Leyte as an IT service hub: The Accudata Experience

I was in Tacloban City, Leyte where I conducted an information technology (IT) strategy creation workshop for the Leyte Chamber of Commerce and Industry (LCCI) and Office of the Provincial Governor. Two international companies recently visited the province scouting the area as a potential call center and back office location as an alternative to Manila and Cebu. This prompted the business and government sector to create an action plan to improve the infrastructure of the province and possibly market it to potential locators.

I got the chance to meet Jericho Petilla of Accudata International whose group of companies is engaged in data encoding, data analysis production and medical journal indexing, among others. Accudata currently has more than 1,200 employees with 30 subcontractors. They have a production office in Leyte.

Aside from Manila and Cebu, other provinces in the country have the potential to become IT service centers. According to Petilla, Leyte can be an ideal production location rather than an area of application implementation.

Without any bias, Petilla shared the many challenges of putting up a production center in Leyte. Number one is bandwidth. Internet traffic in the provinces usually passes to two Internet service provider (ISP) servers in the country before it goes outside the country, with Manila or Cebu as the main hub. With 200 provinces, you can just imagine how clogged the main hub can get. Accudata processes no less than 3 gigabytes of information a day being uploaded and downloaded from and to its clients in Europe and US. To meet the challenge, it got a satellite download link subscription and a leased line uplink through ISPs. It spends more than $10,000 dollars just to have a consistent Internet bandwidth per month.

Power-wise, Leyte is a major source of geothermal power, although its locals pay 30 percent more for electricity than those who live in Metro Manila. That brings additional cost to the locator. A strong management team, availability of skilled manpower and production facilities are also lacking in the province. Petilla said that the infrastructure needs to be built first in order for the locators to come and not the other way around, as others think.

Why Leyte?
With such a grim scenario, why did Accudata locate in Leyte? For Petilla, the main factor that motivated him was the entry of an educated workforce yearly and the high unemployment rate, which, according to their study, is 12 percent. The National Statistics Office reported 5 percent but Petilla said that if a person gets employed for one month in a year, this is already considered as “employed” in the statistics. The province produces 1,500 college graduates per year. Accudata’s retention rate is very high, as well, since no one has left the company for the past two-and-a-half years. This high retention rate earned Petilla a call center operation project where its client, the UK company, experiences continuous monthly turnover.

Why do people stay longer? Petilla said that people in the provinces wouldn’t simply give up their jobs and go to Manila if the salary is twice or thrice higher than they’re currently getting due to the high cost of living in Manila.

The communication infrastructure of Leyte is no different from Manila. People are trainable. Labor is considered as Leyte’s biggest advantage.

Petilla urges the local government to conduct a manpower inventory in Leyte and find out where they are going. Such information is needed as a base when marketing the province as a potential back office, database production, Internet/programming and IT business location.

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