April 18, 2019
Jonathan De Luzuriaga – Competitive Outsourcing Workforce
April 18, 2019
In this episode, we chat again with Jonathan De Luzuriaga – the founder and president of Spring Valley which is based in Roxas City. He was also the executive director of IBPAP and currently the president of PSIA and NICP.
I’m honored to be interviewing Jonathan again but also honored to be a guest down at his Spring Valley down in Roxas city. He gives a lot of insight into the outsourcing workforce and you will definitely learn a lot from it.
Derek Gallimore: Welcome to the Outsource Accelerator podcast. This is a short format podcast where we explore business and outsourcing mastery. My name is Derek Gallimore and I am really excited to bring you the leading podcast in outsourcing.
Derek Gallimore: Hi and welcome to another episode of the Outsource Accelerator podcast. My name is Derek Gallimore and this is episode number 224. So today I’m again interviewing Jonathan De Luzuriaga of Spring Valley. He is the founder and president of Spring Valley in Roxas city and he is super, super connected and central to a lot of the happenings of the outsourcing industry. He’s been in the industry decades almost as long as the industry itself. He was the executive director of IBPAP, which is the industry’s official association. He’s currently the president of PSIA, which is the Software Association for the Philippines. And he is the president of the NICP also, which is the provincial based Internet communications technology association. So he’s a super good guy to know and knows the industry inside out. So we’re I’m honored to be interviewing Jonathan but also honored to be a guest down at his spring valley down in Roxas city. It’s an inspirational place and we’d talk about that more here of course we did. We had previously spoken to Jonathan and if you want to get more backstory, more background then go and listen to those episodes, which is 211 and 219. But again, this podcast is completely independent and you’ll get a huge amount from it. So if you want any of the show notes, of course, as always, go to outsourceaccelerator.com/224. Enjoy.
Derek Gallimore: Hi and welcome back. So today I am super excited to be joined by Jonathan De Luzuriaga, Hi Jonathan, how are you? Perfect Derek, you did it. You did that perfectly. Always eager to have a conversation with you and a, so I’m going to call you JDL from this point as others do. Just give a brief introduction as to your past and and you know, you’ve been immensely involved in the development of outsourcing here in the Philippines and you’re also a founding and heading spring valley here so yeah. How, how, how do you describe yourself to the, to the person in a, in a, in a cocktail?
Jonathan De Luzuriaga: I am no stranger to a outsourcing operations being part of a company such as Convergys, Teleperformance, E-performax back in the day. Then I started getting into leadership roles in industry associations. I was once an executive director of the IT and business processing associations of the Philippines. Currently I’m the president of the Philippines Software Industry Association as well as the President of the National ICT Confederation of the Philippines.
Derek Gallimore: Fantastic, and so we are in a Roxas city sitting in Spring Valley, which is the, the Philippines answer to Silicon Valley. We’re both sitting here in kind of beach wear you’ve got to geeks on the beach t-shirt on and you know, sort of, I feel now in the Philippines is really at the forefront of innovation and there’s startup meetups, there’s pitching meetups all the time in Manila and geeks on the beach is a like a tech startup conference on a beach and you know, it’s a, it’s a good change to like cold New York or cold London thinking that kind of like geeks and startup and tech and all kind of hanging out here in the tropics. How do you see the climate for innovation? you know, and the Philippines is more traditionally been more traditional and also a little bit, I suppose, subservient and kind of being told what to do in terms of the customer service and BPO. Now it’s their time to really kind of lead in terms of innovation, how do you see that whole sea change with the sort of younger generations happening now?
Jonathan De Luzuriaga: I think it’s worth mentioning Derek that you know, the experience that we gain in terms of growing with the outsourcing segment of of the Philippines and especially the BPO sector. We learned a lot of lessons and it’s still going to be formidable for us. You know, it’s still going to be unique value offering of the country moving forward because apparently despite all of the disruptions in the, you know other nations, especially the Western world going deep into, into digital, there’s still going to be some important touch points that would require a human, a human intervention. But that being said, the, the population of the country is about 104 million Filipinos. We have a very young workforce where in the average age is basically about 23 years old, which also means that you’ve got a very tech savvy workforce.
Derek Gallimore: So it’s also highly, highly literate great levels of English high levels of university graduation.
Jonathan De Luzuriaga: It’s increasing, you know, so we usually announce to the entire world, that there’s half a million university graduates, that we produce it’s slowly inching up to become closer to 700,000. The value that this country puts on education is immense. In fact, the only impediment really is that most of my country men, which is, you know, sad story in itself could not afford university education and the public sector could not, could not answer to that challenge as well. So, but everything being normal, I think, I think we’re going to have more than 700,000 graduates every year because there’s really no shortage in terms of the younger generation wanting to get educated. In fact, I always tell, you know foreign friends of mine that even the provincial Filipinos would do anything, sell their carabaos, sell their lands and their house so that at least just one, one offspring will get a decent education.
Jonathan De Luzuriaga: And once the, once that particular individual individual graduates, then, you know, it’s his or her responsibility to get the other siblings into formal education. So but the inclination of the youth right now is getting more towards digital than anything else. My, my son for instance, is taking up game development and tried to toy around with the idea that 10 years ago, if I had a child that was going into university and they would ask me that I want to go into game development, I wonder how I’d react. Right. But it’s only been 10 years and right now it’s one of the most sought after sought after a academic disciplines that’s out there.
Derek Gallimore: And it’s also, it’s a surprisingly big industry, apparently more is spent on game development then the entire movie industry and the entire music industry combined. It’s a massive, massive kind of sleeping giant.
Jonathan De Luzuriaga: Well we are all addicted to Games in one form or the other
Derek Gallimore: and it’s maybe not spoken about because it’s kind of not as cool as going to the movie on a date. Is that correct? It’s sort of something you do, you don’t brag about.
Jonathan De Luzuriaga: It’s a very private thing. It’s a very private thing. But, you know, go looking into, you know, my, my hazy crystal ball. I think this entire inclination towards technology and innovation and we I think it’s no secret that the Philippines has been sending a lot of my countrymen outside more than 13 million overseas Filipino contract workers. And some of them they were really, really on the professional level, you know, talk about software developers and engineers and architects,
Derek Gallimore: but that’s part of the opportunity, but it’s also a brain drain and it takes the brains out of the country, takes there that the family splits up the families.
Jonathan De Luzuriaga: We’ve been talking about the reverse diaspora for a longest time that, you know, hopefully all of these professionals that have had lucrative careers outside would come in and, you know, bring their experience with them. And that’s going to figure out into, you know, creating a digital Philippines eventually. But as luck would have it, this country has always been quite benevolent and would really want to open its doors to, to everyone else in the world. So I guess, you know, the digital journey of the Philippines would still also involve servicing requirements of other countries.
Derek Gallimore: That’s good. I mean China, got rich from making other people’s stuff. And also educated themselves while they make other people stuff and now they’re, they’re probably one of the best in the world. That was kind of embarrassing and, you know about education then everything is digitizing and education is probably, you know, it’s slow to change, but, you know, I imagine your kids, they’re kind of, and I tell people this, the audience, and I tell people this in the US then I kind of, what’s it like in the Philippines? And I’m like, the kids are, the level of English is incredible, which really opens up the entire world because the kids are brought up on a diet of Youtube and if they’re into computers they’re just in the, in the sort of the blogs and the forums that every other US kid is, if they want to learn coding, it’s probably a coding academy that the same kids in Silicon Valley are using online. It’s really, again, it’s just creating this singular global network, isn’t it? And I think where previously the Philippines had a disadvantage because it was geographically separated, It’s not really, it’s not really, it’s not that friction isn’t really there anymore, is it? Especially for the sort of young kids that are just being brought up on computers and iPads.
Jonathan De Luzuriaga:: Well we’re, we’re now sitting in a nation that has more mobile phones than there are people. So I guess that that says a lot about, you know, how, you know, the, the, the mindset in the new generation is going to figure into the future of the country. You know, 7,400 islands connecting all of that is really a big challenge. But now because of the opportunities brought about by, by newer technology, I think that gap is beginning to dissipate a little bit. In fact we have to thank the BPO sector for that too. You know, prior to the BPO sector coming into the Philippines, 10, 15 years ago, there was really not much influence to develop, you know, other places outside of the main metropolitan areas in the country. But now since, you know, a huge chunk of the large third party outsourcers discovered that number one, 70% of all the graduates actually come from outside of Metro Manila.
Jonathan De Luzuriaga: And why don’t we the, the, the next logical question there is or action point is why don’t we go to where they are instead of inviting them to come over here. But of course there was always a question of infrastructure and you know, this, programs like a digital cities and next wave cities of IBPAP together with PSIA and a department of the newly created department of ICT has made it possible for, you know, traditional backward, provincial areas to be the next centers of excellence for IT-BPM. And apparently when you’ve got the infrastructure in place already, it’s fairly easy for you to add a layer of academic intervention, right? Basically these kids nowadays, you know, and I’m not just restricting this to the Philippines, you know, you give them access to education, they will eat it up regardless of where they are in the world right now. You get into youtube, we could practically start the, you know, anything that you would want to, yeah.
Derek Gallimore: And with the, you know, I suppose doing full circle then we’ve, we’ve spoken about the evolution of outsourcing, but we’ve come at this now, this time from the world is changing and digital and innovation. How do the two worlds meet then in terms of the traditional outsourcing, which is call center. Is it, is it all going to evolve into a sort of KPO which is knowledge process outsourcing, really kind of high value stuff? Or is the BPO sector going to kind of wither and die and there’s going to be a few tech labs around? How do you see, you know, because the BPO employs about 1.3 million people now, and if that went, it would really kind of hamper the country. How do you see this all kind of ending happily?
Jonathan De Luzuriaga: I think there will be contraction in one form or the other, right? the clients of third party outsourcers will now discover, you know, that, you know, it’s much cheaper. It’s more efficient to get into the tech play rather than, you know, to see the traditional butts on seats. You know, people wearing headsets and answering their customer concerns aside from the fact that their customer profiles are also changing. You know, as the, as the consumers get a bit more younger, their patience to actually wait and dial a number and wait for somebody to answer it is also slowly waning. So, with that being said, what we’re looking at here is an opportunity more than more than a crisis. We see we’ve got a very well trained workforce that is acccustomed to servicing other geographies. The discipline is there Derek, you know, you can’t even begin to imagine working from nine o’clock in the evening till six o’clock in the morning and you’re doing it with a smile.
Jonathan De Luzuriaga: You’re receiving, you know, issues and problems and you have to resolve all of them throughout the entire shift. So it’s very challenging. We could see that the workforce is up in about, and they’re up to up to it, you know, they, they, they tackle this head on. So with that being said, I think the future for us is really to leverage on what we currently have because the strength of the communication here in the Philippines, especially English communications, relatively strong. It has been further enhanced by, you know, the, the long experience that we’ve had especially with the outsourcing sector. And the third is the challenge for us really is to do some upscaling and rescaling. There are certain things that I think won’t be as easily disrupted as, you know, the traditional by the book checklist type of a procedure of service delivery.
Jonathan De Luzuriaga: And these are the creative emotive requirements in terms of growing our business. And if we could upscale and rescale most of the people that would be affected by some level of contraction within the traditional IT-BPM outsourcing business, then we’re still, we’re still a little bit ahead of the next competition. There’s also some contraction happening in terms of the number of significant players that are still going after the traditional, you know, outsourcing pie.
Derek Gallimore: Who aren’t able to evolve quickly.
Jonathan De Luzuriaga: Right. And also there’s a lot of mergers and acquisitions that’s happening. So we need to, we need to be cognizant of this because this is, you know, this is happening, you know, the bigger ones would now want to get more market share and if the only way for them to do this is to buy out their competition, this will continue to happen.
Derek Gallimore: Spring Valley then, you know, it’s, it’s kind of a relative to outsourcing and you really, it, it’s kind of the incubation innovation sort of backend service potentially. Like, do you see that as, as the big upcoming opportunity in the world for the Philippines, not just to be someone else’s call center, but the Philippines to really outsource the innovation? The incubation, the back end, all of the processing for some of these new silicon valley’s and startups and Unicorns
Jonathan De Luzuriaga: internally, the way I see a view spring valley is the monkey wrench that you basically throw into a well oiled machine that’s running right. It, it, it just basically tells everyone all our internal stakeholders, you know, let’s stop this and let’s try to figure out, you know, what else we could do for the rest of the world. I think it’s our offering to, to showcase that we could partner rather than become, you know, the just the service provider because if you, if you walk into the sacred halls of the fortune 500 companies that are really deep into disruption, including the tech companies that, you know, I’ve been dominating, the, the, the boards in the US you could see a lot of Filipinos there, right? But then again, they’re doing a lot of very nice things for other people. And again, there’s the, our propensity to actually think of creating new things for ourselves and establishing things that could go global.
Jonathan De Luzuriaga: It’s not really a, it’s not really that prevalent. My dream is for spring valley to become the springboard for my countrymen to actually grow globally significant companies that would then reinvest in other countries in other countries. You know, most of my career, I’ve been a, I’ve been the inbound guy. Every time there’s a new investor that’s coming into the country, you know, I could almost, recite the song and dance routine for the Philippine IT-BPM sector in my sleep. My wife usually tells me that and I wish that I could do the same in return the favor to all the nations that have invested in my country’s foothold in terms of the IT-BPM sector.
Derek Gallimore: Yeah. It’s definitely a bright future, isn’t it? You know, and I think seeing things like silicon valley and just the general youth and vibrancy and education levels of the Philippines, it’s really got, got a bright future, isn’t it? both, both in its own volition, but also I think in, in being that partner for the rest of the world as well.
Jonathan De Luzuriaga: One of the biggest mind shifts that we require in the Philippines is that there is no such thing as one time, big time. We have to look at this from a very long term perspective. Some of the courses that we offer here at Spring Valley would require that we train eight year olds on animation or you know, nine year olds in terms of electronics and IOT. And obviously if you’re looking at it from the usual, you know, I’m going to train you for two months and then you could hit the phones afterwards. It’s, it’s not, it’s not even apples to oranges. It’s totally something different. But we need to develop that long term, that long term mindset wherein. We need, we have to plant the seeds now in order for us to reap this, you know, 10, 15 years afterwards.
Derek Gallimore: Yeah. It’s amazing. Thank you so much. And a, if anyone wants to learn more about you or spring valley, how can they get in touch? Our website is www.springvalley.tech we’re on Facebook as well. It’s a spring valley technology and innovation or drop me an email JDL@springvalley.tech.
Derek Gallimore: Thank you JDL.
Jonathan De Luzuriaga: Thank you as well Derek.
Derek Gallimore: Okay. That was Jonathan De Luzuriaga of Spring Valley and many other things. So if you want to get in touch with Jonathan or know any more about this podcast, go to our show notes at outsourceaccelerator.com/224 and as always, if you want to get in touch with us, just send us an email to email@example.com see you next time.