice of either finishing the latest news about the new social order or watching the first episode of the fifth season of "Pinoy Big Brother".

The only funny thing that will confuse the nation's decision is if Manny Pacquiao schedules his last world championship fight on that same day.

The choices that will be available to the leaders of the new order is to spare the lives of those who nurtured the old political system and allow a rough road towards complete transformation or erase all vestiges of that system and start fresh simply because it is efficient, economical and logical.

In my life, I always believe that I have only two choices: What is right and what is easy? For most people in societies like ours, the choices are most of the time pretty obvious and for the rest, there's always apathy.

CebuSoft Takes a Position on Government Procurement Reform Act

The 4th Mindanao Information and Communications Technology Congress in General Santos City provided me with an opportunity to meet up, after some time, with Rene Sanapo of Cebu City GIS and Janette Toral of Digital Filipino. The day after the Congress, October 29, 2005, we got together for breakfast, courtesy of Leo Querubin of CrimsonLogic Philippines. One of the topics we've talked about is the Government Procurement Reform Act or more popularly referred to as Republic Act No. 9184.

Janette Toral wanted stakeholders in the information technology or IT sector to take a position on certain provisions of the law which inhibits wide participation or bids from a great cross-section of IT providers. She ask me if I can draft a position paper in behalf of the Cebu Software Development Industry Association or CebuSoft.

I naturally supported her position and did give my affirmative nod on the drafting of the position paper. Certain turn of events have forced us to come up with position paper since then. The Provincial Government of Cebu advertised an IT project worth PhP37 million and used the letter of RA 9184 as basis for their Bids and Awards Committee or BAC to start accepting bids from providers.

Michael Jurado, CebuSoft President, called me on a Saturday and ask me to start calling some of the CebuSoft members who might qualify to verify if they can actually participate. Of course Mike had already a distinct suspicion that nobody will qualify. He just wanted me to verify before he issues a position paper about the announced project and RA 9184 the next week.

Mike took exceptions to the provisions of the law because it seem to "disqualify" all providers in Cebu. Mike in exasperation emailed Senator Mar Roxas through Janette Toral a position paper. Rather than give you a brief glimpse of the position paper, I am reprinting the full text here.

Here's the full text of the CebuSoft President Mike Jurado's Position Paper on RA 9184:

Honorable Senator Mar Roxas,

IT SME’S AND GOVERNMENT

Nothing Personal just the crux of the Matter.

Selected Manila based IT companies/institutions have exclusive access to billions of e-government related projects and hardly any will trickle down to the already helpless local software development Industries.

Even in all local provincial/city LGU projects, not a single cent will go to the IT SME’s. Publicized "Invitation to bids" for such million peso projects should instead be entitled "Notice of Disqualification to Interested Local Bidders". Why publicize such an invitation when none of the readers will ever qualify? Answer-publication of such is simply to fulfill a requirement process. By virtue of the requirements publish, only selected big IT Companies based in Manila will qualify and non from Aparri to Jolo. What disqualifies the small IT SME’s ?

The Added new implementing guidelines provisions of the Law (R.A.#9184) on bidding that states that "Prospective bidders should have experience in undertaking a similar project within the last two years with an amount of at least 50% of the proposed project for bidding..." For a P30M project, one must have completed a P15M project the last two(2) years. How many from IT SME’s from Aparri to Jolo have done so? Answer: ZERO.

For projects of P5M and below, this provision is acceptably feasible for SME’s but for bigger amount projects, the SME’s are outright disqualified. Maybe disallowing projects as one big chunk over 5M be disallowed or broken up further if necessary to allow levelling.

And even if there is one who has had a P15M Project, his second hurdle is the word "similar", because the word "similar" when expounded and worded by the the BAC can come out different to what your perceived definition of "similar" is thus causing one to fail on this. The BAC, if they intend to, can play with words here to counter whatever "similar" project you present. Bare in mind that NGU’s/LGU’s are public organizations with "similar" structures as most private business enterprises with accounting and business processes to follow and they are unlikely to look at it this way, but look at similar LGU/NGU projects only favoring the selected big guys who just focus on such projects. "Similar" in technical parallelism should be the basis.

Lets dig deeper, Costwise, around 50% of the project components costs are "no brainer, just buy", "all imported" IT hardware/network appliance and software portions required of the project. The remaining 50% of the costs are the intangible technical IT tasks to be undertaken. Let’s break down further these intangible technical IT tasks at hand and spell those out further, and there is nothing in there that local software houses cannot do. Local software houses are truly capable of delivering the requirements. But NO, they have to be disqualified at the onset and make things smooth and easy for the annointed big ones. What else is new in this "realm of big government projects". IT projects will be the next wave of DPWH projects. Talk about helping SME’s and eliminating corruption.

The current developments can make one possibly conclude that some provisions or implementing guidelines were craftly created so as to conceal a discrete devious objective - create a cartel for cornering all big e-government projects to a few anointed companies. Companies capable of discretely giving bigger business or sales incentives.

Poor Provincial IT SME wannabe’s because no matter how qualified or experienced they are, the bad news for them is that none of the millions of Pesos from this juicy Marketing channel, a big brother supposedly, will ever trickle down into their pockets to help their business grow and hire more local IT Talents from the localities and proliferate IT to the grassroots. Here, Government money is not at all helping local industry but deprives them of it. The local talents can just savor the view of the millions of pesos as published and wishfully thinking if only they can qualify. "Sorry, it’s the law" BAC (Bids and Award Committee) will simply tell them. What a convenient excuse.

Another irony is that the leading government agencies spearheading such local projects do not really care about the predicament of their own stagnated local software development houses. In fact, they look at them as too small and risky
to deal with. Something like they just seem to underestimate their own kind and so they "seemingly" put their trust to the distant "more experience, high ticketed" big guys from Manila.

Local Software houses need more business channels to survive and taking away the billions of e-government market channel away from them in such a devious and subtle manner is the other side of government’s double-bladed talk -announcing to prioritize ICT and killing the industry silently at the same time, while at it, enriching "posing government businessmen" in the process too.

Suggestions: all IT related government projects must be temporarily stopped and its rational reviewed thoroughly again by all stakeholders for the following reasons:

1. ICT is the most technical of all endeavors and the BAC that awards project do not have the technical ICT expertise to properly rationalize the technical issues at hand. There is too much Vendor Specific preferencing and unnecessary horse-trading and with no consideration to helping local serious SME industry players at all, or society in effect.

2. Some implementing guidelines must be reviewed and revised to allow levelling of the playing fields. These Laws are designed to outright disqualify SME ICT companies with naturally lowered resources even though with equal intellectual capability to deliver the deliverables when given the chance.

3. If an inventory assessment of all e-government projects, both national and local, is conducted today, my technical sense tells me that majority have failed and so much peoples money have already been wasted. Please, let’s not treat government IT projects the likes of a fast-tracked DPWH road construction projects.

4. The common practice of timing the fund release of big projects at close to year end should be viewed with suspicion and require the institution of a more vigilant scrutiny/project details/bidding audit procedures from an independent body for projects like this.

If nothing is done, the milking of government coffers will continue unabated, the more our ingenuous intellectual IT talents from the grassroots are left to neglect resulting to a bigger diaspora of IT workers, at an increasing rate as Nurses today. The IT diaspora is now happening in our midst and maybe it is more convenient for National Government to just sit back and just watch the trend increase because of the projected increased dollar inflow. Talk about double jeopardy.

Government is therefore unwittingly killing the growth of the local software industry in the process, and in essence our intellectual capability to increasingly produce our own Filipino brand of software products and services, as well as the simple wish of living in one’s own country to earn a decent living.

India became a world power on IT because government purposely directed their funds to help their grass root industry players grow. In our country, the funds are being used up by the so called e-governance projects with "absolutely no consideration" to the "tax paying" grass root local industry players at all. Can we demand some change here?

I pray that honesty, integrity, concern, and love of country will not become history in this only country of ours.

Thank you for your kind attention.

Mike Jurado, November 15,2005
President, Cebu Software Development Industry Association, Inc (CEBUSOFT)

End of text from the CebuSoft Position Paper.

The Philippine Software Industry Association or PSIA in the national capital region have picked up the position paper and requested a full-text from Mike Jurado. They will also issue their own position on the law.

To date, I am still getting some of those providers including those outside the ICT sector to take positions on RA 9184. I will be writing a blog about RA 9184 and provide you a link to a copy of the law so you can make a comment yourself.

If you want to take a position please email me at:

virgilioparalisan@lycos.com

Please provide me a means to contact you more so if you represent an association with members already providing or delivering services to any local government or national agency.

Until my next blog!

Management Information Systems: Do You Really Need a Department?

Do you really need to set up a department called MIS? When ask this question, I normally counter by asking: Do you really need a purchasing department if most of your items are bought only once every three months or once a year? You're always using the phone in your office and almost all your sales are on the phone, would you want to organize a Communications Department for this purpose?

Normally, you don't and you won't, simply because you can seamlessly integrate these activities into existing processes and tasks without disrupting existing workload. In the MIS perspective, it is becoming even true today simply because the technology allows simple integration of so many activities into existing processes or workload.

In the late 80's, organizations had some section or department they called Electronic Data Processing or EDP. This all powerful department decide who, what or how "data" is going to be accepted, "process" and delivered to important people or departments who will use them to decide what will be produced, what was produced, how much, who gets paid, how much and when.

There was so much paper work to sort out and numbers to crunch that you had to have so many people just doing the sorting, the "keypunching" (There was not that many typing then!), classifying of "cards" and then the ultimate printing of summaries.

The sheer size of the computers at that time was enough to call the department monstrous. A large company with the computing needs for a workforce of more than 500 required an entire room to house its main computer and the air-conditioning system so proportionately huge nobody drinks cold softdrink in the office because most employees are wearing jackets to prevent hypothermia.

It was also the time when nobody also gets paid if MIS is down. Almost everything that amounts to putting a name and a number on paper will ultimately pass through MIS.

Today, the emergence of computer systems with smaller foot print and a thousand times powerful than its predecessors with software equally powerful and easy to use, provide users with more independence in creating data and using it. Simple secretaries can now generate list of customers and specific sets of information about them from their own desktop PC.

Most servers or central computers can now be controlled remotely right down to the keyboard of the workstations and security systems connected to it. Applications can be installed or "diagnosed" by systems administrators from
across the globe. With this connectivity and ease of communication, do you really need a whole department to run a system that can be managed from a desktop computer.

Most of the crises experienced in a network are no longer incidents related to hardware problems but software. Hardware make and design are so sturdy you can have several years passing by before the first incident of hardware problems is reported.

What is the alternative to rigid MIS structure then? The more cost-effective alternative is an IS/IT team derived from a matrix structure. The most immediate benefits from this structure are as follows:

• less need for highly specialized skills hence less manpower


• less cost in terms of salaries and wages


• multiple competencies from existing manpower


• management of technology deployment is based on existing processes


• systems design will be based on what the team knows rather than what the vendor says


• no slow down of work due to attrition


• effective IS/IT planning


• stronger commitment to long-term goals and project objectives


• faster technology diffusion from team to other levels


• better process improvement


• convenience in coordinating project tasks


• ease of competence acquisition from a Service Provider Team to your Team


• minimize the cost of expanding capabilities and infrastructure to support growth


• Initial successes will be repeatable and portable to other key business areas with less intervention from the Service Provider Team

The effectiveness of the IS/IT team is hinge on the following premises:

• The team has a clear mandate.


• Team objective or mission is clear to everyone.


• Top management must provide serious, strong and visible support.


• Team member is trained to assume role as participant of program or project.


• Team members are selected from key organic units or key process areas across the organization based on a set of criteria known to everyone.


• Team has a documented work process.


• Team has a plan.


• Team members and leader have time and place to meet.


• Strong leader.

The creation of this team will be the subject of future blogs in this section. Keep logging in or better yet subscribe to this blog.

Dynamics of Cebu High Technology Urban Centers

During the 4th Mindanao Information and Communications Technology Congress last October 28, 2005, in General Santos City, I was one of the speakers in the breakout sessions. Rene Sanapo, Cebu City's Consultant for Geographical Information Systems or GIS was also a speaker during the plenary and luckily in the same room with me at the hotel designated for guests and speakers.

We were able to catch up and after all the day's activity we got to talk about a lot of developments in the ICT scene. He showed me a copy of a paper entitled, "International Seminar on Dynamics of High Tech Urban Spaces: Asian-European Perspectives" and a very intriguing paper at that.

The paper incidentally was referring to an event that will happen in Hyderabad, India some time in January or February 2006. Apparently, India is evolving from the standpoint of creating information technology driven economies to building
their society by either stimulating or forcing the growth of high-technology centers. Their strategy is to find out the how high technology urban places evolved in Europe and selected cities in Asia.

I was guessing that Rene wanted me to get a Cebu perspective using the paper as a reference point. My reading the paper was like serendipity because I was looking for a good reference point to write a paper for one of the pillars of the Silicon Valley Model being envisioned for Cebu. The Silicon Valley Model however is a totally different subject altogether and is taken up in a separate blog.

Anyway, I got to work right after I got back to Cebu.

The dynamics of high technology urban spaces in Cebu should be viewed in the context of what is a high technology urban center in the Asian-European Perspective.

The more successful experience has been in the microelectronics, pharmaceutical and biotechnology industries. The key distinction is that the major players in these industries are the primary sources of innovation in their respective areas of specialization.

The achievements of these industries have driven the economic restructuring process of the western world in the 1970s and beyond. Another distinction is the emergence specially in knowledge-intensive activities disengaged from industrial production.

The direction of property management shifted from the purely spatial and market value considerations to specific architectural symbols and landscaping. The experience is not specific to highly industrialized countries since high technology urban spaces have successfully evolved in Third World countries.

Putting the Cebu Picture in the Urban Space Perspective
As I got down to half of the paper I have to ask myself: Does Cebu have this high technology urban space?

The answer is no!

There are disparate characteristics found in several urban spaces but not one of these has all the distinctive characteristics of a successful high technology urban center within the perspective described above.

The creation of export processing or special economic zones have stimulated the growth of urban centers and literally built communities around it through worker migration. These centers are not high technology per se since it does not fall within the context of the distinction described here (that is knowledge-intensive activities disengaged from industrial production).

MEPZ I and MEPZ II locators for example are global companies considered leaders in their fields but their contributions in terms of knowledge-based activity is directly connected to their manufacturing operations and not disengaged from it. Their choice of location is not driven by any symbolism or landscaping consideration but by tax and other incentives offered to foreign direct investments. It did matter to the decision-makers and key executives though that the best resorts and leisure places are less than an hour's drive from their production sites.

An attempt was made to leapfrog development in the southern part of Cebu through an ambitious Naga Township but nothing came out of this project. It was envisioned to be a self-contained economic ecosystem but until now we still have to see a semblance of vertical development in the area.

AsiaTown IT Park was envisioned to attract information technology and IT-enabled service locators but we still have to see a company driven by a knowledge-based work force churning out leading edge innovations.

There are several observations of urban centers here in Cebu that needs to be shown. MEPZ I and MEPZ II attracted so many workers but commercial activity did not follow as expected. Logically commercial activity should be targeting workers but such a phenomenon did not happen since there is no mall anywhere in proximity. A small commercial complex did rise up but catering to the middle class rather than the workforce. The zones however did attract a lot of banks and freight forwarders to the zones.

AsiaTown IT Park on the other hand is quite near at least 3 malls and in the major residential communities but it still has to attract major global companies to the site. Efforts to come up with a cohesive IT initiatives and strategy might stimulate growth around AsiaTown IT Park.

Inhibitors to the Development of Urban Space Dynamics
There are so many factors that may have to come to fore in order to force this evolution. But there are very few that may have as much impact. Many inhibitors are still affecting this evolution.

A Weak SME Base
Our small and medium enterprises are not growing as rapidly as it should. The number of small and medium information technology enterprises alone is not very encouraging. You can disregard the number of computer retailers and Internet cafes from this number. We need small and medium enterprises that can deliver certain technologies and expertise.

Our Income Tax Base Burdens the Consumer
Government still relies on the low and middle income population for the bulk of its tax revenues hence the majority of the population has no savings or surplus to either invest or to buy high-technology goods or products created by high-tech production processes. Graft and corruption still constitutes the greatest single factor to tax revenue losses.

Government Processes Is Not Ready for Evolution
No amount of tweaking in government structure or political paradigm will change this. There is a need for credible over-haul of government processes and the integration of accountability in every level of government activity.

The headlines about government spending to encourage the economy, have no direct correlation to economic activity because most of this cash are not really going to the SME base.

Many small and medium enterprises consider government transactions as a wasteful business exercise. The irony is that the law, Republic Act No. 9184 or the "Government Procurement Reform Act" supposedly passed to create transparency and efficiency in the government procurement process seem to spawn a new form of big ticket corruption the likes of which done very well by the Department of Public Works and Highways or DPWH during the late 80s.

Government is A Poor Consumer of Technology
The reluctance of our politics to use technology for efficiency, standardization, transparency and accountability makes government a low and slow consumer of any technology whatever the applications. There is little confidence in any development programs whether for social or ICT since these programs will still have to be implemented within existing (or the lack of) government processes already stress by poor credibility and consistently waning public trust. This reality naturally does not encourage market mechanisms to thrive.

The best technology to ensure efficiency and standardization leading towards more transparency and accountability will not get deployed in this environment. The Government Procurement Reform Act already practically guarantees this in the coming years.

Private Investment in Infrastructure is Too Small and Too Slow
Since government itself does not make 'credible' investment as against high investment in infrastructure, private enterprise is not compelled to provide a counterpart investment. Political initiatives in government supports only small infrastructure projects instead of the more cost-effective mega projects that has longer and more strategic impact on the local economy.

In develop countries infrastructure projects provide one of the biggest channels for infusing cash into the economy but such a strategy does not work here. The 20% to 40% "Consulting" and "Service" fees that incumbents charge service providers and contractors already "rips off" whatever return on investment or margins these providers and contractors would have plowed back to the economy.

Tell-tale Signs of Urban Space Dynamics
There are existing and specific areas already for the emergence of potential high technology urban centers. The challenge really is to either wait for these areas to evolve 'naturally' or to force evolution at a rapid pace by planning and deliberately creating the business culture and the innovation ecosystem.

The new framework to stimulate this evolution is to move from the framework of simply encouraging foreign direct investment and export to a sublime strategy of actually creating a technological base through legal channels of transferring technology, collaboration or encouraging research and product development in these areas.

There are already efforts in this direction at least in Cebu. The main concern is determining the number of stakeholders who should be involved and the development of a process to 'trigger' this evolution.

The Evolution of the Cebu Information Technology

The 'Cebu is IT' experience has been a model for a lot of the parallel initiatives in many growing cities in the country. Being in the middle of the action during the Cebu Information Technology Summit of 2001, I find the succeeding initiatives in these places quite amazing. When I go to different forums I get to be ask the same questions a lot of times. How did we do it? Where there deliberate steps taken to get to where we are? How did we evolve?

We can safely say that we did something right. As to being deliberate in this direction, I'm not quite sure. It's more like toddle through. We did evolve definitely.

Looking back there were noticeable phases or transitions we have to go through to be where we are. However, the state of where we are is not yet our destination. We are really quite a distance from our collective vision. But it will matter a lot if we did look back and see what we went through to be here now!

Selection of a Model for Development 

The National Association of Software and Services Companies or NASSCOM is the premiere trade body and the chamber of commerce of the IT software and services industry in India with about 900 members. The members are into software development, software services and IT-enabled or BPO services. 150 members are global companies from the US, UK, EU, Japan and China.

NASSCOM considers itself the strongest proponent of global free trade in India today. The software sector in India has shown quite a phenomenal growth in the 1990s. To create a plan for the growth of the software industry in the next millennium for India, NASSCOM commissioned a study of existing companies and their IT strategies. NASSCOM commissioned a global management consultancy firm, McKinsey & Company to undertake this study.

McKinsey & Company is a global professional business services organization. It has been providing organizational development and strategic management services to Fortune 1000 global companies for 75 years. Three (3) of the largest global companies are served by McKinsey helping them acquire competitive advantage and leading edge management expertise.

Almost everyone knew from the very start of the Cebu initiatives that India was clearly the model. Most of the literature being circulated all lead to the NASSCOM-McKinsey Report of 1999. This report was publicly released during the "Indian IT Strategy Summit" in December of 1999.

The report outlined a general strategy for the IT sector in which most of the projections in that report have today proven to be right on target.

Research, Study and Synthesis of the Model 

We most definitely did our homework. Different stakeholders had a piece of the NASSCOM model and each had a strategy of the best way to mold it to make it their own. Our chamber of commerce did its role of putting the stakeholders together and introducing the NASSCOM model and the city government got both the local and national agencies to be involved in creating their own synthesis of the NASSCOM model within the sphere of their respective influence.

By year 2000, I have read at least two updates of the same McKinsey Report both have emphasized how well the Indian software and IT service sector were growing beyond projections. 

Informal Discussions and Consensus-building 

You just can't imagine the depth and breadth of the discussions that took place here when the NASSCOM-McKinsey Report finally reach a lot of the stakeholders. 

There were those who would like to clone the Indian experience from the NASSCOM-McKinsey Report right down to the punctuation. Others just didn't feel that it really reflected the kind of development exhibited in Silicon Valley. Still others felt that there has to be another model for Cebu like the Singapore success story if there is such a story.

Even before all these IT initiatives, so many development initiatives where already on the table but none however was as focus as the kind that grew out of the many discussions triggered by the NASSCOM-McKinsey Report. There were a lot of surprising consensus building up.

Many believe that whatever the outcome the IT initiatives have to be started soon. It has to be done and Cebu has to do it on its own. Cebu like always believe that the National Government cannot do it whatever the prodding and even if they did it they almost always do it wrong from the start. 

Buy-in and Adoption of the Model for Development 

There was a lot of talk going around that the whole idea of finding consensus for an IT initiative to drive the Cebu economy was more a political strategy than an economic one.

Whether this is true or not the fact is that the timing of the initiative forced a snowball effect for all sectors to come to a crossroad. This crossroad eventually led to a series of events that put even competing stakeholders in one table to discuss common issues affecting their industry. 

The most important milestone is the buy-in leading to the adoption of a model for development. The most significant decision that the stakeholders have made, and these stakeholders were mostly competing with each other, was to be in the same room to position Cebu as an information technology hub.

Most of the big stakeholders already got the point of the McKinsey Report of 1999 but the smaller players like the small information technology enterprises or SMITES have not read or heard of this report.

Even then, the call and opportunity to be in the same place and literally in the same table to plot the direction of Cebu's economy on the short and medium term was intriguing and enticing for a constituency seldom consulted of matters affecting them. 

Pre-summit Workshops participated by different stakeholders 

Prior to the Cebu IT Summit of March 2001 was a three-day Pre-Summit Workshop held on February 26-28, 2001 at the Toledo and Danao Room of Holiday Plaza Hotel along F. Ramos Street, Cebu City.

The Pre-Summit Workshop is a result of a series of meetings and workshops that attempted to cover as much issues about the information technology sector in general and Cebu's position in the current IT developments in particular.

I was engaged by TeamAsia the official event organizer to develop the materials and process for the workshop. It was not an easy task since I was given less than 30 working days to do it and informed that there maybe more than 30 people in each session, a number not ideal for a workshop of such nature.

In the workshop, I introduced a concept I referred to as the "Information Technology Loop". This concept was suppose to clearly identify who are legitimate stakeholders in the IT initiatives in the context of the Cebu IT Summit. 

The Pre-summit Workshop formed part of the final series. The IT Summit Steering Committee has organized four (4) Working Groups, namely: Policy & Incentives, Human Resource, Infrastructure, and E-Capital. Each of these Working Groups had a separate workshop session. The sessions were not smooth and uneventful. It was in reality far from that.

I already anticipated that the sessions will be a simmering cauldron since the organizers have invited practically the 'Who's who' of ICT and businesses in Cebu City. All with difficult issues to raise. All with strong willed CEOs, COOs, and key executives not about to give up a quarter of their respective positions in the agenda.

Current data at that time showed Cebu as a primary candidate for being the leading IT center in the country and Asia. Admittedly, there is still much to do and inhibitors we have to deal with to cross the borders beyond what it was then. This workshop became the first of our border crossings. What we gained in those three days became a road map that got us farther than just crossing boundaries.

The Cebu Information Technology Summit 

The Cebu Information Technology Summit or Cebu IT Summit was held on March 29-30, 2001, at the Cebu City Marriott Hotel. The keynote speech on the theme "Cebu is IT: Charting the Path, Setting the Goals Together" was delivered by Manuel "Mar" Roxas II, then Secretary of the Department of Trade and Industry. The Cebu IT Summit was made up of two big summit workshop. 

Summit Workshop 1 on Day One was 'Setting the IT Cebu Vision' and Summit Workshop 2 on Day Two was 'Operationalizing and Achieving the IT Cebu Vision'. 

 The Cebu IT Summit presented a challenge for me as a Lead Facilitator at that time and to Ms. Siony T. Hijara, then Lead Documentor for all the workshops, since there was almost a hundred people in a room in each of the Working Committee Workshops.

We had to devise a process and facilitating methodology that will make the other facilitators and lead documentors do their job in the same way we did it during the Pre-summit Workshops. Adding to the challenge was the fact that the two other facilitators in the persons of Frederick Amores and Ross Madrid will be available only on the first day of the Cebu IT Summit.

The Summit went down in Cebu business history as a resounding success. We came out with a document which I personally handed to then City Mayor Alvin Garcia who closed the summit by reading the summit document to the participants on the last day of the event.

Before that year ended the Cebu Educational Development Foundation for IT or CEDfIT was born. Among the many Information and Communications Technology (ICT) Councils in the country only Cebu has a clear direction and serious stakeholders with an agenda but was created a year after.

It took three years for the Cebu Software Development Industry Association or CebuSoft to be formed. The rest of the IT initiatives was a whole series of fora, conferences, workshops and programs from the different stakeholders. 

The dynamism of the sector can undeniably be trace back to the program of action defined in that summit document of March 2001. In the 8-Point Program of Action only one have no champion and that it is the program of action for improving the quality of electrical power. 

The Next Step: Cebu ICT 2007 and Cebu ICT 2015 Foundation 

For several meetings now, the Cebu Chamber of Commerce and Industry (CCCI), CEDFIT, CebuSoft, Cebu Computer Society, telecommunications company, SMITEs and the Small and Medium Enterprise for Sustainable Employment Program (SMEDSEP) have been discussing the next great leap in the Cebu IT initiatives.

These initiatives will start this 2005 with the work-in-progress towards the 2nd Cebu IT Summit. CCCI is envisioning the creation of an entity that will consolidate and put focus to all of Cebu's effort in the ICT sector. 

For a lack of a better name, the group is referring to this entity as Cebu ICT 2015 Foundation. This foundation hopefully will be responsible for managing the next Cebu ICT Conference and Exhibition in 2007. In a concept paper presented by Bonifacio Belen, Executive Director of CEDfIT, he proposed consolidating the gains of the 'Cebu is IT' efforts by moving from the NASSCOM-India model to a Silicon Valley Model. 

The proposal introduces a model that will put Cebu as 'a' or 'the' IT hub by year 2015. This will be Cebu's next milestone.

Opinions and Perspectives in Business and ICT

This blog site is a collection of my opinions and perspectives about business and information and communications technology.

More than 10 years of career was in this endeavor. Quite naturally, most of my musings, thoughts, opinions or perspectives will be in this field. I am biased towards issues and developments affecting business and ICT initiatives in Cebu.